Profitable Dollars Through Enhanced Inventory Controls

Digital sales comprise 13% of the extensive $926 billion grocery sales, and 69% are digitally influenced. Grocery Doppio's data above highlights the importance of inventory visibility as a competitive advantage for grocers. It is imperative for controlling losses, such as the $281 million incurred due to unsubstituted or unavailable inventory.

This necessity emphasizes that streamlining inventory visibility is pivotal for grocery retailers. It not only contributes to a robust order fulfillment system but also ensures profitability in sales. Additionally, maintaining customer engagement at each interaction in the digital experience becomes contingent on the efficiency of the inventory visibility process.

What is Grocer's Inventory Visibility

Inventory visibility is crucial for evaluating stock levels, identifying overstocked and understocked items, and addressing discrepancies that lead to shrinkage. This is especially vital, given the reported $19 billion losses attributed to unavailable items. As traditional shoppers shift to omnichannel shoppers, inventory visibility becomes pivotal as a technological advancement and a strategic business opportunity for grocers.

Customer confidence relies on providing a seamless and accurate digital experience at every touchpoint, making inventory visibility fundamental in navigating the evolving grocery landscape. To achieve this, understanding the exact SKUs and their locations in the supply chain is essential for identifying overstocked, understocked, and unaccounted-for items.

For grocery retailers, tracking inventory across the supply chain, from manufacturers to warehouses and point of sale, efficient optimization of inventory, encompassing the planning process, facilitates quicker in-store inventory movement, ensuring customers get what they need within hours. That is the essence of inventory visibility.

Benefits of Inventory Visibility

Optimized Supply Chain

Real-time visibility allows for efficient management of the entire supply chain, from manufacturers to inventory recipients. It helps streamline processes, reduce delays, and ensure a smoother flow of products.

Demand Forecasting  

With real-time data, businesses can better understand demand patterns. This enables accurate forecasting, helping in anticipating shifts in demand and adjusting inventory levels accordingly.

Reduced Stock-outs and Overstock

With accurate and up-to-date information, businesses can avoid stock-outs and overstock situations. This leads to a more balanced inventory, preventing losses from excess inventory or missed sales due to stock-outs.

Improved Order Management

Real-time inventory visibility, coupled with an intelligent order management system, enhances the efficiency of the order fulfillment process. Businesses can optimize order placement, reduce lead times, and improve customer satisfaction.product availability and delivery expectations

Enhanced Customer Experience

The ability to provide accurate information on product availability and delivery times contributes to an improved customer experience. Customers are more likely to be satisfied when their expectations regarding product availability and delivery are met. Omnichannel shoppers typically endure 4.2 poor experiences before switching from a specific retailer.

Cost Savings

Real-time visibility allows for better inventory control, reducing the likelihood of overstock situations. This, in turn, minimizes holding costs, prevents markdowns, and optimizes the use of storage space.

Challenges of Inventory Visibility 

Inefficient Order Fulfillment

The order fulfillment process becomes less efficient without real-time visibility, as lack of visibility can lead to stockouts or overstocking. This may often lead to financial loss due to missed sales opportunities and items selling after expiration dates.

Poor Supplier Relationships

Grocers heavily depend on their suppliers. A lack of inventory visibility can strain relationships as grocers may need help communicating effectively with suppliers regarding order requirements, leading to disruptions in the supply chain.

Ineffective Promotions

Coordinating promotions and discounts becomes challenging without real-time inventory data. Grocers may need help to align promotional activities with actual stock levels, leading to inconsistencies in marketing efforts.

Why is Inventory Visibility Important in 2024?

End-to-end inventory visibility is a competitive advantage for grocers handling multiple channels of fulfillment activity. This includes mobile apps, grocery apps, third-party platforms, and various modes of order fulfillment. A well-ordered inventory visibility ecosystem that provides real-time views of each SKU across the supply chain is crucial for grocers' fulfillment options.

In 2024, inventory visibility is a necessity rather than an advantage for retailers and an important business opportunity in improving profitability (64%). Being aware of the exact visibility of inventory enables retailers to calculate and devise innovative solutions for order delivery. 87% of grocers believe AI will help them improve pricing and inventory management. Profitability relies on fulfilling more orders and enriching customer experiences throughout the entire journey.

To invest in a streamlined inventory visibility system, grocers can focus on AI and technology in order management systems. A robust order management system aids in developing a fulfillment network and delivering omnichannel capabilities for diverse shoppers. Complete inventory visibility in 2024 is not merely a technological advantage but a business necessity. It enables businesses to prepare for the unexpected, make informed decisions, allocate inventory efficiently, and reduce shipping costs. Capturing accurate details upon receipts enhances data accuracy, and investing in inventory management software with enterprise-wide visibility is essential for adapting to an increasingly online purchasing environment.

Key Takeaways for Grocers

In 2024, grocers are adapting to changing consumer behaviors, with 86% of shoppers planning to engage both in-store and through digital channels. This shift towards omnichannel retailing emphasizes the need for a seamless customer experience, especially regarding real-time inventory visibility, which is crucial for sustaining profitable sales.

As customers step into the store, there is a growing need for store associates to provide real-time availability and personalized recommendations based on customer history. Efficient fulfillment capabilities are crucial to meet customer expectations and enhance their shopping experience.

61% of shoppers expected to use mobile apps in-store, the importance of a robust inventory management system becomes evident, catering to both traditional in-store shoppers and those relying on mobile applications.

64% of grocers see improving profitability as a significant opportunity. To capitalize on this opportunity, grocers must fulfill customer orders promptly while enhancing their digital experience at every touchpoint. This requires real-time visibility across various fulfillment channels, ensuring a smooth and enriching customer journey.

Conclusion

Enhanced inventory visibility is critical for grocers in 2024. It is not just about knowing what is in stock but understanding product movement and customer demand in real-time. By investing in inventory visibility, grocers can improve supply chain velocity, increase efficiency, meet customer demand, and enhance overall business performance.

Inventory visibility is not merely a technological tool but a strategic choice that positions grocers for success in the competitive grocery industry in 2024.