Inventory and waste. It’s a delicate balancing act that retailers repeat each day, all through the day. And it’s not going to change any time soon. Running out of stock is the surest way to erode customer satisfaction, but having too much inventory on hand takes up valuable store space and, all too often leads to high levels of wastage – especially when you consider the new consumer focus on fresh items. However, with a focus on the right priorities along with the use of the right AI-enabled technologies that can sense and respond to demand-changing factors in real time, retailers can strike an accord between these seemingly competing factors.
The changing global perspective on waste
There is an ever-increasing focus on waste around the globe – and with good reason. Some estimates suggest that the world population will reach nine billion by 2050, but current statistics show that 50% of all the food produced on the planet is wasted or lost before it can be consumed. To combat this staggering statistic and its implications for our future, retailers have a responsibility today to consider what role they play in contributing to waste, as customers become more eco-conscious and retailers around the world consider the very real sustainability issues facing them and the planet.
Using the intelligent computing power of AI and machine learning, retailers can easily identify, track and trace, and better analyze best-by dates on fresh products and data to inform their next order quantity and delivery date in real time. Using these solutions that simply do what humans cannot, retailers can reduce huge amounts of waste in their supply chains.
Retailers must have an intense focus on inventory
Supply chains are more complex than ever before in support of omnichannel retailing. As such, retailers are increasingly deploying solutions that enable agility and cost-effective inventory fulfillment, with seamless traceability and information at any touchpoint. Why?
The cost of an out-of-stock is massive. According to Forbes, 55% of consumers will skip the purchase or buy somewhere else the first time they encounter an out-of-stock, and that number climbs to 70% the third time an out-of-stock occurs.
Understanding the critical “must dos” for retailers
Inventory and its impact on retailers bottom line and customer satisfaction is more critical than ever – and will remain that way for the foreseeable future. The related issues of waste not only have immediate financial implications for retailers bottom line, but longer-term impact on global sustainability issues. Retailers must understand the imperatives to thrive in the immediate future and how addressing them will set the stage for longer-term success.
To learn more about inventory, waste, and the other imperatives for retailers today, download our new ebook, Survive or thrive: Top retail trends for 2020.