Retail War Stories: Inventory Management

Posted by Matt Rhodus, Retail Vertical Marketing Expert, NetSuite

Editor’s note: This is part of a series of retail “War Stories” the team at NetSuite has gathered during its many discussions with retailers and brand manufacturers about the biggest challenges they are faced with today.


The Challenge: We can’t commit inventory for fulfillment in a timely manner

During the 2014 holiday season, a women’s specialty retailer, recently given a second lease on life after a private equity firm purchased it from bankruptcy, suffered another setback when it was removed from Amazon because it couldn’t commit inventory for fulfillment in a timely manner.

Without a reliable view of inventory across its multiple channels: in-store, online and third party marketplaces, the retailer couldn’t fulfill orders accurately. For any retailer, facing this problem, especially during the holiday season where, according to NRF, these two months typically account for about 30 percent of a retailer’s annual sales, was very, very bad. For a retailer whose reputation had already been dealt a serious blow by its bankruptcy filing, this was catastrophic.

A cursory look at the retailer’s IT systems revealed the heart of the problem: a tangled web of disparate legacy systems and manual processes that obscured its view of inventory. This retailer used a homegrown system to manage items, another to handle ecommerce inventory and fulfillment, and another to manage in-store sales. Other processes were handled manually or with Excel. The resultant data output was clothed in truthiness -- leading to a host of problems that would make it nearly impossible to get customers the goods they wanted within the promised time frame. Safety stock was too high, assortments were wrong, orders were unfulfilled or incorrectly fulfilled, and adequate staffing levels couldn’t be ensured in the stores.

Without being able to respond to customer’s demands; sales, customer service and brand loyalty all eroded.

Solution: Gain an enterprise-level view of inventory

Facing a mandate by the CEO that inventory must be visible across all channels as soon as possible, the retailer was looking at a seven-figure investment to repair its front-end systems. Yet, it realized the shortcomings of this Band-Aid approach. With so many different, disconnected systems and processes that weren’t automated, there was no way to ensure a single version of the truth. And if the back-end is fragmented, there’s no way to deliver reliable data to the front-end systems. To execute a seamless experience, this retailer needed to harmonize customer, order and inventory data onto one platform that would then feed that data to customer-facing point-of-sale (POS) and ecommerce software.

Get on the Stairway to Customer Experience Nirvana

For this retailer, the first step on the Stairway to Customer Experience Nirvana began with getting its foundation in place with a platform that offers a real-time view of customer, order and item data so that any channel can consume from that base.

Taking this step will help it to accomplish the most important aspect of shoring up its brand identity – gaining an enterprise level view of inventory across channels that will enable it to get the customer what they want when they want it.

From there, this retailer could focus on activities that maintain customer confidence, access online marketplaces, increase sales, and shift focus to future initiatives: planning optimization, next generation POS and in-house 3PL.

If this retail “war story” sounds very familiar to you, we are here to help! We’ve prepared a worksheet to help guide you along your own stairway to customer experience nirvana. Download it here


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