Navigating Economic Challenges: The Crucial Role of Inventory Accuracy in 2024

As we step into 2024, the global economic landscape appears challenging, marked by a prolonged phase of below-average growth. Prospects for economic growth are lower than they have been for decades (BMWK, 2023). This economic downturn is mirrored in consumer sentiment, particularly in Germany, where the year started with noticeable declines in economic and income expectations, as well as a dip in the willingness to buy (GfK, 2024). Adding to the concerns, income expectations fell in January, and inflation has once again reared its head (GfK, 2024). To compound matters, customer experience quality, in particular positive emotions, witnessed a decline in 2023 resulting from, inter alia, staffing shortages and supply chain constraints (Forrester, 2023). These issues highlight the ongoing struggles faced by both consumers and brands.

Overstock and Out-of-Stock Affecting Customer Satisfaction and Profitability

In this challenging economic climate, factors influencing customer loyalty and experience have become paramount. Retailers now should recognize the need to prioritize customer needs to drive business growth. One of the pivotal aspects of ensuring business continuity and customer satisfaction lies in efficient inventory management.?

Out-of-stock scenarios can be costly for retailers as customers face inconvenient situations such as needing to switch item, brand or package size. Sometimes this even leads to customers deciding against buying or choosing another retailer. These issues can be traced back to poor management of merchandising and logistics functions which are responsible for 70-75% of out-of-stock conditions (IBM).

Additionally, effective storage space management is crucial in times of economic uncertainty, where utilizing space profitably becomes imperative. Poor logistics management can lead to overstocking, causing cash flow problems or unnecessary discounts and thus, result in large losses for retailers. Still, most firms hold an excess amount of stock, tying up substantial capital that could be used in strategically more efficient ways.

The Solution: Inventory Accuracy and Management

The crux of solving these challenges lies in inventory accuracy and effective management. A staggering 56% of retailers mention inventory accuracy as a challenge for their omnichannel operations (Forrester, 2019). In particular, storage issues are cited by decision-makers to cause problems in their warehouse (Zebra, 2023). These challenges highlight the need to invest in order management systems going beyond standard order routing features, also supporting inventory accuracy and management.

Our inventory management puts an end to siloed systems and provides real-time visibility of stock levels and inventory transparency across all warehouses, stores, and dark stores. Knowing exactly what is available at which facilities is the basis for effective replenishment management and the rapid detection of problems with inbound processes, reducing the likelihood of out-of-stock scenarios. Moreover, having an overview of stock levels over all facilities in one single system is essential for optimally distributing inventory across locations and fully utilizing warehouse capacities. Finally, customer experience is improved by providing accurate information about availability on facility level to end customers, e.g., for BOPIS use cases.

Real-time inventory is complemented by our demand forecast that predicts future customer demand based on past sales levels and other relevant indicators. Thus, not only current inventory is made transparent but also future stock levels are optimized and over-stock scenarios are prevented while sufficient stock levels to fulfill customer demand are ensured.

Kickstarting 2024 with Profit-Maximizing Inventory Management?

With real-time visibility of stock levels and transparent inventory management across facilities, our system enables businesses to navigate the economic uncertainties of 2024 with confidence. By addressing issues of overstock and out-of-stock scenarios, we empower businesses to optimize storage space, reduce unnecessary losses, and enhance overall customer satisfaction. In times of economic turbulence, investing in innovative fulfillment solutions thus becomes a strategic imperative for sustained success.