Here’s what prominent retailers are doing to enhance inventory management.
With inflationary pressures and global economic uncertainties, no one knows what the future will bring for retailers. Because e-commerce customers expect fast delivery times, many retailers have struggled to manage their inventory stock levels and stay competitive. USA-based Kohl’s department stores are revamping their inventory management systems and practices after net sales fell more than 7% in FY2022 and margins shrunk by nearly 5%. Poor inventory visibility and increased stock carrying costs forced store closings and bankruptcy for Bed Bath & Beyond and Revlon. So it’s not a surprise that real-time inventory management was at the top of the list for many retail companies at the Jan 2023 Annual NRF trade show.
Those market trends have made real-time inventory management a top priority for retailers.
The days of stacking inventory to the rooftops are over. Many retailers see faster inventory turnover and optimization as the key to success. This involves real-time inventory tracking – where “real time” is measured in millisecond or sub-millisecond database response – so business leaders can make informed decisions about their inventory operations. The elements can include tracking point of sale (POS) data, warehouse stock levels, fulfillment, supplier performance, and other inventory-related data.
Both retailers and consumers require accurate inventory data that is available immediately, such as the quantity and location of products ready for sale. Some inventory databases force developers to pre-calculate, pre-aggregate, or manipulate data before using it. This causes data to become stale. By investing in real-time inventory database technology retailers can identify sales trends, reduce inefficiencies in their supply chain, and meet online and mobile customer expectations for accurate information.
The pandemic -induced consumer behavior of buy-online-pickup-in-store (BOPIS) and curbside delivery options are here to stay. Sixty-eight percent of automotive merchants, 61% of grocery merchants, 50% of general retailers, and 42% of convenience stores and pharmacies plan to offer that fulfillment innovation. This requires real-time inventory data for order management, inventory tracking, and order fulfillment to keep up with inventory and logistics changes.
With consumers back in stores, retailers are looking to elevate in-store and fulfillment experiences. One digital tool employed by retailers (and expected by consumers) is local store inventory checks so that consumers can know if their desired items are available at the store near them. These features also benefit the retailer because it gives them inventory visibility for stock optimization.
Major brands are busy updating their systems. American Eagle is investing in real-time store inventory management software including updating its POS systems. And Macy’s spent more than two-thirds of its 2022 $1.3 billion in capital expenditures on inventory management analytics and other supply chain and inventory management software modernization projects.
Another retailer, Levi Strauss, created a real-time data repository for machine learning models and algorithms to predict the inventory positions required for every type of product in various channels. Its goal is to reduce excess stock through predictive analytics and to ensure accurate inventory counts for online consumers.
To compete for the profitable omnichannel customer, retailers create innovative ways to enhance the shopping experience and maximize sales. Vector similarity search (VSS) is well suited for retail use cases because developers can build shopping applications where consumers can identify products based on characteristics such as color, size, texture, and style.
This can be particularly useful in the fashion industry, where customers may look for products by category. For example, a clothing retailer could use VSS to identify products that are similar in style to a particular item in which a customer has expressed interest, with personalized recommendations that match the customer’s preferences.
Retailers implementing VSS require a high-performing database to store and query vectors, ensuring instant results for customers.
To support inventory visibility and AI-enhanced customer experiences like VSS, an inventory database must be highly performant and flexible. It needs scale to deliver fast and accurate inventory information across multiple locations. With a real time inventory database, retailers ensure consistency across all channels, satisfying demanding customers.
Retailers rely on Redis Enterprise to deliver the data required for engaging customer experiences and responsive, resilient applications. With a single investment, retailers can use Redis to solve multiple retail scenarios.
For more information about real-time inventory best practices, read our solution brief, Real-Time Inventory With Redis Enterprise. We review the ways that Redis Enterprise customers increase inventory visibility and deliver AI-enhanced, personalized customer experiences.