By Veronika Birnkammer, Head of Marketing APAC, Fluent Commerce
Imagine you’re scrolling your favourite social site. You see an advert for a product that looks perfect. With much anticipation, you click…… only to see the three dreaded words ‘Out of Stock’. Or you find the item, purchase it and you receive an email hours later, to say your order has been cancelled because it’s not in stock.
When customers click on a search or social ad that leads to an out-of-stock product it costs the retailer in three ways:
Wasted advertising spend that impacts Return on Advertising Spend (ROAS)
A negative brand experience for the customer
Having to cancel the customer’s order and refund them
So where do you start?
Firstly, your commerce platform probably gets its inventory data from an accounting system (aka your Enterprise Resource Planning system or ERP). A system that’s great for financial reconciliation, but it is used to store and pass on data? It doesn’t apply intelligence to that data that can then help inform your business strategies. If you were going to design a cool, hip, responsive website that delivered personalised shopping experiences, would you have an accountant do it? Of course not. The same goes for inventory experiences.
The inventory experience
Inventory availability and visibility might be just one fragment of the shopping experience, but it’s a very important one. It’s that little piece of data that tells you if something is in stock or not. If it’s available in your size and the colour you want, and available at your local store. Get it wrong and it leads to disappointed customers and wasted ad spend. Unfortunately getting that little piece of data to show up accurately and in real-time for your teams and your customers can be really, really hard.
First, there’s the accounting system (ERP) problem. ERP systems are designed as financial systems of record. Think slow and steady wins the race. Except it doesn’t. Not anymore. They just can’t move at the speed of today’s digital commerce.
ERP systems like to consume transaction updates from Point of Sale (POS) systems one batch at a time. They only like to send inventory updates one batch at a time too. What’s more, while they’re very smart from a finance perspective, when it comes to inventory, they’re not. Most of them can only send big dumb batches of all inventory positions, like the most important ones, or the ones that have changed. It’s like asking for a weather forecast for your own city and only being able to get a dump of every city in the country. Not very efficient or helpful. Even worse, if too many people ask at the same time, it can’t keep up. But digital commerce doesn’t happen in batches. And digital shoppers don’t line up one at a time.
Real-time inventory data
Instead, digital commerce happens everywhere and all at once. This means you need something that can keep inventory data in sync across all your warehouses, stores, and systems, in real time. Something that can be queried by thousands or millions of people at once without getting bogged down. That operates with the speed and flexibility required by modern digital commerce.
Enter modern Inventory Data Processing and Distributed Order Management (DOM).
Despite the name, one of an Order Management System’s main jobs is actually to figure out what inventory you have available so you can show customers an accurate view of what’s ‘in stock’ across all your digital channels. It consumes inventory feeds from other systems. And serves them up as fast as digital shoppers can browse. Across all your digital channels.
And for those retailers and brands with really heavy inventory needs, like BIG inventory, there are some cool new tools in the works for processing massive inventory data sets at scale. Really fast. Like at the speed of digital commerce.
Asking the right questions
So who do you need to contact in your organisation about the quality and speed of your inventory data? If you’re a marketer, I’d encourage you to take a look at your inventory data. It could be the key to not only improving your ROI on advertising spend this year, but it will improve the experience for your customers. And as we know, a great customer experience builds valuable brand loyalty.
