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Fluent Commerce wants to ensure retailers sell only what's in stock
The software company's latest data product provides inventory visibility.
For retailers, two steps are essential to completing a sale: An item has to be available to buy, and then it has to be delivered to the customer in a satisfactory time.
In the store, these were often coupled together, and easy to complete. A customer saw a product available on the shelf, grabbed it and took it home.
Ecommerce broke them apart.
A T-shirt that is listed on a digital shelf must be available for an associate to pick from a real one. Then, the T-shirt has to be positioned in proximity to the customer so it can be delivered in a timely manner.
As more ecommerce fulfillment methods have emerged, this path has evolved over time, too.
The initial wave of ecommerce growth put a focus on the fulfillment and delivery part of the equation. Items were largely sent to warehouses before they were sent to the customer. The inventory The trick of much logistics innovation during this period, with Amazon at the vanguard, was to improve the speed and efficiency over the last mile, in order to delight customers and keep costs down.
But as more retailers who started in brick-and-mortar stores add ecommerce capabilties, ensuring that an item is available on a shelf is available to buy is getting more complex. These retailers see stores as important pieces of their ecommerce operations.
That presents another issue: If an item is purchased in the store, it has to register in the online assortment that the item is no longer available.
If not, it creates the potential that an item listed online won’t actually be available, and could be oversold online. Without this step figured out, the fulfillment and delivery process can’t even start. And if an item is oversold, it can mean lost revenue.
“Selling a product and then not being able to fulfill it is probably about the worst customer experience you can offer,” Fluent Commerce Chief Strategy Officer Jamie Cairns told the The Current on the floor of the NRF Big Show. “I'd much rather be told, ‘Sorry, we don't have one of those,’” than to be told that a retailer doesn't have the item, and then see the order canceled.
Cairns said this all traces back to one issue: Inventory visibility.
If the data on what’s in stock isn’t presented in an accurate and up-to-date manner, the potential for overselling only increases.
While stock-outs gained a lot of attention during the supply chain crisis of the last two years, Cairns said overselling is a longstanding issue in retail. A recent study by Incisiv concluded that a lack of inventory visibility is a top-three issue facing retailers.
To address it, Fluent Commerce extended its experience providing order management software for retailers such as L’Oréal, Aldo Group and Prada to a new data product.
Called Fluent Big Inventory, the hub uses machine learning to ingest data from disparate sources ranging from warehouses to stores to suppliers, and provide a single picture of available inventory.
Along with bringing data together, time is also a big part of the solution. In some cases, retailers may only send inventory updates to the systems that operate ecommerce once a day. So if that update is sent in the morning, and someone buys something in the afternoon, the listing could be out of date when the sale is made.
“We've seen a huge increase in the speed and processing power of inventory, which means we can do it more often, which means our retailers can send us more frequent updates about stock movements in their business,” Cairns said.
Currently, customers using a pilot are seeing greater than 50% reductions in oversell, Cairns said.
Given the importance of data in omnichannel retail, inventory visibility has a role beyond direct sales. It can help to power the demand-generation side of ecommerce, such as search and merchandising, personalization, recommendations, display ads and demand forecasting.
“Making other systems inventory-aware allows them to be optimized and to deliver better value,” Cairns said.
As the number of capabilities available to retailers grows, such foundational data will only become more important. Those who have timely and accurate information will be in the best position to use these strategies to take their business to new heights.
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This Week in Commerce: Nike earnings, Fed rate decision
Check out the agenda for March 20-24.
Welcome to a new week. Earnings offer a bellwether for the consumer economy this week, as key brands like Nike and General Mills will report results. Elsewhere, all eyes will be on the Federal Reserve as it announces its latest decision on interest rates.
Fed interest rate decision: The Federal Reserve Open Markets Committee announces its decision on whether and by how much to hike benchmark interest rates following its two-day meeting. The Fed has been hiking interest rates rapidly in an effort to bring down 40-year-high inflation, but slowed the pace at the February meeting with a 0.25% increase. (March 22, 2 p.m.)
Durable goods orders: The U.S. Commerce Department releases data on orders from manufacturers for goods that are designed to last more than three years. This is considered an indicator of business activity. In January, orders dropped at the steepest rate since April 2020. (March 24, 8:30 a.m.)
Monday, March 20: Boxed, Foot Locker
Tuesday, March 21: Nike, GameStop
Wednesday, March 22: Petco, Chewy
Thursday, March 23: General Mills, Express