Chapter 8

Omnichannel Inventory Management

In this chapter we look at ways to structure your data and business so that you can help prevent stock-outs, keep sales coming in, and keep your customers happy.

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By Chris Tanner & Derek O'Caroll

What's Inside

Telling a customer their item is out of stock after they have made a purchase is very poor customer service. Especially today, when customers expect next day delivery in most cases. There is no excuse for keeping the customer waiting.

Having accurate inventory levels across your channels and preventing double selling of the same item are some of the most important things you can do to ensure a happy customer experience.

Better inventory management will also help you maintain the correct amount of stock, improving cash flow and ensuring you always have at least one left to sell.

In this chapter we look at ways to structure your data and business so that you can help prevent stock-outs, keep sales coming in, and keep your customers happy.

Omnichannel inventory management

Our panel of retail experts discuss each chapter in detail with the authors of the Omnichannel Survival Guide


Good inventory management is one of the foundations of retail. Too little inventory and you’ll miss out on sales, or you’ll struggle to deliver on time. Too much inventory locks up cash, and might not sell until the season is over or the product is superseded. Getting the right balance is a never ending challenge. The ‘right amount’ of inventory also varies with time. Sometimes, in quiet periods, you might be OK with just one or two in stock, but in busy periods you might want to ramp that up to ten or a hundred.

As well as how much you have in stock, you need to think about where it’s located, and when it can be made available to customers.

You might have a couple of retail stores as well as an ecommerce website. If you’ve got ten on the shelf in store A, what happens when someone comes into store B which has none? Clearly you want to make the sale, but how do you enable this? And what if you sell the last unit online just moments before a customer walks into the store wanting the same one?

46% of small and medium-sized businesses either don’t track inventory or use a manual method to do so. Source: Wasp Barcode

Some of your products might be available to ship direct from your supplier to the customer, and some might only be available to pre-order with a two week lead time. How can you make this clear to the customer during the purchase process, and deal with the logistics as orders are processed?

To see what makes a good inventory management system, first let’s look at why you need to know what’s in stock:

So you can tell customers if you have something, and whether they can buy it.

  • So that you can stop selling when items reach zero inventory.
  • If you don’t have something, so you can see when more are coming in.
  • To compare with sales data, so you can see when to order more.
  • To have a record of what goods you own, and their value.

Primarily, inventory management software is for managing availability. If you have something in stock, you know you can sell it. In a single physical store this used to be done just by looking at the shelf, but as soon as you have multiple channels, or have suppliers with fast, reliable delivery, you need a more advanced system.

omnichannel guide

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