Retail Inventory Management: Brick-and-Mortar Isn’t Dead, Just Different
The past several years saw a giant shakeup in the retail industry as e-tail began to dominate the marketplace. With all the vast choices and speedy delivery of online shopping, why would anyone want to leave their home to shop in a real store?
It seems consumers want the best of both worlds. They want the convenience of shopping from their couch, but they also want the human touch of interacting with products before they buy, and discussing them with another person, in person. Strictly online startups have recently experimented with retail pop-up stores, and discovered that online sales increased when shoppers had an in-store experience. Previously available only online, brands like Casper, AllBirds, and Glossier have begun opening brick-and-mortar stores, and plan to open more in the coming year.
Termed “brick-and-mortar 2.0” by Fast Company Magazine, these new stores aren’t intended compete with their online parents. Rather, they will complement the online shopping experience. Convenient features of online shopping – having your credit card on file for speedy check-out, for example – will be mimicked in the retail stores. In-store purchases will be recorded in your online account. Amazon is even testing facial recognition for Whole Foods shoppers to make grocery shopping faster and easier; just walk in, get what you need, and walk out.
To match the online availability of products, 2.0 retailers will need to maintain a certain quantity of products on hand in stores. For previously online-only retailers accustomed to warehousing large quantities of inventory, this raises the question of how to store and manage smaller quantities of inventory in a brick-and-mortar retail environment. Low overhead is key to the success of the new retail stores, to match their online businesses’ low cost of sales, and space-efficient storage is a big part of reducing costs. Use of vertical overhead space in particular can keep a store’s overall footprint small, while maintaining sufficient inventory to meet demand. Systems such as vertical shelving carousels and garment carousels make the most of overhead space in a storage area. They can even be incorporated into the retail space as a design feature.
Technology, too, will play an ever-larger role as shoppers’ habits and preferences are tracked over time. This kind of data will help retailers predict demand and apply JIT (just in time) inventory controls for their brick-and-mortar locations. Between storage-space management and data management, retail stores of the future will be able to operate with maximum efficiency, in tandem with their online stores, to give consumers what they want: the best combination of e-tail and retail.
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