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Five trends putting pressure on Inventory Optimisation

Author: Ian Warburton

inventory1. Growing consumer expectations

As customers get used to better brand experiences, customer expectations of service levels will also increase. Consumers increasingly expect to be able to find what they want and get it quickly - sometimes even via same day delivery. Organisations that can’t meet this demand will find their customers won’t wait for them.

2. Segmentation and personalisation in response to increasing consumer sophistication

If a customer can’t get it in just the right colour, size or shape then they will look to others that can help them to express their individuality. Tailoring services and increasingly larger ranges are tactics that aim to provide the customer with exactly what they want (and are willing to pay for!).

3. Selection as acquisition and retention strategy

Increasing selection with wider ranges, frequent product refreshes and line extensions are not just a point of differentiation, but also serve to improve site stickiness, increase search engine market share and feed marketing campaigns that grow customer lifetime value.

4. Increasing rate of technological change

New product categories and subcategories are being created or reinvented at an astonishing rate. We can now buy drones, internet connected doorbells and thermostats, or order cars with adaptive LED car head-lights. These high-tech products can quickly become obsolete or superseded, potentially leaving organisations with expensive dead stock.

5. Contracting markets

2018 saw a number of large high street brands close their shutters for the last time. At the same time the Automotive industry is seeing record decline across many markets, including key growth markets such as China. Organisations will be keen to optimise inventory holdings at times of reducing demand.

The dangers of poor inventory optimisation

Download the guide to Inventory OptimisationWith profit margins increasingly under threat, the need for a highly optimised inventory is more important than ever. The wrong approach can build in cost and complexity and have disastrous effects on profitability and the customer experience. So, how can you be sure you that your inventory is optimised?


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