Skip to Content

3 Pitfalls of Inventory Optimization and How To Avoid Them

Woman taking inventory on tires

Frustrated customers don’t come back. With the right tools, you’ll know exactly what’s in stock to help give your customers exactly what they want.

Have you ever thought about what makes online shopping experiences so great? I’ll bet inventory management isn’t the first thing that comes to mind. But inventory optimization is a major driving force that often goes overlooked.

Shoppers in the digital age (like myself) have come to expect all the things that retail giants like Amazon do so well — seamless online browsing, quick shipping, easy returns, and fast customer service.

Learn more about inventory optimization

Unlock more productive options for inventory and order management.

And COVID-19 has completely accelerated the way consumers and retailers alike rely on those commerce experiences. Retailers across the globe have had to make fast pivots in how they run their business top to bottom. What’s changed the most? What’s traditionally known as “the last mile” — the processes and actions that happen after a shopper hits the buy button. Suddenly, digital transformation of the post-purchase experience moved to the top of the priority list — with order management and inventory optimization and visibility at the forefront of focus for many. 

Retailers across the globe have had to make fast pivots in how they run their business top to bottom. What’s changed the most? What’s traditionally known as “the last mile”.

The ordering and fulfillment process can either make or break a brand’s relationship with a customer. Customer expectations and lockdown requirements change quickly. Brands that can accurately display and market their inventory across their entire network, and give customers flexible fulfillment options, will come out on top.

Retailers fall short of providing a delightful ordering experience in these three major areas:

Inventory optimization pitfall #1: Fragmented post-purchase journeys 

It’s beyond frustrating to place an order and then be left in the dark without a way to check status updates until it arrives — if it arrives. We’ve all been there! 

Lots of times brands will have order management processes built on top of existing resources or enterprise resource planning tools (ERPs) that simply aren’t built for agility. As digital commerce continues to grow, traditional retailers need to find new ways to stay relevant, and keep customers happy on all channels.

A good order management system (OMS) can connect all underlying processes from commerce, fulfillment, and service to deliver a seamless customer experience. And more brands are realizing that having a single source of truth across all orders and records helps them deliver a better customer experience, leading to higher customer satisfaction. In fact, 79% of consumers say that an experience a company provides is as important as its products or services.

More than that, an OMS that’s able to glean inventory insights from one vantage point helps brands better handle fulfillment orchestration that’s optimal for their business. Ultimately, a consumer should be able to:

  • Browse locally available products on any channel
  • Select the fulfillment method they prefer – whether curbside or delivery
  • Check out using the payment method of their choice
  • Receive order confirmation via email or SMS
  • Use self-service options to check status, change orders, or cancel/return items

Inventory optimization pitfall #2: Over- or underselling inventory 

Have you ever placed an order for an item that said “Hurry! Only X left!” only to receive an email the next day letting you know that stock ran out and your order was cancelled? I was recently in the market for new curtains. When I placed an order for the ones I wanted in store, I got a confirmation and estimated delivery in real time from the store associate. 

When delivery day came and went, I searched my email and found a cancellation notice that had come the day before, almost a week after my purchase. Needless to say, I won’t place a new order with that company. This is, unfortunately, a scenario that happens all too often. 

Brands that can accurately display and market their inventory across their entire network, and give customers flexible fulfillment options, will come out on top. 

My experience isn’t unique — consumers want to be able to shop online and pick up in store, and vice versa. This desire for omni-channel shopping is even more relevant amid the COVID-19 pandemic, as more shoppers than ever opt to stay home and order online. This makes it even more important to make sure you track your inventory accurately.

Having a system that can provide real-time, location-level availability will help mitigate the risk of overselling or underselling products, especially under high-volume instances like holidays or flash sales. Consumers would rather be notified when an item they want is back in stock than place an order for something that’s not actually available. 

Inventory optimization pitfall #3: Not optimizing fulfillment processes 

Retailers that have multiple stores and distribution centers, in addition to their digital storefront, often struggle to optimize last-mile delivery.

To solve for this, make sure your OMS is agile enough to meet your ever-changing business needs. Build dynamic routing options so you can easily route orders to the best location for fulfillment. Base it on cost and proximity, minimizing split shipments, or other factors that are important for your business.

Implementing these best practices will help retailers avoid inventory bottlenecks and optimize physical and digital storefronts. 

Get started with better inventory optimization

Ultimately, shoppers crave experiences that involve the fewest clicks to checkout, are channel agnostic, and have fast, convenient delivery options. It can be tricky to make sure your OMS can quickly adapt to changing fulfillment processes. But a strong OMS can help you avoid all of these pitfalls.

Learn more about inventory optimization with Salesforce Order Management

Ally Herrick Associate Product Marketing Manager, Commerce Cloud

Ally Herrick is an associate product marketing manager for Commerce Cloud. Herrick leveraged more than five years of experience in commerce to launch the Salesforce Order Management product. She also oversees new feature rollouts by specializing in product positioning and messaging, creating impactful go-to-market plans, and showcasing customer success.

More by Ally

Get the latest articles in your inbox.