The Link Between Inventory Availability and Customer Loyalty
Stockouts and poor inventory visibility harm customer satisfaction and loyalty in many ways.
Online order fulfillment rates drop and shipping costs increase as items must now come from more distant facilities and be expedited or rushed.
Delays, backorders, partial fulfillment, and split shipments all lead to lower customer satisfaction and churn.
And labor costs increase because more staff effort is required to manage backorders, handle customer questions and complaints, and implement emergency inventory solutions.
How Traditional Retail Supply Chain Analytics Fall Short
The lack of real-time visibility and insights from legacy supply chain management systems and the inability of these systems to integrate unstructured and structured data add up to a reactive, rather than a proactive approach.
- Forecasts are based on historical sales data which doesn't account for real-time market shifts, sudden demand spikes (due to viral trends, for example), or external events (i.e., weather or other supply chain disruptions.)
- Manual counts and data entry errors result in inaccurate inventory.
- Siloed systems cause inventory availability blind spots between warehouses, stores, and various online marketing channels.
- Storing excess stock takes up costly warehouse space, ties up capital, and leads to increased product obsolescence.
- Finally, staff is less productive as they try to help customers, track down the root causes of inventory issues, and look for alternatives and workarounds.
Predictive Inventory Management and Customer Experience (CX)
Data shows a consistently strong connection between inventory availability and customer loyalty.
In one recent survey, 47% of consumers said they would go to another store or buy a different product if their desired product wasn't in stock.
Still, only about half of all organizations share inventory data across channels. This leads to customer frustration and decreased brand loyalty as shoppers are unable to seamlessly order across online versus in-store channels.
A smooth shopping experience depends on real-time inventory visibility. Brands that can provide up-to-date inventory information and meet their delivery commitments are better able to build and retain customer loyalty.
The Measurable Benefits of AI-Driven Customer Loyalty and Revenue
According to an Aberdeen Group survey, best-in-class companies that strategically position inventory to meet demand report improvements in customer retention, gross margin, and inventory turns.
These companies segment customer channels and products to ensure that inventory is where it is most needed and profitable — enabling 27% of customers surveyed leveraged inventory availability to gain market share through superior service.
And coordinating inventory across the entire supply chain in a multi-echelon inventory optimization strategy enables companies to cut expedited transportation costs by 20 to 50% while also improving in-store availability and customer service levels.
How AI-powered Inventory Optimization Enhances Inventory Availability
BeamUP's AI-powered data agents analyze and optimize inventory availability in real-time. They can analyze larger quantities as well as more types of data, more quickly — providing timely, actionable insights.
- Forecasts become more responsive to recent events, allowing brands to react before small issues become major problems.
- Real-time inventory tracking improves both operational efficiency and customer satisfaction.
- Improved inventory availability specifically improves customer retention rates.
- Predictive insights and automated recommendations enable retailers to take actions to improve stock levels and reduce lost sales.
Time to Level Up Your Retail Supply Chain Analytics
AI-driven inventory optimization improves stock visibility, availability, and customer experience. And stock availability is a critical factor that influences nearly every major driver of customer loyalty.
Explore Beamup’s AI-powered solutions for inventory optimization. Talk to our experts today.
