2022 is almost ending, and so is the chaos welcomed by the coronavirus. While the world has now adjusted to the new normal, one thing that has become more popular is the vast digital shift of the consumers and the business in the retail spectrum. According to Statista, e-retail sales surpassed 6.5 trillion U.S. dollars worldwide which in fact is a whopping number, ever since the advent of ecommerce shopping.
This is precisely where D2C business steps in as a disruptor that transforms the ever-evolving e-commerce landscape. Consumers today prefer buying products directly from the manufacturer's website. The reason being the undivided attention that they get to establish with the brands. Reports suggest that direct-to-consumer (D2C) e-commerce sales in the United States reached 111.5 billion $. Many top D2C brands like Everlane, AllBirds, and StitchFix have emerged as the finest D2C ecommerce marketing lessons for many ecommerce businesses.
Are you one of those digitally savvy business owners trying to introduce a D2C business model for your brand? Then you must be curious about the success mantra behind these new-age consumer-first brands. We get you completely, but before delving into any more details of the same, let us first ask you; are you constantly chased by the nightmares of running out of stock in your inventory when huge piles or orders are pouring in from your marketplaces?
If the answer is yes, then you need to know about inventory accuracy before analyzing the strategies and business models of the famous d2c brands. Wondering why?
Inventory accuracy is the prime key to retaining audiences in the d2c ecommerce space. While many factors demand more space and attention in a d2c business, the right inventory management system tops the chart for obvious reasons combined with the statistics below.
-74% of businesses have experienced delays in shipments and much longer lead times
- 72% of retailers plan to reinvent their supply chain with real-time visibility enabled by automation, sensors, and analytics
- Worldwide cost of inventory distortion (including shrinkage, stockouts, and overstock) is an estimated $1.1 Trillion
It is now evident from the above stats that poor inventory accuracy has already cost losing valuable customers in the d2c ecommerce. Contrary to these are the reputed d2c brands getting themselves the best inventory management system integrated with modern technologies like AI, data analytics, and cloud computing. This can leverage the overall operational efficiency by boosting the business's customer experience. Read on in detail about inventory accuracy and its impact on a d2c business.
What is inventory accuracy?
As the name suggests, inventory accuracy is a way to regularize the inventory standards based on the inventory records and your actual physical inventory levels. While any online business strives to keep the difference at the bare minimum possible, the constant movement of orders pouring into different warehouses makes it daunting.. All you need to do with your overall inventory and the customer orders on par with the supply chain excellence is to have an inventory management system that keeps track of every order at different warehouses.
With on-demand logistics being the latest trend, sticking to the manual ways of inventory management could backfire. Let’s delve deeper and find out how traditional inventory management could affect your logistics business and why it is essential to maintain inventory accuracy in d2c ecommerce.
Adverse Effects Caused by Traditional Inventory Management System
- Inability to forecast the demand with accuracy
A proper inventory management system helps eCommerce sellers make smart and well-informed decisions. Just the opposite, a traditional system would be incapable of accurately forecasting the demand for the stock. It will drag your company behind in the competition and tend to bear the immense loss.
- Error-prone manual system
The manually operated traditional inventory management systems are more prone to error. Rigid rules and procedures can minimize these errors, but you cannot rule out the possibility of error in its entirety.Upgrading to digital inventory software would be a better option to keep your supply chain competitive and well on track.
- Problem in connecting the data points
With a traditional inventory system, it becomes troublesome to get answers to several important questions, such as:
- For how long has a product been on the shelf?
- What is the threshold quantity of a selected brand in the inventory?
- What is the mechanism to track the inventory in case of multiple warehouses?
The limited human resources are sometimes insufficient to collect all the requisite data points and organize them into meaningful information. Furthermore, the time required for task completion also increases with the increase in such requests. An automated inventory management system can deal with all such questions in a well-organized manner and well within
Amid the dire need for sophistication, depending on manual inventory management systems could derail the progressive speed of your ecommerce business. This is where the need to replace the traditional model with advanced inventory management software can make a big difference.
Benefits of inventory management software
Here is a quick look at the benefits these automated tools can ensure to your business.
- Saves your time
The advanced software can track and update inventory in real-time. You can save considerable time when integrated with other systems like POS software, as you don’t need to update spreadsheets or count the items manually.
- Enhances accuracy
Real-time inventory management software can increase the chance of accurate inventory tracking by reducing the risks of human errors. This avoids instances of over-stocking, thus mitigating the cost and decreasing the reliance on manual intervention for tracking your acquisition.
- Just in Time
Implementing the lean manufacturing or Just In Time (JIT) technique with the inventory management software ensures ordering and receiving the stock only when needed. It lessens your dependence on warehouse storage, thus reducing the inventory holding cost appreciably while ensuring timely order fulfillment. This method is ideal for ecommerce companies that develop customized products.
Concisely, investing in robust software for inventory management can optimize your cost, boost accuracy and reduce the management time. Hence, these tools always hold the upper hand over their traditional alternatives.
Running a D2C commerce business now is a huge challenge than ever. Hope this blog helped you understand how and why inventory accuracy paves the success path for your D2C business. The right inventory can help you earn a handful of happy customers, boost your success rate and also helps you prevent any losses or damages that might occur due to over or understocking of products. Acknowledging the demand for inventory accruacy, If your immediate step to address it is to hunt for the best inventory management system, head on to our inventory management section. Yes, we are just a call away to brief you in detail about EasyEcom’s intuitive, sophisticated inventory management software.