What's Omnichannel Inventory Management

It has happened at least once in our lifetime.

We found a product with a good price in an online store, and decided to pass by the physical location, only to find out that the product is actually out of stock. 

That's disappointing 

And depending on how often it happens, it might pull us away from that business.

Well, if your company moves both in the digital and material world and doesn't have an inventory strategy aligned across your sales channels, you could face some serious issues with your customers.

The solution?

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It's called Omnichannel Inventory Management 

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What's Omnichannel Inventory Management?

A quick answer is how your business maintains the same stock levels across your different channels. 

This means keeping track of the products available in your warehouse across all the sales channels, like a website, a brick-and-mortar shop, or even a mobile app, so you don't have to create a separate inventory strategy for each one. 

One of the main advantages of using a consolidated approach is seeing what products you have in store in real time, avoiding common inventory issues such as overstocking or not owning sufficient stock right when your customers order it. 

And behind the scenes, your team gets better visibility and control, so you can make smarter decisions and respond faster when things change.

So yes, you could say learning about omnichannel inventory management is important.

Key Terms to Know

• SKU: This is the code you use to identify each product in your warehouse.  Managing SKUs the right way is fundamental for really knowing what's in stock and where. 
• Inventory visibility: And we don't just mean having a spreadsheet with your products; owning real inventory visibility means being able to know when exactly an item is used or purchased. 
• BOPIS: Also known as buy online, pick up in store. Happens when your customers place an order online and expect it to pick up their purchases from your physical store.
• Order management system: This is the software that helps you track and manage customer orders across all your sales channels. A good OMS connects with your inventory system to help you fulfill orders accurately and quickly.
• Warehouse management system:  Commonly referred to as WMS, it is the platform overseeing all the processes happening in your warehouse. It works closely with your inventory and order systems to keep everything running.

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Core Elements of Omnichannel Inventory Management 

Alright, so we know the basics up to this point, but what really makes an omnichannel approach work?

Most of the time, you'll find three key components working together successfully.

Inventory visibility 

Remember, we mentioned visibility above?

It's really that important. 

Visibility is what makes omnichannel inventory management work. When your inventory is compiled into a single system, you can develop an accurate sense of awareness about what's going on with your sales. 

This might seem part of an administrative routine, but in hindsight, it's the ground to makes all the difference. 

You no longer have to guess how much stock you need, wasting money and storage space in the process, you just really know how much stock is required and for what.

Fulfillment options

You know how ChatGPT loves to say: In today's digital world…

Well, cringe as it sounds, it's not far from being true.  We do live in a digitalized reality, both businesses and customers operate in a market that moves faster than ever.

Offering flexible fulfillment methods can give you a serious advantage over the competition.

Among the most common fulfillment alternatives, you'll find:

• BOPIS: The benefits of buying online, without having to pay for shipping prices.
• Ship from store: Instead of only shipping from a central warehouse, you can fulfill online orders from store locations to speed up delivery.
• Curbside pickup: A contactless option that’s especially popular for convenience and safety.

Technology 

Because IT is what keeps omnichannel inventory management working.

How else could you maintain a record of everything? 

To optimize your inventory management system, there are some technologies that make sense to implement.

• AI and machine learning: Artificial intelligence is speeding up processes everywhere, even across warehouses. From predicting demand, optimizing stock levels, and even identifying trends, these technologies are here to make everything better.
• OMS: The process you need to follow to manage incoming orders from literally every channel, so it's easier to direct them to the best fulfillment option.
• RFID: These tags help you track inventory movement in real time with more accuracy than traditional barcodes.
• Warehouse management system: Without a proper structure, things can quickly become chaotic in a warehouse. A WMS keeps operations efficient from picking to shipping.

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5 Reasons To Not Ignore Omnichannel Inventory Management 

Okay, so omnichannel inventory management seems like a big deal, but how it benefits your company as a whole can be explained in five simple advantages.

Efficiency 

Inventory management has a reputation for being a source of headaches. 

Especially if you're growing, and it just seems to be stock all over the place. 

The problem doesn't come from the inventory itself, but rather it's the natural consequence of a weak management system.

Using an omnichannel approach gives you the basis to implement a unified system across your entire business.

Inventory balance 

Do you know what's the biggest challenge of running an inventory?

Yes, you guessed it.

Figure out how much stock you really need.

Relying on real-time visibility is seriously helpful to stop making imaginative numbers. Understanding what products are the most demanded and where gives you that insight into what stock should never be absent.

More sales

It doesn't matter what industry you belong to. 

As a business leader, one of your key goals is to bring more leads to the table.

By making it easier for customers to shop and receive products on their terms, you’re opening the door to more sales opportunities.

Faster fulfillment 

This is precious 

Especially during busy seasons.

When your systems work as one, you are able to direct orders to the most efficient fulfillment location instantly.

This not only puts a smile on your customers' faces but also minimizes delivery times and shipping costs.

Happier customers 

And speaking of smiles 

With your inventory connected across all channels, your customers can see what’s in stock, choose how they want to receive it, and do little things that can go a long way to promote trust and loyalty around your brand.

Challenges of Omnichannel Inventory Management 

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Nothing that works is ever free of facing roadblocks at some point. 

When you're planning an omnichannel approach, there's a chance you'll find one or two obstacles ready to make things difficult.

Knowing what to expect helps you plan better and avoid common pitfalls.

Here are a few key considerations to keep in mind as you build or improve your strategy.

Your data is a mess

Seriously, data can either make or break any business strategy, but when it comes to inventory, you get the sense that there's more at stake. 

This is why it's so critical to maintain your inventory data updated across every single platform your business owns. 

Sounds like too much to handle?

You can rely on inventory management software to handle it all. 

It's not meant to be done overnight. 

If you want to work with an inventory management strategy that's ready in a day, then you probably need to think twice about following an omnichannel approach. 

If your business has different processes and requirements for each sales channel, then finding a way to align everything is definitely going to be complicated.

Reverse logistics happen.

Returns are a natural part of retail, especially in an omnichannel world where customers might buy online and return in-store, or vice versa. 

Handling returns efficiently and updating inventory accordingly can be complex. You'll need clear processes and systems to manage this without disrupting the rest of your operations.

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A Checklist to Set Up Omnichannel Inventory Management

1. Check your current inventory systems:

• Audit all the platforms you use at the moment.
• Search for any gaps, delays, or data issues.

2. Go with the right inventory management software:

• Look for alternatives capable of integration and designed to keep you always on the loop.
• Choose the one with real-time synchronisation and user user-friendly interface. 

3. Integrate your OMS

• Make sure orders flow  across platforms
• Enable smart routing to fulfill from the most efficient location.

4. Rely on real-time visibility 

• Use tools like RFID or barcoding for accurate tracking
• Make sure your staff (and customers) see up-to-date stock info

5. Work with flexible fulfillment options 

• Set up BOPIS, ship-from-store, curbside pickup, or delivery
• Test the workflows from both the employee and customer perspectives.

6. Monitor for performance 

• Track key metrics like fulfillment speed, stock accuracy, and return rates
• Use data to tweak and improve over time

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Key Takeaways

Omnichannel inventory management: A unified approach to managing inventory across all sales channels in real time

Inventory visibility: Crucial for preventing stockouts, overstocking, and ensuring customer satisfaction

Flexible fulfillment options: Methods like BOPIS, ship-from-store, and curbside pickup boost convenience and sales

Integrated systems: OMS, WMS, and other tech tools must work together for smooth operations

Customer experience: Improves when inventory is accurate, fulfillment is fast, and returns are easy

Challenges to expect: Data syncing, managing returns, team training, and maintaining security

Setup checklist: Includes auditing current systems, choosing the right software, enabling real-time visibility, and training your team

Long-term success: Requires continuous monitoring, adaptation, and a focus on customer expectations