Customers worldwide have changed the way they shop for groceries. Millions have now chosen online shopping for ease, convenience and safety. Take Jeannette, for example. In addition to having a demanding work schedule, she’s also a full-time mother who prefers to do her grocery shopping online. She intends to purchase 10 items using her favorite grocery store’s mobile app, often opting for a superior degree of customer satisfaction due to various rewards programs, such as Walmart+ or the MyHEB app. She chooses the same-day-delivery option so her dinner ingredients will be at her doorstep once she arrives home.Shortly after she placed her order, the store called to say that three of the ten items she wanted were unavailable. The store manager offered to substitute similar items. However, Jeannette has a hectic schedule and doesn’t want to deal with this on the phone while she is having a business meeting on Zoom.
Let’s take a closer look at Jeannette's options. She can:
- Substitute with similar items
- Buy the rest of the basket and use another grocery store app for the missing three items.
- Cancel the order this time
- Switch to an alternative retailer
Why? The answer rests in how well the app is using her data to reduce her stress and needs. Think about it. When was the last time you placed an order without seeing the “frequently ordered items” confirmation page at the end?
This information not only helps to reduce the effects of poor inventory management but also increases customer engagement. Retailers can finally recover lost sales opportunities by effectively turning these in-app purchases into impulse sales by simply reminding the shopper. In addition, it all creates a higher tier of customer service, so Jeanette is even more likely to return to the app in the future.
The importance of getting an online inventory correct
What does a grocery retailer lose when an item is not available online?
Grocery retailers risk losing sales by not having the correct item online when a customer wants it. In today’s grocery world, customers quickly find an alternative product or a new grocer if their initial choice is unavailable. Unavailable items mean not just lost sales but frustrated customers and, perhaps worst of all, a tarnished brand image.
According to a Harvard Business Review study, retailers can lose nearly half their intended purchases when customers encounter stock-outs. Those abandoned purchases translate into sales losses of about 4% for a typical retailer, which can amount to $40 million a year in lost sales for a billion-dollar retailer.
How can grocery retailers avoid losing their omnichannel customers?
Today, many retailers recognize the challenge of getting online inventory right and keeping their omnichannel customers happy. Forward-thinking grocery retailers are now focusing on their omnichannel customers and radically accelerating their omnichannel inventory planning capabilities to serve them better.
Here are three strategies that grocers can use to enhance online availability and avoid losing their omnichannel customers when a product is not available:
1. Measure the true impact of product unavailability
Poor availability means dissatisfied or lost customers and poor financial performance in the long run. Correcting availability problems begins by better understanding their root causes and measuring the impact of product unavailability—including the possibility of losing the full customer basket and reduced future visits by those customers.
Using AI solutions built for the omni-world, retailers can characterize the effects of stockouts and slow delivery as omni-lost sales. This is the first step in measuring the current state and impact of changes in a retailer's supply chain management.
2. Enhance omnichannel demand forecasting capabilities
It has never been more critical to predict how, when and where your omnichannel customers want their orders fulfilled.
As more customers migrate to online channels, they yield increasingly rich data about their preferences and purchasing behavior. Effectively analyzing these new data streams can help grocers respond quickly to changing patterns of omnichannel customer demands.
This requires forecasting demand at a location-product-day-fulfillment preference level. In some cases, hours are more relevant than days. Fulfillment preference can usually be classified into two levels: online and offline delivery.
Grocery retailers that use sophisticated forecasting solutions can determine the inventory required in stores, dark stores and distribution centers. By maximizing availability, they can reduce lost sales, increase their order fulfillment performance and keep their customers happy.
3. Take advantage of dark stores
Rising omnichannel customer expectations for faster grocery delivery have triggered the development of more innovative fulfillment options. Today, dark stores stand out as the next big thing in grocery retail. They offer a highly effective way of picking stock for online orders and supporting last-mile delivery.
Dark stores enable retailers to provide more convenient shopping experiences for omnichannel customers. They also help grocers cope with the sharply increasing online orders and short delivery times.
As grocers look to optimize and expand their fulfillment capabilities, they can take advantage of dark stores, which offer greater availability, a clearer view of stock levels and improved fulfillment efficiency.
Looking ahead for omnichannel customers
The omnichannel grocery world has placed the supply chain firmly on the front line. Today, serving the omnichannel customer in the best way possible requires grocers to look at everything through an omnichannel lens.
With invent.ai’s retail planning solutions, grocery retailers can embed omnichannel retail into their strategy, predict omni-demand at all levels, profit-optimize their inventory and re-engineer their supply chain to fulfill their omnichannel promise.
Get in touch with our team of retail experts to learn about how we can help you serve your omnichannel customers better and win in the new omni-grocery world.