Increase Stickiness Through eCommerce Out-of-Stock Reminders

Companies in both the retail and B2B sectors lose money when requested products are out of stock. The problem is common, and it costs retailers about $1.75 trillion dollars every year for overstocks, returns and out-of-stock items. [1] Operations become increasingly complex for B2B companies that can lose huge orders or customers due to inventory shortages. An integrated sales platform makes it easier to manage returns, push overstocked items off warehouse shelves and provide accurate estimates of when the products will be restocked for shipping. It’s easier to increase customer stickiness with out-of-stock reminders.

Special Modules Automate Restocking Alerts

Losing money because products are out of stock doesn't have to happen in every case. A fully integrated website can make precise estimates of when key products will be restocked or available for re-order. Some developers can integrate custom modules that alert companies when products are available for immediate shipping. Keeping the lines of communication open with real-time information enables customers to request an email reminder when the requested products are again in stock, which is what Clarity eCommerce provides out of the box.

Knowledge enables customers to adjust their schedules and work around a temporary delay in shipping products. A fully integrated platform helps companies keep tabs on inventories that might be housed in multiple warehouses and brick-and-mortar locations. Inventory management often consists of products allocated to multiple warehouses, sales platforms, branch operations and physical stores. Integrating your entire inventory, allow you to manage your stock more accurately and predict and produce purchase orders when low stock levels are reached. Clarity provides automated low-stock alerts for any products of any quantity.

The Hidden Costs of Inventory Shortages

According to one study, about 72 percent of insufficient inventories are caused by faulty ordering habits. [2] This failure of inventory management is common in both retail and B2B operations. Ordering or manufacturing products is a balancing act. Ideally, decision-makers place orders for enough products to cover demand with enough leeway to cover business until out-of-stock products are reordered.

The loss of a one-time order might not be a big deal for low-end retail products, but 66 percent of customers will abandon a company after trying to order out-of-stock products three times. Losing a customer is more serious than losing an order, and the problem is magnified when the customers order thousands of dollars in B2B products or supplies. Eliminating out-of-stock items increases annual sales by a 2.7 percent average. [2] Providing out-of-stock reminders will provide your customers with the confidence that you’re taking care of them and will let them know just as soon as it becomes available.

A fully Automated System for Inventory Management

Automating inventory management delivers big benefits for retail and wholesale operations. It's difficult to correlate all the factors that might affect inventory without automation. Some of the typical problems with inventory management that result in loss of revenue include: [3]

Disconnected Data Systems

  • In 2015, one study found that disconnected systems resulted in a $222.7 billion loss in annual revenue. The loss was attributed to overstocked and out-of-stock products caused by siloed systems that couldn't communicate with each other.

People Problems

  • Human error and communication delays caused merchants to lose $259.1 billion last year. These issues include insufficient training, transcription errors, discounts unsupported by inventory levels, insufficient labor scheduling and other people-management issues.

Supply Chain Problems

  • Integrated platforms can connect easily with suppliers and recommend alternate suppliers when needed. Companies lost $158.3 billion in revenue last year because of not being able to fill orders due to supplier delays.

Bad Internal Processes

  • An independent study showed that in 2017, companies lost $284.9 billion because of inefficient internal processes. These included disconnects between sales and marketing departments, poor maintenance of manufacturing equipment, inadequate refrigeration of perishables and other errors. Integrating systems delivers efficiencies of scale that improve conversions and streamline management.

The impact of overstocks, returns and out-of-stock items runs an average of 11.7 percent of potential revenue. Even a few percentage points can make the difference between profitability and failure in B2B sales. Think that can’t happen to your company?  In the last 15 years, 52% of Fortune500 companies failed.

Losing revenue from buyers ready to make a purchase is one of the biggest errors that companies can make. Organizations spend thousands or millions of dollars setting up their sales platforms, marketing products, nurturing leads, building long-term relationships just to bring people to your site to buy. It's distressing to then lose that business because inventory was insufficient or too much money was spent on slow-moving merchandise.

Using Stock Levels to Close Sales

One of the big benefits of integration is that it enables real-time inventory figures that can spark sales. According to one eCommerce statistical firm, many eCommerce sites use dwindling inventory figures to create a sense of urgency in customers. Real-time inventory counts can be used to spur sales. Integration can track sales immediately and update a running tally that helps to close out overstocked merchandise and slow-moving products. While these sales are being pushed, new stock can be on the way so that there's little or no delay in restocking popular products.

Choosing the Best Development Options for eCommerce

High performance and great UX (user experience) rank as some of the strongest benefits that you can offer your customers. Full integration and customized processes provide the kind of customer experiences that generate repeat business and improve conversions. You can increase customer stickiness with automated reminders and more precise restocking dates. There are dozens of options for allocating resources, triggering orders to restock products and supplies and keeping customers informed at every step of the sales process. Full integration of your business applications automates processes, reduces human error, streamlines administrative work and makes it possible to project a more accurate and balanced inventory strategy. Give Clarity a call today to discuss your integration project.

References:

[1] Cnbc.com: Retailers are losing nearly $1.75 trillion over this

https://www.cnbc.com/2015/11/30/retailers-are-losing-nearly-2-trillion-over-this.html

[2] Hbr.org: Stock-Outs Cause Walkouts

https://hbr.org/2004/05/stock-outs-cause-walkouts

[3] Retailwire.com: Retailers suffer the high cost of overstocks and out-of-stocks

 https://www.retailwire.com/discussion/retailers-suffer-the-high-cost-of-overstocks-and-out-of-stocks/

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