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Inventory visibility: What it is and why it matters

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Imagine you’re browsing an ecommerce store and find a product that you’re interested in buying. You decide to visit the brand’s nearest physical location so you can view it in person and ask a store associate some questions. 

But here’s the catch: The product page doesn’t provide you with any real-time inventory counts. 

If a customer has reached the point of checking inventory levels, this indicates a high intent to purchase. By not supplying this information, you’re losing out on some easy sales.

Despite this, just 38% of retailers show basic inventory availability on product pages. That’s a lot of unnecessary friction in the customer experience!

This is just one example of how inventory visibility is essential to offering a convenient, hassle-free shopping journey that boosts customer satisfaction – and this post contains many more.

We’re going to cover why inventory visibility is the key to being a successful ecommerce retailer, and how partnering with Whiplash can help you achieve real-time inventory insights that improve your fulfillment operation.

What is inventory visibility?

Inventory visibility refers to a business’s ability to know how much inventory they have on hand and where different SKUs are being stored at any given time. This includes SKUs that are in storage at your warehouse, on the shelf at a storefront, or in the process of being fulfilled for customer orders. 

Being able to track the movement of inventory across different locations and stages of fulfillment enables merchants to make smarter decisions about inventory management. This includes:

  • When to acquire inventory and how much
  • Where to store inventory
  • Where to allocate orders for order fulfillment 
  • How to reduce shipping and fulfillment costs

Why does inventory visibility matter in ecommerce?

If your business cannot answer basic questions on where your inventory is, how much you have, or what inventory is being used to fulfill what orders, there are countless sales opportunities you could be missing – not to mention significantly eroded profits due to higher storage and shipping costs.

Moreover, inventory visibility is essential for achieving the omnichannel approach to retail and fulfillment that today’s shoppers expect:

Without inventory visibility, it’s impossible for any of the above strategies to be executed seamlessly. And that doesn’t spell good news for your CX management.

Let’s look at some other ways that inventory visibility can assist your ecommerce business:

The benefits of good inventory visibility

1. Avoid stockouts and split shipments

There’s nothing worse than a customer placing an order – only to have to tell them that an item is no longer available for purchase. This often happens when an online store isn’t synced properly with a Warehouse Management System (WMS) or no WMS is being used, resulting in inaccurate inventory counts. 

While it might be possible to save a sale by offering an alternative product, a merchant may have no choice but to refund part or all of the order. In addition to lost revenue, wasted shopping journeys like this result in poor customer experiences that impact a brand’s reputation. Despite this, Shopify data reports that shoppers will experience stockouts as frequently as every third shopping trip. 

If a product has sold out in one warehouse location but is available at another, merchants have the option to use split shipments, where products from the same order will arrive in separate packages from different facilities. 

While they allow a full order to be fulfilled, split shipments involve much higher fulfillment and shipping costs, resulting in lower profit margins – or even losses – on a sale. 

By committing to improving inventory visibility, your business can avoid stockouts and split shipments that seriously affect your ecommerce business’s profitability. 

2. Prevent excess inventory and dead stock

It’s not always possible to predict when excess inventory is going to become a problem at your business. But a lack of visibility over your stock is one of the biggest precursors to stock piling up in your warehouses or storefronts.

Why? Because if you don’t have access to real-time numbers on how many units you’re carrying of a particular SKU, it’s easy to end up ordering more than you need to provide a buffer against stockouts. 

But if this extra inventory outstrips customer demand, you’re going to find yourself with more stock than you can sell. When a product’s lifecycle is over, excess inventory turns into dead stock that costs you more money in storage fees than it will make in sales.

By investing in inventory visibility, you can accumulate the data you need to make more accurate demand forecasts. Having greater certainty over your current levels also avoids the need for a ‘just in case’ approach to inventory management that makes excess stock more likely to occur.

3. Enhance the customer experience with O2O retail

Blending online and offline shopping capabilities, O2O (Online-to-Offline) retail maximizes convenience and flexibility by giving consumers the best of both worlds. 

For example, it’s far quicker and easier to browse a merchant’s product catalog online than it is to visit a store and comb through every single aisle. Despite this, many consumers still prefer to make purchases in-store. According to Chain Store Age, almost half of consumers prefer to shop in person, while Forbes found that consumers spend more on average during in-store visits than they do when shopping online.

As a result, hybrid services such as BOPIS (Buy Online, Pick-Up In-Store) and curbside pick-up have gained immense popularity as consumers embrace using multiple channels to shop. The same goes for the post-purchase experience, with in-store returns booming as consumers aim to avoid return shipping costs and lengthy waits for refunds.

If a customer wants to do a curbside pickup of their order you need to know whether that store has the necessary stock – and if not, whether it can be sent from another store within the timeframe required. But without real-time inventory visibility, it’s impossible to coordinate O2O retail services effectively. 

4. Lower shipping costs

Shipping is one of the biggest costs that ecommerce merchants have to shoulder due to customer expectations for fast and free shipping. Although it might seem unrelated, inventory visibility plays a huge role in reducing your shipping costs.

If all online orders are dispatched from one centralized warehouse, your shipping costs are going to vary significantly between orders. This is because while some customers will be located close to your facility, other orders will have to cross multiple shipping zones, resulting in shipping rates that are difficult to predict.

While ecommerce brands can control for these shifts using flat-rate shipping, standardized rates will cause you to pay over the odds for short-haul deliveries. 

By focusing on improving inventory visibility, you have the option of bringing storefronts into play as micro-fulfillment centers that can fulfill local orders within a certain radius. Multi-node fulfillment strategies of this nature don’t just mean cheaper shipping rates, but getting orders to your customers much faster for increased satisfaction and loyalty.

How to improve inventory visibility with Whiplash

When you’re a fledgling business, inventory management doesn’t present too much difficulty. 

But when you start adding more warehouses or store locations into the mix, inventory visibility is one of the first things to be sacrificed. 

Without proper inventory management software, it’s almost impossible to keep track of what you have and what you don’t – and stockouts and order errors will quickly mount up.

This is where partnering with a 3PL like Whiplash that embraces advanced automation will make all the difference to your ability to keep track of your inventory levels. 

Our advanced proprietary technology platform makes it a breeze to keep track of your inventory – all from one simple, intuitive dashboard.

a laptop showing the whiplash app inventory: hot products screen for a business

Search your inventory with multiple filters. Select from a wide variety of search filters to search through your orders, shipments, and outstanding inventory with ease. Save your favorite searches to your dashboard, where they will be updated in real-time for up-to-the-minute insights.

Seamless integrations with your ecommerce platform. The Whiplash platform provides advanced two-way integrations with all major ecommerce platforms including Shopify, ensuring that your inventory levels are updated every time a sale or a return is made through your store.

Set up multiple warehouse locations and Routing Rules. Set up multiple fulfillment sites through your account to pioneer a multi-node fulfillment strategy. Our Geolocation tool will automatically allocate new orders to the facility closest to your new customer. Set up custom Routing Rules to route orders involving certain SKUs to specific warehouses for the ultimate control over fulfillment.

Set notifications for low inventory levels. Configure custom thresholds for each of your SKUs for when inventory levels hit or are close to your reorder point, ensuring you never find yourself without enough units to fulfill outstanding orders.

And don’t just take our word for it; let’s hear it straight from one of our customers: 

Before partnering with Whiplash there were some services we weren’t able to offer, such as in-store returns. This added a lot of friction to the customer experience. Integrated inventory management has been a real game-changer for the Calzedonia brand – and our ability to meet consumer expectations.”

Marcello Veronesi, CEO of Calzedonia USA.

Want to find out more? Check out ecommerce technology page to learn how we turn inventory into packages bound for your customers.

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