When chains listen to their customers and create localized store inventory, and then they listen more and accept online returns to any store the shopper chooses, they run into inventory train wrecks.

Those train-crash moments occur when a shopper returns something – say a pair of shoes – to a store that happens to not have that SKU in that store’s localized inventory.

Problem #1: Shoes have an extremely short shelf life, at the end of which, the shoe is typically priced at a steep discount. Problem #2: Stores can’t sell one or two products. The display unit would represent half of all inventory. So, again, that orphaned product goes on steep discount. Problem #3: The store could ship that shoe to a store that does have that SKU in its inventory. But you then have the hard out-of-pocket shipping costs as well as labor to prep the product – and multiple days involved in shipping. And you’re still fighting against that extremely short shelf life.

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Keywords: retail supply chain, inventory control, inventory management, inventory management IT, supply chain management IT, retail inventory initiatives