Despite the lessening impact of the COVID-19 Pandemic, shelves continue to be empty. Three years later, consumers cannot always count on stores to have the goods they’re looking for when they need them. However, suppliers have plenty of inventory across distribution centers — so where is the disconnect? Why aren’t products making it from the warehouse to store shelves, and ultimately, to consumers? 

The answer lies within a business model that has not yet been fully adapted to the needs of modern shoppers. 

Just a decade ago, retailers really only had to focus on customers who physically came into their stores. Now though, channels of distribution have opened up massively. People now shop in a variety of ways including in-store, online, ship-to-store and curbside pickup, which became extremely popular during the Pandemic.  

Omnichannel retail has a lot of advantages for stores, like increased sales and improved customer satisfaction. Simultaneously, it has changed the way that inventory works, and made it more difficult to manage supply chain flows from vendors. Businesses that don’t adjust will find increased issues with inventory, frustrated customers and eventually, declining profits.  

The solution is to modernize the supply chain with precision data, updated shipping methods and improved vendor-retailer relationships.  

Using Data to Identify Friction Points

In today’s marketplace, data is easier to track and more readily available than ever. Supply chain management partners can help retailers and suppliers exchange data enabling better logistics choices.  

There are many ways to maximize the value that inventory data provides, like: 

Identifying where out-of-stock issues are happening right now. Are out-of-stock events happening when online orders are up? Is there a specific store that seems to run out of items most often? Is there one supplier that consistently comes up short?  

Trace problems back to their source. Why is the issue occurring? Historically, retailers have tried to mask or solve the problems — e.g., buying more, buying earlier — rather than fixing the root of the problem.  

Rebuild trust with vendors. Ensure suppliers know about your goals and challenges. Keep vendors updated on sales, inventory levels and future plans. This will help them with their own production plans. 

More Precision, Not More Inventory

Like any other business, the retail space must stay within the limits of its physical and financial resources.  

That is why the answer to empty shelves is not to just buy more. Retailers know they are out of stock, but they don’t have the space or money to keep excess inventory. Instead, they need to home in on specific data and attempt to predict consumer behaviors. While omnichannel retail has made it more difficult to determine what day-to-day demands will look like, precision data can identify trends, react to evolving consumer behaviors and fine-tune the forecast. 

By using data insights, retailers can then allocate inventory as close to the needed demand period as possible. If you can narrow down the time between ordering a product and moving it out, you improve your ability to keep things in stock without needing to carry more inventory.  

Supplier Support

The onus for improving just-in-time inventory models to fit multiple channels and consumers’ expectations do not rest on retailers alone. Suppliers have a responsibility, too. 

Retailers do not always have the bandwidth to analyze and optimize their data. If they’re sharing point-of-sale data, for example, suppliers should be using that information to make recommendations about restocking, changing and/or adjusting assortment or other suggestions to increase sales.  

As technology improves, vendors can be more flexible with packaging options, variety and regional shipping. For instance, by using data, vendors can reconfigure case sizing to give specific retailers the option to buy four sets of six, rather than one pack of 24 units. Or the supplier could put together an assorted case with multiple flavors, colors or sizes to help move more products. By turning the right data into smart guidance, suppliers can set themselves apart as a high-value collaborator and the go-to solution when new opportunities arise.  

Nicholas Schwalbach is director of product management, and Brandon Pierre is vice president for customer success at SPS Commerce.