Imagine walking into your favorite clothing store in search of a pair of pants that you saw online. You made the three-mile drive to the shopping center and braved the crowds only for the pants to be out of stock. There is nothing more frustrating for a customer than going into a store and not finding the one item they went in to buy.  

Not only does that disappointment pose an issue for the customer, but the retailer also feels the heavy impact of inventory distortion, with both out-of-stocks and overstocks. Operationally, stores may find they need to pay rush fees for a quick delivery on last-minute stock replacements. Employees may also have to spend more time dealing with back-orders and checking stockrooms, creating a poor in-store environment and making inefficient use of their schedules.  

Most tangible, however, is the financial effect that inventory distortion has on retailers. When a customer cannot find their desired item, they may go for a cheaper option or visit a completely different store altogether. Overstocks also play a significant role in the financial impact of inventory distortion, as they are a physical representation of wasted funds. In fact, U.S. retailers are sitting on a whopping $740 billion in unsold goods.  

Unpredictable events like severe weather and economic recessions can happen at the drop of a hat, affecting deliveries and ultimately losing retailers customers and subsequent revenue. With a number of factors and parties involved, sometimes retailers feel they have little to no control over inventory issues. 

However, there is one area in which retailers can have control, and that is their store communications and task management. By improving those processes, such as employee training, communication among employees, and also between management and floor staff, retailers can take strides to resolve inventory distortion at the store level.  

Proper Employee Training 

Before effective inventory management comes proper employee training, which involves ensuring that employees are prepared for the future, and equipped for any present-day hiccups, such as sudden demand increases and empty shelves. By properly training employees from day one, retailers can mitigate future mistakes, especially when it comes to restocking practices and inventory management.  

With a central place to turn in the face of uncertainty, employees have a simple and quick reference for ascertaining the store’s operating procedures. For example, back to the clothing store, if an employee cannot remember the quantities of each product that should be on racks, they now know where to check. This helps them make quick decisions regarding how many more of the product they should grab from the back room. A bonus: they no longer need to turn to a busy floor manager to ask.  

All employees are better prepared to handle out-of-stocks and replace shelf inventory in a timely fashion when they are trained properly. 

Improved Communication Among Employees

A centralized portal allows employees to communicate with each other about items that need to be restocked or ordered. This effective communication increases visibility within the store and between employees, ensuring everyone is in the know on current statuses. For example, if an employee notices the previously mentioned popular pair of pants is running low on size 32, but they are backlogged with other store tasks, streamlined communication will allow them to notify the team. Then, a new team member can step in and check the back room or place a new order for the pants. 

This also allows staff to predict future inventory problems. As employees are communicating with one another, they can begin to pick out patterns regarding how quickly an item has been selling. Therefore, they are ready to restock at a faster rate. 

Streamlined Communication Between Management and Floor Staff

Given the fast-moving sales cycle of seasonal items and the resulting shifting demand, it is crucial that managers can efficiently and quickly relay messages to their store teams. For example, corporate and management teams can send information on items that are on discount or promotion, so in-store staff can quickly change prices and ensure they are communicating sales to shoppers.  

Visual merchandise reviews also provide a clear and quick way for employees to submit pictures of displays to management, allowing them to confirm or deny accuracy. With that quick review, sales are relayed to customers in real time, and the store increases its chances of emptying their shelves and eliminating the risk of overstock. This ultimately saves the retailer resources and money. 

Store Inventory Can Inspire Brand Loyalty

For a retailer, brand reputation is everything. Taking advantage of the areas it can control, like communication and task management, indicates the retailer’s commitment to its customer base. Ninety-two percent of customers will abandon a company after two or three bad experiences, so nailing inventory processes every time is crucial when a retailer wants to inspire brand loyalty. In-store employees are key to harnessing that ability.    

Gary Stonell is SVP of Sales and Operations at Opterus.