Understanding and Impact: Leveraging Inventory Intelligence Against Today’s Most Pressing Retail Problems
The retail industry is currently navigating a turbulent period, with more than a few big-name brands in the spotlight for recent struggles and even bankruptcies. The overarching problem is proving to be a lack of adaptability as market dynamics and consumer expectations shift and change. These retailers are struggling to align their strategies with customer needs, economic pressures, and competition. The need, in this current landscape, is for retailers to more clearly differentiate themselves and operate more efficiently — to increase agility, become more customer-focused, and to back this up with a tech stack that supports their goals.
The Retail Challenge: Navigating Complexity in Modern Operations
The industry is continuously evolving. A decade ago, retailers were in a far different situation than they are today with the specific challenges they face. Today, they must strategically navigate the following:
Evolving Consumer Expectations
Consumers often seek convenience and a quality experience to feel their needs are met. Consistently delivering in these ways helps build loyalty and trust. However, the meaning of convenience for shoppers evolves as technology evolves, and what makes up an ideal experience can change according to trends. This makes it critical for retailers to have a finger on the pulse of their customers’ expectations, as they change faster than ever.
One clear example of this is the rise of omnichannel integration. Consumers expect near real-time flexibility and accuracy between digital and physical channels, yet many retailers struggle to align their online platforms with in-store operations. This misalignment affects inventory visibility and creates friction for the customer.
Competitive Pressures and Market Positioning
Dominant players like Amazon and Walmart continue to capture significant market share, often at the expense of middle-market retailers. Then there was the emergence of low-cost platforms such as Temu, Shein, and TikTok Shop that increased competition for those appealing to price-conscious consumers.
Retailers stuck in the “middle ground” are increasingly facing an identity crisis on their offering and how they position themselves. They struggle to compete with discount retailers on price or on experience with upscale brands. To avoid losing relevance, they must carve out clear, consistent messaging that resonates with their target audience and meets consumer expectations.
Supply Chain and Inventory Inefficiencies
The world has seen the benefits of supply chain efficiency through retail giants like Amazon. More retailers are realizing the costs of inefficiencies. Unoptimized, inflexible supply chains cause businesses to lose out on meeting demand fast, accurately, and cost-effectively. Supply chain disruptions cause businesses to scramble to fill in gaps, often at higher costs and risk of delays.
Inventory inefficiencies, such as unoptimized allocation and restocking decisions, can lead to lost sales by way of stockouts, poor inventory turnover leading to markdowns that cut into margins, or both, across different locations or sales channels.
Inventory Intelligence: A Strategic Retail Asset
Faced with these challenges, businesses must continuously assess their strategies and adapt to stay in the game for the long haul. Inventory intelligence is one area that is growing in importance for retailers.
What is inventory intelligence? It is the integration of advanced analytics, machine learning, and live and historical data to optimize inventory decisions. Just as a navigation app like Apple Maps or Google Maps uses real-time traffic and accident data, historical patterns, and predictive algorithms to suggest the fastest routes, often better than simple, fixed directions, or human judgment, inventory intelligence applies advanced capabilities to dynamically improve inventory decisions.
Retailers can become more agile and more efficient, reducing inventory waste, which can also help them improve sustainability and profit margins. At the same time, they’re able to better meet demand and improve customer satisfaction.
The Dropit Approach to Inventory Intelligence
We believe that inventory intelligence is an essential foundation for success in today’s retail industry. Our approach uses advanced machine learning algorithms that receive live and historical data from a retailer’s entire tech stack to transform how retailers make allocation, restocking, and returns decisions.
First: A Unified Data Lake
Dropit begins by connecting to systems such as the OMS, POS, ERP, and more to channel a retailer’s data into a unified data lake. This provides a live view of inventory across all sales channels, ensuring retailers are working with structured and synchronized data without gaps in visibility.
Second: Advanced Machine Learning
Once data is unified, Dropit’s advanced machine learning algorithms get to work to identify trends, predict demand including seasonal demand, and uncover opportunities for efficiency.
Third: Micro-Decisions for a Macro-Impact
Dropit helps retailers make smarter allocation, restocking, and returns decisions on the micro-level that add up over time to macro-improvements. Whether dynamically rerouting inventory to meet online orders from stores with excess stock or adjusting restocking schedules based on the latest sales data, Dropit enables precise, impactful decisions for inventory efficiency.
Inventory Intelligence Driving Results That Matter
This is all done by Dropit sitting atop the tech stack, with no need for costly rip-and-replace implementations.
With Dropit’s inventory intelligence, retailers gain the ability to respond to change faster, the insight to meet consumer expectations, and the efficiency to improve profitability. Dropit helps retailers reduce waste, decrease markdowns, and optimize inventory decisions that put the right products in the right place at the right time.
Contact Dropit today to learn more.
