Why Inventory Management Systems Are So Important to the Future of Digital Marketing

Photo credit: Garry Knight on Flickr.

When consumers shop online, they are often given recommendations based on some criteria (e.g., past purchases, reviews, similar items searched and viewed, etc.)

These recommendations often help consumers find the items that meet their needs and ultimately lead to increased sales.

When a brand or retailer recommends a product to a consumer online, they usually follow it up with a link to a website that allows the consumer to purchase the item. Furthermore, online retailers use remarketing strategies to target advertising to consumers who visit a particular product page on their website, but don’t make a purchase.

By targeting consumers on their mobile devices, brands and brick-and-mortar stores can use similar marketing tactics that will help connect consumers to the products that are sold offline.

However, customers will be frustrated if they are told that an item is available at a specific location offline only to find out that the item is sold out when they arrive at the store.

If this happens enough, customers will lose faith in the reliability of the source that pointed them to the store in the first place. It can also have a negative impact on the reputation of the brand and the retailer.

Therefore, in order for this to process to be most effective, customers need to feel confident that an item will be available for sale when they make the trip to the brick-and-mortar store.

This is why having an accurate inventory management system in place is going to be so important to the marketing efforts of retailers and the brands that they sell.

As I mentioned in an earlier post, retailers can now use RFID technology to help accurately track inventory levels and locate particular items in the brick-and-mortar store. This is true even with difficult-to-track products.

Brands Are Looking to Target Customers Based on Geolocation

As I wrote about in the aforementioned blog post, Steve Madden’s website gives customers the ability to check for items in the brand’s brick-and-mortar retail stores based on geolocation.

However, Steve Madden also partners with other retailers to sell its products. It hopes that, in the future, customers will be able to search for its products in all retail locations—wherever they are sold.

Photo credit: T van Herwaarden on Flickr.“As Steve Madden continues to grow, we are faced with a variety of issues that affect sales, marketing, fulfillment and the delivery of consistent brand messages, product information and exceptional customer experiences,” states Andrew Koven, president of e-commerce and customer experience at Steve Madden, in an article on Forbes.com. “We decided to focus our mobile strategy to help build more sales of Steve Madden products and deliver great service, whether through our own stores or a retail partners such as Macy’s, Nordstrom or Zappos. It would not be uncommon for a customer of a retail partner to view Steve Madden’s mobile site while in their store or to compare prices and we recognize the value add we can provide. Mobile is both financially viable and the optimal way for Steve Madden to offer a brand centric benefit to the entire business. Ideally, we want to ensure that all of our partners do well. Perhaps we could make all retail inventory universally visible to consumers and collaborate with our partners to ensure that consumers can find our products easily while at the same time supporting everyone’s success.”

No doubt, Steven Madden is not alone.

Retailers Don’t Want to Be Left Out When Brands Advertise

There are already companies that are trying to meet the needs of brands that want to drive consumers to nearby stores to purchase their products by reaching these consumers on their mobile devices.

In episode #346 of the Mobile Commerce Minute, Chuck Martin explains that by tracking inventory levels at more than 100,000 brick-and-mortar stores, Retailigence is helping connect the consumer to products at nearby retail locations.

As Chuck Martin explains, Retailigence allows a consumer packaged goods (CPG) company to reach a consumer within a geofence around a store by helping it purchase all the ad inventory from the ad networks that partner with the Retailigence platform, thus driving consumers into only the stores that have the product the customer is looking for. This allows brands to link consumers directly to products.

In the future, many more options are going to be available that will help brands connect consumers directly with their products that are sold in brick-and-mortar stores. This would include, but would not be limited to, adding product availability data to online and mobile search, social media, display, and video advertising to reach customers and prospects on the go.

Adding the product availability information layer to the advertising could make the difference in the conversion process.

However, again, if the a retailer doesn’t have a database with accurate inventory levels, customers could lose faith in the whole process and the reputation of the brand, the retailer, and the source that drove them to the brick-and-mortar store in the first place could all be tarnished.

This could force some brands to not include a retailer in the recommendation process.

And, as Chuck Martin points out, brands are the ones with the advertising budgets.

Therefore, not having an accurate inventory management system could cost a retailer more than it had in the past because a brand’s advertising for a particular product would point customers to other brick-and-mortar retail stores.

Final Thoughts

Technological advancements in retail inventory management systems are going to impact sales in many different ways.

As I pointed out in the last post, the use of RFID technology can help give retailers the confidence to sell items online that it would have had to markdown and sell at a drastically discounted price. It will also save the retailer time and money by making other processes more efficient, including the buy online, pick up in-store option.

Furthermore, as I elaborated on in this post, the increased accuracy that RFID technology brings to a retailer’s inventory management system will be useful in helping brands and retailers connect consumers with the products that best meet their needs by adding product availability information to the brand’s online and mobile marketing campaigns.

If a retailer can’t provide accurate inventory data that can be used in a brand’s digital marketing efforts, there is a good chance that the retail store would not be listed as a possible location to buy a particular product. This will hurt the retailer’s bottom line.

However, when a retailer can provide accurate inventory data that brands can use in their marketing efforts, it will help the brand link the customer to the product.

And, as Chuck Martin points out, “…that’s sort of the holy grail of this whole thing.”

Note: The Mobile Commerce Minute Episode #346 with Rob Woodbridge and Chuck Martin is embedded in this post. For additional information, visit the UNTETHER.tv website. 

 

Photo credits: Garry Knight and T van Herwaarden on Flickr.

Video credit: MCM #346: Is inventory the new location for retailers? on UNTETHER.tv

Chad Thiele

Marketing analyst and strategist, content curator, applied sociologist, proud UW-Madison alumnus, and an Auburn-trained mobile marketer. My goal is to help businesses identify trends that will help them achieve their marketing objectives and business goals. I'm currently looking for my next career challenge. Please feel free to contact me anytime at: chadjthiele@gmail.com.

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