A 3D planning solution will help home retailers put the strategies in place that both prevent and prepare for instances of out-of-stock.
Out of stock. Three small words with big implications for home retailers, causing cart abandonment, customer complaints and, ultimately, eroding margins. Worldwide, it has been estimated that the cost of stockouts is almost $1 trillion in sales, which are either lost to the competition or missed out on altogether – many shoppers will simply give up on a purchase, at a cost to retailers of $26 billion.
Clearly, stockouts present a big challenge, and for retailers who can reduce their frequency, a big opportunity too. To better manage their inventories and more accurately forecast demand, brands are already adopting solutions to provide greater supply chain visibility and customer insight. But if there is one thing that can always be forecast in retail, it is to expect the unexpected.
Alongside steps to avoid stockouts, processes are needed that help retain customers and improve their experience when an inevitable outage does occur. A 3D planning solution will help home retailers put the strategies in place that both prevent and prepare for instances of out-of-stock.
Tapping into omnichannel insight
For the consumer, availability of stock is just as crucial to their online experience as it is when visiting in-store. In both cases, an outage can represent a waste of time and money – the two things that customers value most. In fact, stockouts are the most important issue for 30% of shoppers, while 30% of those confronted with an out-of-stock situation will go on to make their purchase elsewhere or not at all. This is a big problem for retailers, and one that is shared across the board; according to studies, the average out-of-stock level worldwide sits at about 7-8%, which has remained largely unchanged despite more than forty years of research.
To buck this trend, a holistic approach to data capture and analysis is key. The online experience is now part and parcel of a successful home retail strategy, whereby multichannel insight and value-added services are a vital enabler to growth and customer retention. By integrating an omnichannel 3D planning solution into their offering, retailers can provide customers with a home remodeling experience that they can explore via the website and with a sales professional in-store. Consumers can try different ways to remodel their homes, apply new styles and experiment with different products, adding to the customer offering, while steering them in-store for professional expertise and validation at the point of purchase.
As well as an accelerated sales cycle, the result is a complete picture of customers’ purchase journeys, which can be used to provide a better understanding of buying behaviors and preferences. What’s more, the platform provides a rich source of data from users’ online planning habits, which can be analyzed to better predict future trends, forecast demand and merchandise accordingly. Historical sales data is great, but paying attention to upcoming trends will ensure retailers are not falling behind when it comes to planning ahead.
Preparing for every eventuality
Prevention is, of course, better than cure. But sometimes even the most prepared retailers sell out of popular product lines. While, on the one hand, retailers are more equipped than ever, they are also more likely to be caught unawares when it comes to spikes in demand – some eventualities, such as freak weather patterns or a social media storm, simply cannot be predicted, regardless of the technology in place.
So, when a product does become unavailable to customers, home retailers need solutions that can feed a reactive strategy, taking the opportunity to cross-sell, upsell and salvage the sale. Using the HomeByMe for Home Retailers 3D planning solution, home retailers can help improve the customer experience in the event of a stockout in these five ways:
- Immediately notify customers that the product is out-of-stock
One of the best ways to avoid a negative customer experience in the event of stockout is to alert the customer to it as early as possible. This goes for in-store and online – set their expectations early with a notification via the HomeByMe platform and then set about finding the right solution.
- Integrate with CRM systems to trigger back in stock alerts
According to a report by The Luxury Institute, 71% of consumers appreciate being notified when the item they are looking for comes back in stock. By integrating the HomeByMe platform with existing CRM systems, automatic alerts can be built into the solution that request customer information, and trigger the notification once an item is available online. In doing so, retailers can help maintain customer loyalty and reduce the number of lost sales.
- Flag items that are similar
According to McKinsey, 35% of consumer purchases on Amazon are a result of personalized product recommendations. With the HomeByMe for Home Retailers 3D planning solution, retailers can see exactly what their customers have been searching for in order to inform recommendations of items that are similar and personalized. This information can influence alerts on the website, as well as highly targeted marketing campaigns to re-engage customers at a later date.
- Offer discounts and incentives
When referring customers to an alternative item or one that is more expensive, retailers can offer targeted promotions for an additional incentive, as well as a goodwill gesture for any inconvenience. This will help to turn around the customer experience and maintain a positive relationship.
- Provide details of online/ in-store options
Shoppers encounter out-of-stocks in as often as one in three shopping trips, whether that is online or in the store. Using an omnichannel 3D planning solution, a complete overview of the retailer’s catalog is available, which can be integrated with inventory management systems to alert customers of other stores nearby that have their product in-stock, or, alternatively, if the order can be placed online and delivered directly to their home.
In today’s hyper competitive retail landscape, sales are hard fought and retailers simply cannot afford to lose them due to a lack of stock. Using the HomeByMe for Home Retailers 3D planning solution, retailers can implement a strategy that both prepares for and prevents instances of stockout, capitalizing on the joined-up processes and end-to-end visibility that come from an enhanced omnichannel planning experience and optimized sales cycle.