Given labor shortages, supply chain issues, and expectations of same-day...
With technological advancements come increased application and implementation throughout industries, especially in the shipping and warehousing industry. One recent innovation is virtual inventory—which has puzzled many industry professionals. How can a virtual product benefit our logistics operations? It sounds counter-intuitive.
However, incorporating virtual inventory into your logistics strategy can put you one step ahead of your competitors by allowing you to save on retail space while ensuring that the product shoppers want is available quickly.
We must first define virtual inventory to understand how virtual inventory can benefit your operations management. Virtual inventory is a digital collection of a retailer’s available product inventory. This digital catalog shows SKUs of products held in brick-and-mortar stores, warehouses, distribution centers, and brands that the retailer partners with but does not physically inventory their product.
Virtual inventory functions much like the print catalogs popular with brands like Sears in the late 19th century. While you may not have every item in your warehouse, you list every item you could sell, allowing consumers to purchase regardless of location. Incorporating this strategy helps retailers of all sizes remain competitive by offering buy online, pick up in-store (BOPIS) and reserve online, pick up in-store (ROPIS) options.
Virtual inventory can benefit your warehouse in four key ways. Firstly, it allows you to carry many options without additional storage or retail space. You aren’t limited to what can be sold at a given time or season, which allows you to add more to your product selection, including high-margin goods, popular or trending products, and new or emerging brands.
Secondly, virtual inventory lets you ensure customers that the desired product will be available. Global supply chain issues, unpredictable fluctuations in demand for items, and poor inventory forecasting are reasons a retailer cannot stock a specific product at a given time. Virtual inventory allows you to take a more on-demand approach and bypass these common logistics hurdles.
Virtual inventory also prevents retailers from over- or under-ordering. You need to be just as flexible as your customers’ desires, and virtual inventory allows you to be more flexible regarding the brands and products you choose to sell because you don’t have to struggle to find space in your warehouse or stock room.
Lastly, incorporating virtual inventory into your logistics strategy can empower store associates. Instead of dealing with upset customers regarding out-of-stock items, employees can offer customers the ability to order that product online. This omnichannel shopping works through many mediums, including in-store, mobile, or the internet. By keeping your customers happy, you build brand loyalty and increase the number of repeat customers.
To see how virtual inventory and other supply chain logistics strategies could help your business, consult our team at Brown West Logistics. Not only do we provide trucking and brokerage through our sister companies, but our team of experts is here to provide creative solutions to all your warehousing needs. Call today.
