Large legacy retailers have been challenged with multi echelon inventory requirements with the growth of the consumer omni channel shopping and purchasing that has left them hampered due to these significant inventory management challenges.  These omni channel inventory challenges are causing lost sales and increased costs for these retailers as a result of the consumer increased purchasing from Internet sources and the decreased spending in stores. These challenges can really only be addressed through changes in retailer inventory management practices to support the multi echelon inventory requirements.  These challenges require that retailers remake their use of the retail stores, warehouses and supplier network to meet the challenges and the demands of the consumer omni channel market.


Retailers are challenged to move from a multi channel environment to an omni channel environment in order to meet the consumer demands.  These challenges crossover channels, locations and partners to meet the consumer demands and this is where the inventory challenges come into play.  Retailers must realize they cannot overcome the omni channel inventory challenges with a mult channel strategy; consumers want to shop in a store and have their purchases delivered to their home or office as much as if not more than shopping online and picking up the purchase in the store. 


Retailers are currently viewing their store real estate as a challenge to overcome rather than a strategic advantage in the omni channel struggle.  Retailers are challenged to view their inventory from a holistic point where inventory can fill demands across delivery methods instead of viewing inventory from a channel perspective.  Home Depot refers to each of their stores as a warehouse mainly because of the size and the amount of inventory located in each of the stores and the large national and regional retailers must begin to view their retail stores as fulfillment centers as well.  This change in strategy would provide a great strategic inventory advantage to meeting consumer omni channel shopping and purchasing demands. 


The great omni channel inventory challenge for retailers is efficient inventory placement to support the purchasing demands across all channels.  This can be achieved through changing the retail store from a retail channel outlet focus to an omni channel fulfillment center.  This strategy can be achieved through a refocus on meeting the consumer demands and not a focus on the store, warehouse, online channel.  This strategy can provide advantages in consumer delivery times and inventory utilization while at the same time overcoming an initial obstacle with under utilized real estate stores due to shifts in purchasing channels.


And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements.