In this digital environment, merchandising needs can change moment to moment. Insights and actions must be directed on what is likely to happen vs. what has already happened. Continuous signals that occur on the digital shelf provide real-time inputs to forecasting. These signals include a viral post that drives a sudden increase in sales, or enhanced content that increases conversions, or a competitor’s product launch that lowers sell-through rates. Even knowing that a blizzard is expected next week on the US East Coast would help a brand to proactively move inventory closer or adjust shipping service level agreements (SLAs) to serve shoppers.
Consumer buying inspiration and purchase can happen anywhere on the digital shelf. This requires tight integration between back-office and front-office systems.
The key to growth is establishing the whole product truth closer to the consumer: on the shelf itself. The following are key principles to keep in mind when creating inventory systems for the new digital shelf:
- Link experience and inventory. Inventory tracking and demand planning must take place as close to the end consumer point-of-sale as possible. Think of inventory as a component of the consumer experience.
- Provide a single view and mode of management across channels. Inventory systems need to support a variety of routes to market and accommodate all of the changes and actions required to allocate products across different channels.
- Drive predictive actions. Make use of continuous signals from the digital shelf that may drive an increase or decrease in velocity or changes to merchandising strategy.