Multichannel Inventory Management: What It Is and How to Do It
Multichannel inventory management is an invaluable tool for today’s retailer. Here's what to know and how to get started.
by Stephanie Vozza Jan 26, 2024 — 5 min read
What is multichannel inventory management?
Multichannel inventory management is the process of tracking inventory that is sold and stored across multiple sources. Using cloud-based software, the system syncs all stock levels for an accurate and single source of truth.
Multichannel inventory management is an invaluable tool for today’s retailer, who likely sells across many channels, such as in-store, online, and on social media. Cloud-based systems also manage inventory across locations, which is important if you have multiple stores, hold pop-up or mobile sales, or sell wholesale to other retailers.
What are the benefits of multichannel inventory management?
Since manually managing inventory across platforms and channels can be challenging and time-consuming for retailers, multichannel inventory systems offer a variety of benefits.
Real-time visibility
Multichannel inventory management helps you avoid the situation where a product is sold out after a customer has made a purchase by automatically syncing levels across all platforms, hiding out-of-stock items on your site. Having real-time visibility across your business is also key for maximizing profits during peak seasons.
Improved customer service
By maintaining accurate inventory levels, you reduce the risk that your customer will shop somewhere else. Multichannel inventory management enhances customer satisfaction by improving delivery options, such as buy online, pick up in-store (BOPIS) or shipping items to customers.
Valuable insights
Multichannel inventory management also provides key insights that can help with business decisions. You can analyze past sales data to get a clear understanding of products that are in high demand and forecast the optimization of inventory levels based on this data.
Cost savings
Keeping inventory at optimized levels helps you save money that might otherwise be tied up in deadstock. Multichannel inventory management can also help you save money by allowing you to ship an item from a location closest to the customer, reducing transportation costs.
Business growth
Retailers are looking to expand the number of digital channels where they sell, with multichannel inventory systems facilitating this growth by enabling easier sales across more channels.
How to manage inventory across multiple channels
Multichannel inventory management starts with a cloud-based inventory system that integrates with your retail point of sale. The system should offer real-time analytics to ensure your stock levels are automatically tracked and adjusted every time you make a sale, receive a return, or get a new shipment.
Choosing the best multichannel inventory management software
When choosing multichannel inventory management software, consider the following:
- Automation capabilities: The system should automatically adjust inventory levels whenever stock count changes.
- Ease of use: Look for a system that’s user-friendly and allows easy uploads of product photos and descriptions.
- SKU generation: Auto-generating SKUs can help reduce costs and improve data accuracy.
- Analytics: Robust real-time analytics should inform decision-making, including sales and profit reports.
- Integrations: The system should easily integrate with other tools, and offer delivery options that boost local sales.
Multichannel inventory management case study: The Market at Grelen
With seasonal products, multiple locations, and over 100 vendors, The Market at Grelen relies on multichannel inventory management tools to organize their complex inventory. They use Square to manage vendors, count inventory, send purchase orders, and reward customers.