It’s no secret that many retailers worldwide are migrating to cloud-based inventory management systems. But why? If inventory is the lifeblood of a retailer, why are they putting it “out there” in the cloud?
Years ago, such a move would have been risky. Not only were internet connections “down” more often, but online security was also a major problem. Today these risks have evolved into strengths.
So why are they migrating? And, more importantly, what are the benefits for you? Here are 12 reasons for retailers to use cloud-based inventory management systems:
1. Real-Time Inventory Tracking
Want to know how many widgets you have in Store A right now? Or pull a total inventory number from all locations? Traditional inventory systems were notoriously unreliable during operating hours. Why? Because sales data was only batched to reconcile with inventory data periodically. Often, this didn’t take place until the off-hours. And then all the store level data had to be batched up to corporate before a true company-wide inventory number could be seen.
A cloud-based inventory system changes all that. Instead of separate data sources in every store, you now have one inventory source accessible by every store via the cloud. Sales are transmitted and can be reconciled in real-time without any batching needed.
2. Real-Time Business Intelligence
Along with the ability to track your inventory in real-time comes real-time business intelligence. At any given time, you can view a snapshot of inventory levels throughout the company. Such snapshots are critical for managing your supply chain, especially where fast-moving sales and seasonal items are concerned. You can run reports and make decisions based on what’s happening now – you no longer have to rely on yesterday’s data. Compare this to a GetApp Lab research report showing that 46% of small to medium businesses rely on the previous month's data reports in making decisions.
3. Visibility from Anywhere
With a cloud-based inventory system, your management team can access the data they need from virtually anywhere. All you need is a mobile device, an internet connection, and the right login authentication. Mobile and web applications can then present your data in whatever form you choose, scaled to individual screen sizes – whether you’re using a smartphone, tablet, laptop, or desktop computer.
4. Enable Omnichannel Solutions
Omnichannel sales will be one of the biggest retail trends over the next decade, according to VendHQ. Retailers will continue to sell from stores and websites, but they’ll also sell through social media, aggregate sales platforms, and even other stores. Managing inventory in the traditional store-based sense would be a nightmare in this scenario. But a cloud-based inventory system enables this by making it easy to locate and distribute inventory from anywhere, no matter the channel used.
5. Stores Become Distributed Fulfillment Centers
One of the biggest challenges of omnichannel solutions is treating each store not just as a retail location, but as a distribution center. This distributed fulfillment capability is key to unlocking many of the retail advantages offered by the cloud. In these models, according to Inbound Logistics, “Product in the warehouse and product in the stores form a single inventory pool, available to customers shopping via any channel.”
6. Data Backup and Redundancies
With a cloud-based inventory management system, you won’t need to worry about catastrophic data loss. In fact, you won’t need to manage data back-ups at all – the cloud can handle it for you. That’s because the companies hosting cloud data centers already have remote redundancy sites in place. All you need to do is select your preferred data backup and recovery services from your cloud provider. You’ll gain peace of mind knowing these cloud data centers are far more protected than any single retailer could manage alone.
7. Fewer Downtime Costs
The architecture underlying cloud servers is far more sophisticated than any home-grown IT platform could achieve. These cloud hosting services receive millions of dollars every month to provide reliable, uninterrupted service. Sure, there will always be hiccups here and there when it comes to technology, but cloud hosts possess the load-sharing and redundancy capabilities to deal with it. Compare that to the reliability of individual retail store servers – not to mention the costs in downtime, service fees, maintenance, and repairs to fix them at a local level.
8. Data Security
While data security is often a concern when moving critical data online, in most cases your data is more secure in cloud-based data centers, not less. The security features employed by a cloud provider are far more likely to be cutting-edge than your own security suite. When programs change, or significant updates are needed, it can take months to roll out on a store-by-store basis. This is not only a huge cost, it also exposes you to security risks in the interim. But in the cloud, changes such as this take place immediately – and most often invisibly – for you, the client.
9. Easy Integration
A cloud-based inventory management system can integrate easily with other cloud-based systems such as your CRM, HR, and accounting. And even if those systems aren’t yet in the cloud, chances are the interfaces are already written. Most ERP solution providers today not only incorporate cloud technologies, but also have mobile apps you can use. You can even manage all your cloud-based systems from a single dashboard in the cloud.
10. Enhanced Automation Opportunities
The seamless integration you can achieve – with your own internal systems as well as your supply chain partners' – using cloud-based systems offers a range of automation opportunities not present in traditional solutions. The increased reliability and real-time accuracy of inventory data can lead to automatic reordering from suppliers, inventory redistributing, and even price adjustments by location, to name a few.
11. Reduce Inventory Carrying Costs and Out of Stocks
Most retailers try to manage their inventory so that each store location has enough stock to cover the gap between truck shipments. With cloud-based inventory management, you can see in real-time when an item’s stock starts to dip. You (or your automated process) can then put in a transfer order that day, rather than waiting until the next day after batches have run. This could save you an entire day of out-of-stock expenses. When you consider this for every item in every location, it can amount to huge savings for your company. You can also save in inventory carrying costs by not needing as much stock to cover uncertainties in each location.
12. Scaling Your Business
Cloud-based systems are naturally scalable. So as your retail business grows, you won’t have to rebuild your infrastructure to keep pace with your capacity. You also won’t need to maintain, upgrade, and repair all the hardware and software utilized in your cloud solution. This represents a significant IT cost savings over time, and can make scaling your business as easy as flipping a switch on your cloud provider’s menu.
Take Advantage of a Cloud-based Inventory Management System
These are just some of the reasons why retailers are moving their inventory management systems to the cloud. DecisionPoint offers products, and will offer others in the near future, to help you take advantage of each and every one of these reasons. To see exactly how the cloud could benefit your own retail operations, please contact us today.