Real-time inventory management is the holy grail of retail stock keeping. Having immediate insight into current and incoming levels would address several common challenges, but achieving that goal has proved challenging. The answer could lie with the Internet of Things (IoT).
IoT inventory management is the next phase in retailers’ journey to modernisation. However, that shift will not come on its own. Business leaders must understand how this technology can help them and implement it carefully to achieve the desired results.
Real-Time Inventory Visibility
The most straightforward advantage of IoT inventory management is that it provides real-time data on stock levels. While visibility has improved across the industry, fewer than half of all retailers have a consolidated view of their inventory across all channels in real time. At least 12% lack any kind of single point of visibility, and such barriers make stock-outs, delays and surpluses increasingly likely.
IoT trackers can emit a wireless signal detailing their location and status at all times. Cloud-based management solutions can then gather this data to provide a readily available record of how many of which items a store has in every section.
It’s also worth considering how gaining real-time insight into stock levels also improves accuracy. All inventory records will reflect up-to-date hard data, so there’s no room for miscounting, data entry mistakes or other human errors.
Automated Replenishing
Modern IoT solutions can go a step further by automatically ordering additional stock when in-store levels get low. Alternatively, they can alert staff when inventories near a certain point, suggesting the need to replenish. In either case, timely alerts prevent stock-outs.
Such automation is particularly valuable in setups where workers’ visibility is limited. Carousel shelving systems reduce floor space and boost retrieval efficiency but can make it difficult for employees to see when items are low. That’s no longer an issue if IoT trackers keep count of each product to alert the team when some stocks diminish.
These same use cases can apply throughout retail supply chains. When each warehouse or manufacturing facility can track its supplies in real time and automatically order additional stock when needed, delays and shortages become less likely across the board.
Smoother Customer Experiences
Fostering real-time inventory management through the IoT also enables consumer-facing benefits. Improved stock availability aside, having accurate data on each item’s location can help guide customers to what they’re looking for. Staff can point them in the right direction, or businesses can set up an in-store mobile experience to show customers where to go on a digital map.
IoT tracking enhances e-commerce sales, too. Today, 74% of U.K. retailers sell their products on up to three online marketplaces, and 24% sell through four or more. While great for reaching a larger audience, this can lead to stock problems when all platforms draw from the same inventory.
However, when the entire company has a single source of truth for real-time inventory levels, it’s easier to manage orders across platforms and update the stock on other sites accordingly. That way, all a retailer’s storefronts can list items as low or out of stock when necessary, preventing ordering mishaps.
IoT Inventory Management Best Practices
As beneficial as IoT inventory management can be, this technology also comes with some unique challenges. Retail leaders should understand these shortcomings to inform more effective IoT implementation strategies.
Cybersecurity is one of the biggest concerns. Roughly 98% of IoT traffic is unencrypted, and these devices can serve as easily hackable gateways to more sensitive company devices and data.
Retailers must also recognise that IoT data is only as useful as their capacity to support and act on it. In-store wireless networks must have sufficient bandwidth to enable so much real-time data transmission. Likewise, companies must use compatible cloud inventory management software to collect and view all relevant IoT data in one place so they can see and respond to it.
Businesses can address these needs by choosing devices with stronger built-in security controls, such as multi-factor authentication and encryption. Hosting IoT endpoints on a separate network from other devices will also help. As with other technologies, it’s best to train employees on the importance of good cyber hygiene to minimise human errors, too.
Using a newer network technology like 5G or mesh Wi-Fi is also a good idea. Mesh Wi-Fi supports automated load balancing to prevent congestion and enables more advanced security measures. Similarly, 5G offers considerable speeds and bandwidth while enabling better device segmentation through network slicing.
Finally, retailers can balance cost and complexity concerns through a slow, tiered approach. Start by using IoT inventory management in one store or for one product category and use this rollout as a trial to learn how to operate IoT systems effectively. Once it shows a positive return, organisations can expand their IoT investments.
The Age of Real-Time Inventory Management Is Here
In today’s fast-moving environment, retailers must capitalise on real-time data, especially regarding their inventories. IoT solutions are the answer here. These connected devices provide the information and automation potential necessary to take inventory management into the digital age.
As more businesses in this sector jump on this opportunity, real-time inventory management will become less of an edge and more of a necessity. Getting ahead of that trend is crucial to remaining competitive.
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