Inventory Management Tools Help Retailers Compete

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At a time when Amazon is offering free and same-day shipping, how do smaller retailers remain relevant? By offering the best customer service, including leveraging inventory management tools to optimize services and logistics.

The Amazon effect

Aside from two-day and same-day shipping, Amazon continues to disrupt the retail market by offering free shipping on all orders for the holiday season – even for customers who don’t have Prime accounts. To stay afloat, Walmart is now boosting its grocery service, which accounts for 56 percent of their revenue.

If you are a retailer concerned about the Amazon effect, there’s a lot you can do to leverage inventory management tools and software to meet demand.

Improve logistics

One area where Amazon and other businesses sometimes fall down concerns out of stocks and unavailable items. Offering free deliveries is great, but products must be available and on-hand.

Amazon, for example, has had issues with businesses that sell on their site. Instead of having 100% customer satisfaction, they may have 84%. In reading the feedback from customers, items may have arrived late or been incorrect. Here is where retailers can benefit from Amazon’s mistakes.

To improve shipping logistics, consider the following:

  • Look for ways to reduce the time it takes for packers to prepare items.
  • Have a quality assurance team to confirm that all deliveries are correct.
  • Use features like RFID tags to track packages, drivers, and vehicles. This is a hands-free way to track shipments. When you use RFID tags in conjunction with machine learning and AI, drivers can be alerted of faster routes. Retailers are made aware of delays ahead of time so they can make alternate plans.
  • Work with smaller warehouses and delivery companies to meet demand.
  • Use inventory management tools that have machine learning and AI to anticipate future demand. This reduces overages and excess inventory.

Leverage software and staff

One reason that large companies like Amazon are able to offer same-day shipping is that they use demand planning software and demand forecasting software to target future demand and benchmark performance. By creating and managing sales forecasts and “what if” scenarios, Amazon makes faster decisions based on reliable information, not guesswork.

Another reason companies like Amazon excel is that they use the best inventory management software. This ensures that they don’t carry excess inventory levels (overstocks) or run into shortages.

Work with partners

Businesses like Amazon and Walmart have something in common; they work closely with their distributors, warehouses, and other partners. They look for ways to reduce costs and they rely on facilities that are close to customers to ensure on-time delivery. This also helps retailers reduce the amount of labor that is required for order fulfillment.

Walmart works with Coca-Cola, Unilever, and other companies. They request a 15 percent reduction in wholesale costs. Lower costs, close proximity to customers, and reduced fuel charges help retailers achieve their bottom line.

Improve the customer experience

Happy customers stick with retailers, which is why improving the customer experience (CX) is vital. Remember that Amazon’s delivery services are not rated 100%.

To improve the customer experience, consider the following tips:

  • Let customers track their orders. This reduces the need to contact you for tracking status.
  • Ensure that your return policy is simple. This gives customers confidence when shopping.
  • Provide customer service through voice, text, email, or chat. Different generations engage differently.
  • Personalize services. To connect with customers, send special offers and discounts that are exclusive to them. Add value to every experience they have with your business.


Competing with Amazon sounds like a gargantuan task. That said, smaller retailers have several ways to maximize services and meet demand. Look for ways to improve shipping logistics and the customer experience. Tap into new technologies via inventory management tools and software.