In retail, inventory is both your greatest asset and your biggest challenge. An omnichannel approach requires you to balance the demands of a seamless shopping experience, whether through brick-and-mortar, online stores, or multi-channel platforms like Amazon and Shopify. Customers expect nothing less than exceptional service, top-quality products, and timely, reasonably priced delivery.

Recent industry insights highlight a critical gap: per a recent PwC survey, only a fraction of businesses, about 19%, successfully navigate omnichannel management while staying profitable. This is a stark indicator of the complex landscape in today's ecommerce environment.

The hurdles are manifold – rapid technological shifts in ecommerce, intensifying market competition, and elevated consumer expectations. Retailers strive to maintain profitability, manage inventory efficiently (echoing the Goldilocks principle of 'just right'), and reduce markdowns, which can significantly impact profits.

Navigating these challenges is essential for the success of even well-established multi-channel retailers. This discussion will delve into the obstacles facing omnichannel retailers and explore strategies for optimizing omnichannel inventory management to stay competitive.

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What is Omnichannel Inventory Management?

Omnichannel inventory management is the management of inventory across multiple sales channels like brick-and-mortar stores, ecommerce online stores, mobile popups, and even social media businesses. Omnichannel inventory management software, like Extensiv Order Manager, allows retailers to track inventory levels, analyze data, and automate tasks across multiple sales channels from a single platform.

Nomad Goods exemplifies the impact of omnichannel management. Starting from a Kickstarter project, they grew into a global brand with expanded product lines sold through various channels, including major retailers, their own online store, and, notably, Amazon. The integration of Skubana allowed Nomad to centralize inventory management across all these channels. This strategic move was pivotal in enhancing operational efficiency and improving sales performance across platforms, particularly on Amazon where they saw significant growth. Nomad's story highlights the importance of effective omnichannel strategies in today's diverse retail environment.

Challenges of Omnichannel Inventory Management

Omnichannel inventory management is a complex endeavor, pivotal for retailers aiming to reach their audience effectively across various platforms. However, this approach presents unique challenges that need strategic solutions.

Integrating Different Systems

Combining disparate systems for sales, inventory, and supply chain management is a significant hurdle. For instance, a retailer might use one system for their online store and another for their physical outlets. This disjointed approach leads to inefficiencies and inaccuracies. A solution lies in implementing an integrated platform like Extensiv Order Manager, which consolidates various systems into a cohesive unit, ensuring real-time updates and consistent data across all channels.

Cost Management

Balancing the costs of inventory across multiple channels is challenging. Overstocking can tie up capital, while being out of stock may lead to lost sales. For example, an ecommerce business might purchase excessive inventory for a discount but struggle to sell it. Using predictive analytics tools can help make demand planning more accurate and optimize stock levels, thereby managing costs more effectively.


Customers now dictate how, when, and where they receive products, demanding flexible and fast fulfillment options. This control shift requires retailers to adapt their inventory strategies for each sales channel. For instance, a brand might need to ensure same-day delivery for online orders while keeping sufficient stock in physical stores. Adopting an agile inventory management system that can quickly respond to these changing demands is essential.

Managing Multiple Streams

Retailers often start with distinct inventory management systems for each channel, making integration a challenge as the business grows. A common example is a brand initially focusing on ecommerce but expanding into physical retail or marketplaces like Amazon. Centralizing inventory management through a unified system can streamline your fulfillment process and provide a single source of truth.

Forecasting Demand

Accurately predicting customer demand across multiple channels is complex. Failing to meet demand results in lost sales, while overstocking leads to discounted surplus inventory. Retailers need to balance bulk buying advantages against actual demand. Forecasting tools, leveraging historical sales data and market trends, can provide more accurate predictions.

In summary, successfully managing omnichannel inventory involves overcoming challenges in system integration, cost management, customer-driven control, multi-stream management, and demand forecasting. Employing integrated software solutions, utilizing predictive analytics, and adopting flexible strategies are key to addressing these issues, ultimately satisfying customers and positively impacting the bottom line.

5 Ways to Optimize Omnichannel Inventory Management

1. Maintain Inventory Visibility 

A foundational element in omnichannel management is maintaining enterprise-wide visibility of inventory across all channels. As businesses grow and customer demands diversify, it's crucial to have a centralized inventory management system. Without this visibility, challenges like stock discrepancies, unfulfilled customer expectations, and inefficiencies in supply chain management become inevitable.

In 2024, the necessity for real-time inventory tracking is more critical than ever. Retailers must ensure that the inventory data from POS and brick-and-mortar stores, online platforms, and social media stores like Facebook is unified. This integration enables retailers to:

  • Guarantee product availability to customers.

  • Accurately inform about restocking dates.

  • Provide precise shipping and delivery timelines.

  • Locate products across different channels efficiently.

To prevent losing sales and harming customer relationships, retailers should implement a centralized database with easy access and real-time data updates (often through API or something like Extensiv). This system should enable managing inventory levels, fulfilling orders from any channel, and accessing comprehensive reports about all channels. It’s a strategic move to ensure that inventory discrepancies do not lead to lost sales or damaged customer loyalty.

The integration of advanced technologies like AI and IoT in inventory management systems is becoming increasingly prevalent, offering more precise tracking and forecasting capabilities. Retailers are now able to predict demand patterns more accurately and adjust their inventory strategies accordingly, thereby reducing deadstock or stockouts.

Implementing these strategies will not only improve ROI and customer satisfaction but also simplify operations as businesses scale. It’s about making inventory management efficient, responsive, and customer-centric.

2. Make Order Fulfillment Easy

In 2024, the agility in moving inventory across different sales channels remains a crucial aspect of omnichannel inventory management. This flexibility not only addresses demand fluctuations but also enhances overall operational efficiency.

Here's how easy order fulfillment can solve several omnichannel challenges:

  • Responding to Demand: When a product is popular in an ecommerce shop, you can swiftly reallocate stock from a physical store to meet this surge without additional orders. This responsiveness not only maintains sales momentum but also optimizes inventory use.

  • Reducing Markdowns: By effectively gauging customer interest through data analytics – like monitoring online searches, social media interactions, and website traffic – retailers can smartly distribute inventory across channels. This proactive approach significantly reduces the likelihood of excess stock that leads to markdown sales.

  • Inventory Monitoring: Constant vigilance is key. Assigning dedicated personnel or employing automated systems to track customer behavior across channels can prevent stockouts, which are detrimental to customer satisfaction and sales. For instance, a retailer using AI-driven tools can predict when a product is likely to run out and adjust inventory levels in advance.

  • Utilizing Omnichannel Management Tools: Investing in a robust omnichannel inventory management system is not enough; actively utilizing its features is crucial. These systems provide valuable insights that can guide inventory decisions. However, their effectiveness depends on active monitoring and data-driven decision-making.

Statistics indicate that in 2024, retailers who effectively manage their inventory across channels see a marked improvement in customer satisfaction and a reduction in lost sales due to stockouts or overstocking. With the increasing integration of AI and machine learning in inventory management, predictive analytics have become more accurate, allowing businesses to maintain optimal stock levels more effectively.

In essence, efficient order fulfillment across all sales channels is not just about having the right technology; it’s about strategically using these tools to respond to market dynamics, anticipate customer needs, and maintain a balanced inventory. This approach ultimately leads to a healthier bottom line and a more satisfactory customer experience.

3. Improve Your Return Policies

In the dynamic retail landscape of 2024, managing returns remains a significant challenge, particularly in omnichannel environments. Recent statistics indicate that ecommerce return rates are still notably higher than offline brick-and-mortar stores, with about 30% of all online orders being returned compared to a 9% return rate in physical stores. This disparity can surge during peak seasons like holidays.

The high rate of returns not only affects profitability but also adds operational complexities and can lead to customer dissatisfaction. A considerable portion of returns, approximately 65%, are attributed to seller errors, such as incorrect items shipped or product misrepresentation. The remaining returns often fall under various reasons, sometimes unspecified by customers.

Here are some actionable strategies to mitigate the impact of returns:

  • Clear Return Policies: Ensure that your return policies are transparent and easily accessible to customers at the point of purchase. Unclear policies can contribute to higher return rates.

  • Flexible Return Windows: Offering a generous return window can reduce the pressure on customers, potentially decreasing impulse returns and enhancing customer satisfaction.

  • Return Shipping Options: Retailers face a dilemma between charging for return shipping or absorbing the cost. A balanced approach could involve offering free returns for certain items or order values, or as part of a loyalty program, while charging for others.

  • Streamline Return Processing: Implement efficient systems to handle returns swiftly. This can include automated return labels, dedicated return centers, or partnerships with logistics companies for easier return drop-offs.

  • Leverage Returns Data: Analyze return trends to identify common issues and address them proactively. This could be related to product quality, sizing, or customer expectations.

Innovative retailers are exploring new ways to handle returns. For instance, some are using AI to predict return probabilities and offer instant refunds or exchanges, enhancing customer experience. Others are turning physical stores into return centers for online purchases, integrating the omnichannel experience.

Ultimately, refining return policies and processes is not just about reducing costs but also about building trust and loyalty with customers. The right balance can lead to improved customer satisfaction and, in turn, better financial outcomes for retailers.

Encourage In-Store Returns

Leveraging multiple sales channels can significantly reduce return costs. For example, if a customer buys a shirt online but finds it doesn't fit, encourage them to return it to a physical store, like Torrid does. This approach saves shipping costs and offers customers the opportunity to immediately find a suitable alternative in-store. Such a strategy not only retains the sale but also potentially converts a return into an in-store purchase.

Have a Clear Return Policy

Visibility of return policies can positively impact customer confidence and likelihood of purchase. Place links to your return policy prominently on your eCommerce site, in physical store receipts, and in customer emails, like This transparency can alleviate customer concerns and encourage more sales.

Give Customers Time

A flexible return window is crucial for customer satisfaction. Lengthy shipping times shouldn’t eat into the return period. Extending return windows, similar to L.L. Bean's approach, can decrease the pressure on customers, potentially reducing the number of returns and boosting customer confidence in purchasing from your brand.

Have an Internal Return Process in Place

A streamlined internal process for handling returns is vital for efficiency and cost management. Regardless of the return channel, having a well-organized system for processing, evaluating, and re-listing returned items can significantly reduce operational costs. This clarity in returns management can also enhance inventory visibility, making it easier to reintegrate returned items into your sales channels.

Positive returns experiences are crucial; statistics show that 89% of customers are likely to revisit an online store after a satisfying return process. Even if customers return items, a positive experience can lead them to make future purchases, benefiting your business in the long run.

4. Improve Customer Access to Products

Do you want an easy way to balance the inventory of your brick-and-mortar shop and ecommerce store, while also reducing costs?

Offer customers easier access to products offering a Click and Connect option like John Lewis does.

Click and Collect services give online customers an easy way to get the items they purchase from a local store after being delivered from your warehouse.

Not only does this negate the need for them to pay any kind of shipping costs (which they love), it gives you a chance to simplify warehouse management by combining your omnichannel inventory into one warehouse.

With enough visibility into this one unified warehouse, you can then deliver products to the stores as each customer requests, alongside other product that is going on display in the physical shop.

Again, this saves you shipping costs (you have to send physical inventory to your brick-and-mortar shops anyways) and makes the process a lot less disjointed.

Another helpful strategy is to inform customers during the buying process where any one product is available in a certain location, much like Schuh does.

You can buy online and collect at your favorite store, reserve the product in-store and collect in 20 minutes, or use the traditional online purchasing process and have it delivered to your home.

These choices make managing inventory a lot easier and lets customers decide when and how they want their orders fulfilled, which meets their expectations.

5. Use a Reliable Omnichannel Inventory Management System

In the dynamic retail environment of 2024, a robust and efficient omnichannel inventory management system is indispensable for seamless multi-channel operations. Extensiv Order Management, formerly known as Skubana, stands out as a comprehensive solution, offering advanced features to streamline inventory management across various fulfillment models, be it in-house warehouses, third-party logistics (3PLs), dropshippers, or Fulfillment by Amazon (FBA) centers.

Key features of Extensiv Order Manager that enhance multi-channel inventory management include:

  • Inventory Counts: It offers a centralized database for all physical inventory. This feature ensures real-time visibility of all SKUs across different channels, with automatic updates as sales occur, maintaining accurate inventory counts.

  • Core vs Bundle/Kit Inventory: This functionality allows retailers to efficiently manage core products and their bundled or kitted versions, eliminating the need to break down pre-packaged inventory. Extensiv optimizes this process by utilizing core products to create bundles and kits, enhancing inventory efficiency.

  • Multi-warehouse Inventory Automation: Manage inventory across multiple warehouses seamlessly. This system automates the import of inventory data, shipment details, and customer order information, streamlining operations across various locations.

  • Over and Underselling Prevention: Inventory companies like Extensiv help in setting optimal inventory levels to prevent both overselling and underselling. Defining specific percentages of available inventory ensures that popular items are always in stock without overstocking less popular ones.

  • Multiple Pick Locations: The system supports the creation of multiple picking locations within a warehouse, integrating barcoding for efficient picking, restocking, and inventory quantity management.

In the current retail landscape, where efficiency and accuracy are paramount, Extensiv Order Manager provides the necessary tools for retailers to stay ahead. Its comprehensive feature set not only simplifies inventory management across channels but also contributes significantly to customer satisfaction by ensuring product availability and timely fulfillment.

Final Thoughts

Having an inventory management strategy is crucial for many reasons. It prevents problems associated with having too much or too little of one product, keeps customer satisfaction high, builds brand recognition, and of course, generates you more revenue than ever before.

Not to mention, it saves you lots of headaches.

Unfortunately, many retailers continue to struggle to bring their multiple channels together and maintain a profit. Especially as consumer demand and expectation increase (and must be met if you want their business).

In this highly competitive retail world, no matter which channel you sell on, you’ll need to manage inventory to stay ahead. In fact, poor inventory management can be the cause of your financial decline and ruin your business; if not now, sometime down the road.

So, take matters into your own hands and get a handle on your omnichannel inventory management.

In fact, schedule a demo and get your inventory management system in place so you can do what you originally set out to do – build a strong brand in your industry, meet consumer demand, and make some money.

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Frequently Asked Questions about Omnichannel Inventory Management

What are some benefits of omnichannel inventory management?

Omnichannel inventory management offers numerous benefits, including enhanced customer satisfaction through consistent product availability across all channels. It also improves operational efficiency, reduces inventory costs, and enables real-time inventory tracking, leading to more informed decision-making.

How can businesses optimize their omnichannel inventory management?

Businesses can optimize their omnichannel inventory management by implementing a centralized inventory system, utilizing predictive analytics for accurate demand forecasting, and adopting flexible fulfillment strategies. Streamlining return processes and integrating advanced technologies like AI for real-time data analysis are also crucial.

What are some tools or software used in omnichannel inventory management?

Key tools in omnichannel inventory management include integrated platforms like Extensiv Order Manager, which centralizes inventory across channels. Systems offering features like real-time tracking, multi-warehouse management, and predictive analytics are essential for managing complex inventory landscapes effectively.

From the shopping cart to delivery, Extensiv makes order fulfillment seamless and easy. Total visibility. Total control.