Stockouts are every D2C brand’s worst nightmare. Not only do they lead to lost sales, but out-of-stock items also result in reduced customer satisfaction and diminished brand loyalty.
D2C brands, whether having a small-scale or large-scale operation, need to ensure that they don’t allow customers to place orders for quantities higher than the available stock, or beyond the expected lead time of the product
Since inventory management is a tricky affair often witnessing inaccuracies, it is important to have a system in place that can instantly identify and flag issues of this kind. Not doing so could result in lost sales.
Here is a real world example of how a fashion brand managed to avert severe losses due to the timely intervention of Shoptimize's intelligent growth engine.
The brand, a leading men's ethnic wear company, had just completed a successful run during the recent festive period. Following that, the brand wanted to make sure that their post festive season inventory was updated.
While this activity was in progress, suddenly the D2C store started to experience a sharp drop in sales. Within a day, the revenue had dropped to 33% of daily average value, and alarmingly, it saw a further 50% drop on the same evening.
This sharp decline, which was outside of the normal sales trend, was immediately flagged by the Shoptimize Growth Platform as an anomaly
The brand immediately initiated an investigation. Root cause analysis identified that the brand had made adjustments to their inventory earlier in the week. The brand wanted to ensure that customers were unable to place orders for quantities higher than the available stock.This meant that for a select few products that were unavailable, the Tag had to be set to 'Deny'. This would ensure that customers would not be able to place orders for higher than available quantities and hence avoid frustration with unfulfilled orders.
Therefore, to prevent this, the product sheet was downloaded from Shopify and changed the Tag value for specific products. However, once the file was updated, the data in the file overwrote all existing Shopify values. This resulted in all the products (even the ones not a part of the list uploaded) being shown as out of stock. This was the key reason for the drop in revenue.
Once the root cause of the problem was revealed, the team figured out that the Unicommerce and Shopify systems were not in sync and hence the inventory update on Unicommerce wasn’t reflecting on Shopify. This was the reason that the products on the brand’s website were showing as being out of stock. With the help of the team at Shoptimize, the brand was able to update the sheet with the correct configurations and upload it on Shopify.
This immediately reflected on the website, with the products being shown as back in stock. Further, for seamless data operations between the Unicommerce and Shopify platforms, a manual sync was enabled, post which accurate inventory information began reflecting on both the systems.
A major challenge faced by the brand was the reliance on manual inventory management which was prone to errors.
Fortunately, the D2C brand had been using the Shoptimize Growth Platform for quite some time. Since the platform was familiar with usual sales trends and is designed to flag any anomalies in the system, it was able to flag an issue as soon as the pattern changed.
Further, the brand is now looking to automate their inventory management, and integrate this system with Shoptimize as well, so that they never run into issues of this kind again.
Real-time tracking and alert systems are essential to every D2C brand to catch these issues in time and to avoid them in the future.
Most D2C brands run an inventory, website performance, and Ad performance check on a weekly basis. Without the intelligence from the Shoptimize Growth Platform, this would have meant a week's delay in identifying and resolving the issue. However, thanks to timely alerts, the issue was resolved in under 3 days preventing serious business loss and brand dilution.