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Managing the unpredictable: The inventory conundrum

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There is a very special name for stuff before it is sold: inventory.

Online retailers want to have enough inventory to meet demand. Having too much is bad, since you must pay to store it, plus there is an opportunity cost in lost sales. Having too little is bad, because it’s hard to deliver instant gratification if you lack the item the consumer desires and that sale is lost.

When COVID-19 happened, manufacturing, shipping and storage all became wild and unpredictable.
Those factors are intertwined and impact each other. Digital marketers and online retailers must sort through this thicket, all the while being wary of the next unpredictable event.

Just how will they do that?

Read next: How logistics and the supply chain impact customer experience

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Before and after

The world used to run on “just in time” inventory. Merchandise at rest is a cost, minimized if the stuff sells shortly after it arrives at the warehouse or fulfillment center. Supply chains were taut throughout the system, from parts to manufacturer, from manufacturer to shipping, from shipping to seller, from seller to customer. Merchandise spent more time in motion than at rest.

Just in time inventory still exists…sort of. “There are still companies with [such] predictable supply and demand profiles that just-in-time still works,” said Mark Hart, Chief Operating Officer of Pollen Returns, a pick-up service for e-commerce businesses.

But as companies migrated to online sales, the weaknesses of just-in-time inventory were exposed. Parts could not get to factories. Sometimes factories closed. Finished goods could not always ship. Warehouses might have that item or might not. “There is a running joke that companies are migrated from just-in-time to just-in-case,” Hart said.

So how do online merchants react when their supply chains snap?

One quick fix is to throw money at the problem, basically spending more on air cargo and shipping, explained Matt Garfield is a Managing Director in FTI Consulting’s retail and consumer products practice (FTI is a global business advisory firm). That can still leave vendors waiting for the goods to arrive while staring at empty shelves.

Or they can go big on just-in-case, but “retailers may have swung the pendulum too far,” Garfield said. Merchants report excess inventory — and undertaking promotions to clear it. “Going forward, we expect to see retailers adjust their inventory models to bridge the divide between JIT inventory and current inventory models. Key focus should be ensuring higher holdings of high velocity, common products while reducing holdings (and potentially introducing sales risk) for lower velocity products.”

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“Nearly all of the clients we work with are going through a supply chain review, looking for risks, trying to find alternative or additional suppliers,” said Russ Sharer, Chief Sales Officer for the Brooks Group, a sales training and leadership consultancy. While some clients will hold more inventory, “most will qualify additional suppliers…and balance the business between them as a primary risk strategy. As we are seeing today with large retailers, holding inventory is risky if buyer’s tastes change.”

Read next: Our interview with Pollen’s founder, Spencer Kieboom

Use data, not a crystal ball

Online retailers can’t rely on a fortune teller peering into a crystal ball to get inventory right. But
brands have a lot of data to analyze that can aid forecasting. For big companies, this is not usually a problem. Seasonal demand is easy to predict — Christmas and the holidays, back to school, and so on. Beyond that, you need a different approach.

“I’d say that 70-80% of overall revenue can be modeled well.” Sharer said. “The remaining is either too new or has too unpredictable demand. In my experience, it’s a lot easier for companies to model for smooth demand than for peaks and valleys.”

Hart offered a more pro-active approach: Online retailers must take a position on what they want to sell. Basically, an online retailer uses technology to create a demand for specific items, a strategy that ideally makes demand more predictable.

“’What if’ analyses have been a frequent tool for retailers to plan for potential scenarios (both upside and downside) and quantify the impact to inventory holdings.” Garfield said. But you can “only test for scenarios developed or envisioned by the retailer (typically percentage increases/decreases in demand or supply).”

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Read next: The Brooks Group on building customer trust while the supply chain is in crisis


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“Forecasting demand is rarely 100% accurate, but there are steps you can take to get your estimates closer to actuals,” said Casey Armstrong, CMO of ShipBob, a third-party logistics firm. Look at historical data and seasonality. Think through planned promotions and anticipated spikes. Optimize stock levels by tracking fast-selling vs. slow-moving items. Decide how much of each SKU to reorder and when.

Merchandisers and marketers do “finger in the air” forecasting, expecting an item to sell when in fact it may not move at all, noted Dave Emerson, SVP for global e-commerce at global freight and delivery firm Sekologistics. “No one gets fired,” Emerson said. “It’s the cost of doing business.”

Emerson recalls one client who got it wrong. They were paying $400,000 per month to warehouse goods that did not move at all — for eight months. “During the pandemic, they took a punt,” he said. Which leads to the psychology of inventory. It’s like a comfort blanket.

“You can put your arm around it to make sure that it’s there. But that costs money,” he said. There must be a better way. It is one thing to take comfort from having inventory. It is another to know when to get the goods — and being able to sell through.

This is the first part of a two-part article.


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About The Author

William Terdoslavich is a freelance writer with a long background covering information technology. Prior to writing for MarTech, he also covered digital marketing for DMN.

A seasoned generalist, William covered employment in the IT industry for Insights.Dice.com, big data for Information Week, and software-as-a-service for SaaSintheEnterprise.com. He also worked as a features editor for Mobile Computing and Communication, as well as feature section editor for CRN, where he had to deal with 20 to 30 different tech topics over the course of an editorial year.

Ironically, it is the human factor that draws William into writing about technology. No matter how much people try to organize and control information, it never quite works out the way they want to.

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The Role of Enterprise Mobility Management in Modern Businesses

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The Role of Enterprise Mobility Management in Modern Businesses

In today’s fast-paced business environment, Enterprise Mobility Management (EMM) has emerged as a critical facilitator for enhancing operational efficiency and competitiveness. EMM solutions streamline workflows, ensuring that enterprises can adapt to the rapidly changing digital landscape. This blog discusses the indispensable role of EMM in modern businesses, focusing on how it revolutionizes workflows and positions businesses for success.

EMM solutions act as the backbone for securely managing mobile devices, applications, and content that facilitate remote work and on-the-go access to company resources. With a robust EMM platform, businesses can ensure data protection and compliance with regulatory requirements, even in highly dynamic environments. This not only minimizes the risk of data breaches but also reinforces the company’s reputation for reliability and security.

Seamless Integration Across Devices

In today’s digital era, seamless integration across devices is not just a luxury; it’s a necessity for maintaining operational fluency within any organization. Our EMM solutions are designed to ensure that employees have secure and efficient access to the necessary resources, irrespective of the device being used. This cross-platform compatibility significantly enhances productivity by allowing for a unified user experience that supports both the agility and dynamism required in modern business operations. Leveraging cutting-edge technology, our solutions provide a cohesive ecosystem where data flows securely and effortlessly across mobile phones, tablets, and laptops, ensuring that your workforce remains connected and productive, regardless of their physical location. The adoption of our EMM solutions speaks volumes about an organization’s commitment to fostering a technologically forward and secure working environment, echoing its dedication to innovation and excellence.

Enhanced Productivity

EMM facilitates the seamless integration of mobile devices into the corporate environment, enabling employees to access corporate resources from anywhere. This flexibility significantly enhances productivity by allowing tasks to be completed outside of traditional office settings.

Unified Endpoint Management

The incorporation of Unified Endpoint Management (UEM) within EMM solutions ensures that both mobile and fixed devices can be managed from a single console, simplifying IT operations and enhancing security.

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Advanced Security Protocols

Where cyber threats loom larger than ever, our EMM solutions incorporate cutting-edge security protocols designed to shield your organization’s data from unauthorized access and breaches. By consistently updating and refining our security measures, we ensure your assets are protected by the most advanced defenses available. This commitment to security not only safeguards your information but also reinforces your company’s reputation as a secure and trustworthy enterprise.

Data Protection

EMM solutions implement robust security measures to protect sensitive corporate data across all mobile devices. This includes encryption, secure VPN connections, and the ability to remotely wipe data from lost or stolen devices, thereby mitigating potential data breaches.

Compliance Management

By enforcing security policies and ensuring compliance with regulatory standards, EMM helps businesses avoid costly fines and reputational damage associated with data breaches.

Driving Operational Efficiency

In the quest to drive operational efficiency, our solutions streamline processes, reduce redundancies, and automate routine tasks. By leveraging cutting-edge technologies, we empower businesses to optimize their workflows, resulting in significant time and cost savings. Our approach not only enhances operational agility but also positions your organization at the forefront of innovation, setting a new standard in your industry.

Automated Workflows

By automating repetitive tasks, EMM reduces manual efforts, increases accuracy, and speeds up business processes. This automation supports operational efficiency and allows employees to focus on more strategic tasks.

Real-time Communication and Collaboration

EMM enhances communication and collaboration among team members by providing tools that facilitate real-time interactions. This immediate exchange of information accelerates decision-making processes and improves project outcomes.

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Testimonials from Industry Leaders

Leaders in various industries have witnessed tangible benefits from implementing EMM solutions, including increased productivity, improved security, and enhanced operational efficiency. Testimonials from these leaders underscore the transformative impact of EMM on their businesses, solidifying its vital role in modern operational strategies.

Our commitment to innovation and excellence propels us to continually refine our EMM solutions, ensuring they remain at the cutting edge of technology. This dedication not only solidifies our standing as industry leaders but also guarantees that our clients receive the most advanced and effective operational tools available, tailored specifically to meet their unique business challenges.

Looking Ahead

The evolution of EMM solutions continues at a rapid pace, with advancements in technology such as Artificial Intelligence (AI), Machine Learning (ML), and the Internet of Things (IoT) further enhancing their capabilities. These developments promise even greater efficiencies, security measures, and competitive advantages for businesses willing to invest in the future of mobility management.

Our proactive approach to integrating emerging technologies with EMM solutions positions our clients at the forefront of their industries. By leveraging our deep technical expertise and industry insights, we empower businesses to not only adapt to but also lead in an increasingly digital world, ensuring they remain competitive and resilient amidst rapid technological shifts.

In conclusion, the role of Enterprise Mobility Management in modern businesses cannot be overstated. Its ability to revolutionize workflows, enhance security, and drive operational efficiency positions it as a foundational element of digital transformation strategies. We invite businesses to explore the potential of EMM solutions and partner with us to achieve unprecedented levels of success and innovation in the digital era. Together, we can redefine the boundaries of what is possible in business operations and set new benchmarks for excellence in the industry.

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Lessons From Air Canada’s Chatbot Fail

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Lessons From Air Canada’s Chatbot Fail

Air Canada tried to throw its chatbot under the AI bus.

It didn’t work.

A Canadian court recently ruled Air Canada must compensate a customer who bought a full-price ticket after receiving inaccurate information from the airline’s chatbot.

Air Canada had argued its chatbot made up the answer, so it shouldn’t be liable. As Pepper Brooks from the movie Dodgeball might say, “That’s a bold strategy, Cotton. Let’s see if it pays off for ’em.” 

But what does that chatbot mistake mean for you as your brands add these conversational tools to their websites? What does it mean for the future of search and the impact on you when consumers use tools like Google’s Gemini and OpenAI’s ChatGPT to research your brand?

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AI disrupts Air Canada

AI seems like the only topic of conversation these days. Clients expect their agencies to use it as long as they accompany that use with a big discount on their services. “It’s so easy,” they say. “You must be so happy.”

Boards at startup companies pressure their management teams about it. “Where are we on an AI strategy,” they ask. “It’s so easy. Everybody is doing it.” Even Hollywood artists are hedging their bets by looking at the newest generative AI developments and saying, “Hmmm … Do we really want to invest more in humans?  

Let’s all take a breath. Humans are not going anywhere. Let me be super clear, “AI is NOT a strategy. It’s an innovation looking for a strategy.” Last week’s Air Canada decision may be the first real-world distinction of that.

The story starts with a man asking Air Canada’s chatbot if he could get a retroactive refund for a bereavement fare as long as he provided the proper paperwork. The chatbot encouraged him to book his flight to his grandmother’s funeral and then request a refund for the difference between the full-price and bereavement fair within 90 days. The passenger did what the chatbot suggested.

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Air Canada refused to give a refund, citing its policy that explicitly states it will not provide refunds for travel after the flight is booked.

When the passenger sued, Air Canada’s refusal to pay got more interesting. It argued it should not be responsible because the chatbot was a “separate legal entity” and, therefore, Air Canada shouldn’t be responsible for its actions.

I remember a similar defense in childhood: “I’m not responsible. My friends made me do it.” To which my mom would respond, “Well, if they told you to jump off a bridge, would you?”

My favorite part of the case was when a member of the tribunal said what my mom would have said, “Air Canada does not explain why it believes …. why its webpage titled ‘bereavement travel’ was inherently more trustworthy than its chatbot.”

The BIG mistake in human thinking about AI

That is the interesting thing as you deal with this AI challenge of the moment. Companies mistake AI as a strategy to deploy rather than an innovation to a strategy that should be deployed. AI is not the answer for your content strategy. AI is simply a way to help an existing strategy be better.

Generative AI is only as good as the content — the data and the training — fed to it.  Generative AI is a fantastic recognizer of patterns and understanding of the probable next word choice. But it’s not doing any critical thinking. It cannot discern what is real and what is fiction.

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Think for a moment about your website as a learning model, a brain of sorts. How well could it accurately answer questions about the current state of your company? Think about all the help documents, manuals, and educational and training content. If you put all of that — and only that — into an artificial brain, only then could you trust the answers.

Your chatbot likely would deliver some great results and some bad answers. Air Canada’s case involved a minuscule challenge. But imagine when it’s not a small mistake. And what about the impact of unintended content? Imagine if the AI tool picked up that stray folder in your customer help repository — the one with all the snarky answers and idiotic responses? Or what if it finds the archive that details everything wrong with your product or safety? AI might not know you don’t want it to use that content.

ChatGPT, Gemini, and others present brand challenges, too

Publicly available generative AI solutions may create the biggest challenges.

I tested the problematic potential. I asked ChatGPT to give me the pricing for two of the best-known CRM systems. (I’ll let you guess which two.) I asked it to compare the pricing and features of the two similar packages and tell me which one might be more appropriate.

First, it told me it couldn’t provide pricing for either of them but included the pricing page for each in a footnote. I pressed the citation and asked it to compare the two named packages. For one of them, it proceeded to give me a price 30% too high, failing to note it was now discounted. And it still couldn’t provide the price for the other, saying the company did not disclose pricing but again footnoted the pricing page where the cost is clearly shown.

In another test, I asked ChatGPT, “What’s so great about the digital asset management (DAM) solution from [name of tech company]?” I know this company doesn’t offer a DAM system, but ChatGPT didn’t.

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It returned with an answer explaining this company’s DAM solution was a wonderful, single source of truth for digital assets and a great system. It didn’t tell me it paraphrased the answer from content on the company’s webpage that highlighted its ability to integrate into a third-party provider’s DAM system.

Now, these differences are small. I get it. I also should be clear that I got good answers for some of my harder questions in my brief testing. But that’s what’s so insidious. If users expected answers that were always a little wrong, they would check their veracity. But when the answers seem right and impressive, even though they are completely wrong or unintentionally accurate, users trust the whole system.

That’s the lesson from Air Canada and the subsequent challenges coming down the road.

AI is a tool, not a strategy

Remember, AI is not your content strategy. You still need to audit it. Just as you’ve done for over 20 years, you must ensure the entirety of your digital properties reflect the current values, integrity, accuracy, and trust you want to instill.

AI will not do this for you. It cannot know the value of those things unless you give it the value of those things. Think of AI as a way to innovate your human-centered content strategy. It can express your human story in different and possibly faster ways to all your stakeholders.

But only you can know if it’s your story. You have to create it, value it, and manage it, and then perhaps AI can help you tell it well. 

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Cover image by Joseph Kalinowski/Content Marketing Institute

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Only 6% of global marketers apply customer insights to product and brand

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Only 6% of global marketers apply customer insights to product and brand

While many brands talk about focusing on the customer, few do it. Less than a quarter (24%) of global brands are mapping customer behavior and sentiment, according to Braze’s 2024 Customer Engagement Review. What’s worse, only 6% apply customer insights to their product and brand approach.

“At the end of the day, a lot of companies operate based on their structure and not how the consumer interacts with them,” Mariam Asmar, VP of strategic consulting, told MarTech. “And while some companies have done a great job of reorienting that, with roles like the chief customer officer, there are many more that still don’t. Cross-channel doesn’t exist because there are still all these silos. But the customer doesn’t care about your silos. The customer doesn’t see silos. They see a brand.”

Half of all marketers report either depending on multiple, siloed point solutions to cobble together a multi-channel experience manually (33%); or primarily relying on single-channel solutions (17%).  Only 30% have access to a single customer engagement platform capable of creating personalized, seamless experiences across channels. This is a huge problem when it comes to cross-channel, personalization.

The persistence of silos

The persistence of data silos despite decades of explanation about the problems they cause, surprised Asmar the most.

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Screenshot 2024 02 27 140015
Source: Braze 2024 Global Customer Engagement Review

“Why are we still talking about this?” she said to MarTech. “One of the themes I see in the report is we’re still getting caught up on some of the same stumbling blocks as before.”

She said silos are indicative of teams working on different goals and “the only way that gets unsolved is if a leader comes in and aligns people towards some of those goals.”

These silos also hinder the use of AI, something 99% of respondents said they were already doing. The top uses of AI by marketers are:

  • Generating creative ideas (48%).
  • Automating repetitive tasks (47%).
  • Optimizing strategies in real-time (47%).
  • Enhancing data analysis (47%).
  • Powering predictive analytics (45%).
  • Personalizing campaigns (44%). 

Despite the high usage numbers, less than half of marketers have any interest in exploring AI’s potential to enhance customer engagement. Asmar believes there are two main reasons for this. First is that many people like the systems they know and understand. The other reason is a lack of training on the part of companies.

Dig deeper: 5 ways CRMs are leveraging AI to automate marketing today

“I think about when I was in advertising and everybody switched to social media,” she told MarTech. “Companies acted like ‘Well, all the marketers will just figure out social media.’ You can’t do that because whenever you’re teaching somebody how to do something new there’s always a level of training them up, even though they’re apps that we use every day, as people using them as a business and how they apply, how we get impact from them.”

The good news is that brands are setting the stage for the data agility they need.

  • 50% export performance feedback to business intelligence platforms to generate advanced analytics.
  • 48% sync performance with insights generated by other platforms in the business.

Also worth noting: Marketers say these are the four main obstacles to creativity and strategy:  

  • Emphasis on KPIs inherently inhibits a focus on creativity (42%).
  • Too much time spent on business-as-usual execution and tasks (42%).
  • Lack of technology to execute creative ideas, (41%).
  • Hard to demonstrate ROI impact of creativity (40%).
Screenshot 2024 02 27 135952Screenshot 2024 02 27 135952

Methodology

The 2024 Global Customer Engagement Review (registration required) is based on insights from 1,900 VP+ marketing decision-makers across 14 countries in three global regions: The Americas (Brazil, Mexico, and the US), APAC (Australia, Indonesia, Japan, New Zealand, Singapore, and South Korea), and EMEA (France, Germany, Spain, the UAE, and the UK).

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