A recent New York Times article describes how Nordstrom increased sales and inventory turnover by linking its on-line inventory with that of its 115 stores. A integrated inventory allowed on-line customers to buy a product even though it was not available on-line: 'if the Web warehouse was out of that bag, it did not
matter. Inventory from Nordstrom’s 115 regular stores is also included.
Maybe there was just one handbag left in the entire company, sitting
forlornly in the back of the Roosevelt Field store — it would be
displayed on-line and store employees would ship it to the Web customer.' As a result of the inventory changes there were significant improvements in stock management and eventually sales and earrings: 'we can sell more without having to buy more inventory,' Mr Nordstrom said. 'That plays through to margins and, ultimately, earnings'.
Having worked on retail sites, one major challenge that comes to mind is that how certain is Nordstrom that the bag that appears to 'sitting forlornly in the back of the Roosevelt Field store' is actually there and not a)misplaced and impossible to locate, b) stolen, c) in good condition, and d) sold but never accurately registered. This is not to say that integrated inventory cannot work, quite the opposite; customers view a brand as one entity not separate touch-points. There are however, challenges in communicating to customers how reliable stock availability actually is.
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