If you are running a business, especially a Consumer Packaged Goods (CPG) one, or you’ve simply been in business more than the last few years, you know that almost everyone buys something online at some point.
Global data platform, Statista tracks over 170 industries worldwide published their measurement findings earlier this year: In 2016, 209.6 million U.S. people were shopping online and that number is expected to reach 230.5 million by the end of 2021. (Coppola, 2021)
Make no mistake – Any business that plans to thrive in today’s economy should be utilizing omni-commerce channels to stay in the game.
The challenge is that most companies have multiple products, varying supply chains, and multiple channels to manage. This can become overwhelming, time consuming, and costly.
Enter STOPWATCH™ (How it Works, 2019), we have covered the market delivering the latest in organizational management for brick and mortar and Unified Commerce channels, saving them time and money.
When YOU can focus on the most important elements of your business, and allow us to help manage the data, it becomes a win-win for everyone.
Currently, managing multiple channels is like having a dog walking business. Let’s say you have 10 dogs, with multiple leash lengths with all the dogs going in all directions and you are walking down the streets of New York City trying to keep them in line. STOPWATCH™ is the leash, only this leash comes with a preemptive buzz that lets you know when one is starting to stray so you can adjust before anything happens… you lose control, you drop a leash, they all head for one squirrel, what ever it is. Not only do we alleviate those possibilities…
We Put You In Control!
That is the STOPWATCH™ difference. This is what sets us apart and therefore why we care so much. Our desire is to help you increase your time on what matters most, development, people, products, while saving you money. We use techniques that help us with navigating and understanding market trends vs channel trends to alleviate risk pooling that virtually eliminates inventory challenges, which is where companies struggle the most.
How can we do this? Put on your best pair of shoes, grab your dogs and let’s go for a walk.
Risk Pooling… The Supply Chain Technique
Most people understand risk pooling in terms of insurance – “the collection and management of financial resources so that large, unpredictable individual financial risks become predictable and are distributed among all members of the pool.” (World Health Organization). In terms of supply chains management for CPGs and other Unified Commerce organizations, risk pooling, as described by University of Michigan Ross School of Business researchers can be described as the “pooling of online demand across customer locations” (Aravind Govindarajan, 2019), becomes more than just a nicety, it is a necessity, or as we call it, “table stakes.”
What is more important than reducing the risks associated with managing all your channels effectively?
Risk pooling in our world equates to decreasing demand variability and uncertainty across all your channels. Ultimately, using risk pooling allows for a decrease in safety stock which reduces the financial impact (i.e.: makes it cheaper for you) and makes it easier to manage your supply chain(s) (Hofer, 2020).
Knowing where your inventory rests at continually, creates an urgency to be ahead of the game in terms of fulfillment, distribution, and replenishment so that your customers are not left out in the dark. Decisions can now be made by taking account of inventory levels across all channels rather than simply one. And the best news is that this can happen in real time.
Risk Pooling is best described in the following equation:
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This technique optimizes both online and offline inventories in real time. STOPWATCH™ operates as the ‘mission’ control’ center of your supply chain so that you can maintain a 24/7 awareness of your inventory assets.
Market Trends Vs Channel Trends
Where many organizations stifle themselves is by failing to differentiate market trends and channel trends and failing to see how they work together as a natural checks and balances as it relates to inventory control, data management, and time/money ratios.
Quite simply, when you combine your channels, you can detect market trends, whereas comparing channels allows you to detect channel trends.
Market trends will certainly fluctuate, however there are a few staples that must be accounted for inside of detecting market trends, which directly affect your channel operations. The biggest ones are:
- Customer Need (number 1)
- Customer Knowledge
- The Actual Product (its features and benefits)
- Customer experience
As you can see, connecting face to face is one of the least reasons for the market to move, due to a Unified Commerce advancement that has become the easy way to shop over the past 10+ years. In other words, customers overwhelmingly seem to prefer speed and convenience over human interaction (at least in the consumer world). If that is the case, then why not be on top of your game.
Certainly, the best CPG organizations rely on both face to face and (hopefully) multiple Unified Commerce channels to maintain market share and knowing where you are at any given moment puts you ahead.
With the ease of information on the internet, some customers will have more knowledge of your products than some of your own employees. They research, they compare, they read reviews, and come with the aim of purchasing… ensure the need they have can be filled by you… now.
Similarly, we live in a world where information is available 24/7/365. This is where STOPWATCH™ shines the best for your organization since we deliver updates in real time (think holiday rush) in order to fill your customers orders when requested. With some of the top used marketing channels pushing people into the ‘ease of Omni Commerce’ being ready to adjust on the fly will position your organization to be ready to handle what comes your way.
The Bottom Line
Everyone wants to understand the bottom line and with good reason, it is important. Being able to maintain consistency, stay profitable, and deliver on the customer experience all while managing multi-channel inventories all play into how successful your organization will be.
Your customers really want you to be everywhere and anywhere they are as well as provide them the freedom and the luxury to purchase at a moments notice. If you maintain awareness to how utilizing risk pooling can help your business and can detect market trends alongside of channel trends, you can rest assured that your customers will stay with you. You will even gain more along the way, and who doesn’t welcome in new customers, especially when the buying process is simplified for them.
Reach out to us at Connect@stopwatch.tech for more information
Deeper Dive Sources:
Aravind Govindarajan, A. S. (2019, January 1). Distribution0free Inventory Risk Pooling in a Multi-locaiton Newsvendor. Working Paper no. 1389. Ann Arbor, Michigan, United States: Ross School of Business.
Brief 4: Risk Pooling Mechanisms (2010, July 5) Retrieved from World Health Organization: https://www.who.int/immunization/programmes_systems/financing/analyses/Brief_4_Risk-Pooling.pdf?ua=1
Coppola, D. (2021, July 7). United State: Number of digital shoppers 2016-2021. Retrieved from https://www.statista.com: https://www.statista.com/statistics/183755/number-of-us-internet-shoppers-since-2009/
Hofer, C. (2020, April 23). Associate Professor. Risk Pooling. Fayetteville, Arkansas, USA: Sam M. Walton Business College, University of Arkansas.
How it Works. (2019, April 20). Retrieved from STOPWATCH: https://stopwatch.tech/how-it-works/