1. Think of some aspects of inventory management discussed in this chapter (for example, inventory costs or cycle-stock patterns). How does online shopping affect them?

2. How is omnichannel shopping changing the way inventory is managed? How will modern inventory management systems make omnichannel selling easier?

3. Suppose you are working for a local drugstore developing an online shopping site. Think of some products you routinely sell, and apply the ABC classification system to them. How would the ABC classification help you in planning for online sales?

Online shoppers have high expectations. Shoppers expect more from online shopping than easy-to-use websites. Successful online retailers are creating online shopping experiences that encourage repeat customers and reward shopper loyalty. In 2013, UPS (United Parcel Service, Inc., Sandy Springs, GA) conducted a series of studies to gain insight about the shopping behavior of customers. The studies found that customers want to be able to shop anywhere at any time, and they want other services such as the flexibility to choose delivery dates and locations. There are several trends that affect shoppers’ delivery expectations:

1. Omnichannel fulfillment. Shoppers want an integrated buying experience across a firm’s multiple buying channels (its stores, website, and third-party retailers). According to the UPS study, 44% of online shoppers want the option to buy online and pick up the items at their local store. Another 62% said they wanted the ability to make purchases online and make in store returns. The study also found that of the shoppers who use the ship-to-store option, 38% of them purchased other items while in the store.

2. Delivery timeframes. Slow or delayed deliveries practices is one of the main reasons consumers do not shop online. Nearly half of online shoppers abandon their online carts before checking out when they find that the products they selected have long shipping times. Furthermore, very few potential customers are willing to pay higher prices for sameday delivery. On the other hand, when customers know how long it will take for their products to arrive, they are surprisingly patient with the retailer (for free shipping, they are willing to wait as long as 7 days for delivery).

3. Customized delivery. Ninety-seven percent of shoppers want order tracking services available so they can instantly determine the status of their order. Whether through e-mail alerts or by accessing the retailer’s website, customers demand updated information on the shipping and delivery dates for their orders.

4. Easy return policies. The number of people returning or exchanging orders has grown nearly every year since online shopping became commonplace. Customers expect that returning orders will be “painless” and easily accommodated by online retailers. It also pays off in terms of future sales, with 67% of consumers saying they will shop more often with a retailer if they offer a hassle-free returns policy.

Many of the expectations that online shoppers bring to the retail experience have implications for inventory management, suggesting that firms with fully integrated information and inventory control systems will be better prepared to compete for the growing ranks on online shoppers. Between the steps of  integrating upstream inventory, avoiding stock-outs, dealing with the expectations of immediate delivery, and ease of use, today’s online systems are critical sources of inventory management. Indeed, the organizations that are best at fully integrating with inventory systems will be best able to compete effectively for online shoppers’ business.