Why Every Retailer Needs an Inventory Contingency Plan


What’s your contingency plan for inventory issues? Plan for inevitable challenges to deliver superior customer service.

In the modern retail landscape, inventory-related challenges are inevitable. However, issues like software synching delays, supply chain disruptions, backordered items, and buy online pick up in-store (BOPIS) errors still occur—and negatively impact customer experience. 

The way retailers choose to manage these challenges is critical. A poor customer experience can damage a brand, and retailers should never underestimate the power of an upset customer. 

While there are ways to reduce risk by improving inventory management strategies and systems, it’s impossible to prevent inventory issues from occurring entirely. Retailers must plan accordingly to ensure they maintain their customers’ trust and brand reputation. 

Considerations for Customer Service Contingency Plans 

At Sophelle, we take a “No Surprises Approach” to retail strategy. With respect to inventory management, that includes mitigating risk as well as developing contingency plans to manage inventory issues when they arise.

A contingency plan can ensure that the same policies go into effect across all locations and all representatives. It also helps protect your bottom line by providing solutions that work for your business model. Consider these three factors in your contingency plan: 

  • Brand identity. Your response to an inventory issue should reflect your brand’s tone and values, whether that means delivering an over-the-top customer experience or being relatively straightforward in your approach. 
  • Products and pricing. Consider your product line and pricing when developing your contingency strategy. Replacing a dented can at a grocery store is feasible; offering a free replacement for a luxury handbag probably isn’t. 
  • Customer relationship. You may decide to go to great lengths for long-time, loyal customers, whereas a customer with a history of returns and complaints might not need the same treatment. Note that you’ll need detailed information on customer history to personalize your response in this manner.
Best Practices to Improve Customer Experience

If you need a starting point for addressing inventory management issues as they arise, here are three best practices to improve customer experience: 

  1. 1. Be proactive and communicative

Proactive and consistent communication is imperative when addressing customer concerns. Customers value visibility and transparency, so leverage the insights available to you and tell them what you can about their problem and how you plan to solve it.

When customers have a choice in how an issue is resolved, such as how to deal with a backordered item, clearly communicate all available options. Let the customer choose the solution that works best for them when possible. 

  1. 2. Provide services as solutions

Use your omnichannel retail capabilities to offer services as solutions. For example, if a customer arrives to collect a product that isn’t available, make it a policy to find the item at another store and deliver it to them for free.

Remember to empower your store associates with a clear and consistent customer service policy. If they don’t all offer the same level of service to customers, savvy shoppers will learn to seek out the associates who tend to give them the “better deal.”

  1. 3. Incentivize with special offers

When you can afford to “buy the problem” with complementary products or discounts, that might be the most efficient and beneficial option for both retailer and customer. 

Your ability to offer deals and discounts will depend on your business model and product line, so calculate the cost of return to see what’s feasible. 

Modern retail strategy is about building strong customer relationships. To reduce friction and maintain the best possible shopping experience, brands need to continually work to mitigate risk and address issues around inventory management. 

Would you like help improving your inventory management systems and customer experience strategies? Get in touch with us, and a Sophelle Practice Leader will reach out to you within one business day.

Check out our previous post on inventory management here!