Online inventory management is so sensitive that many retailers won't publicly discuss it.
Lycos, CDNow and Eddie Bauer were among the companies that declined to comment on how they handle issues surrounding real-time inventory management. In some cases, retailers won't talk because they "haven't figured it out yet," said Elaine Rubin, chairman for Shop.org, an industry trade association. Others who have a working system don't want to reveal details because they see it as a key competitive edge.
Lands' End in Dodgeville, Wisconsin, one of the few retailers willing to comment, implemented real-time inventory on its site back in 1996. The clothing retailer launched Landsend.com in 1995, offering 100 items and no immediate inventory-checking system then, said Dwain Robb, Internet application development manager. Instead, the company set up an inventory file on its Web system and refreshed it daily, Robb said.
When a customer ordered on the Web, an e-mail would be sent to Dodgeville and printed out, and the information was entered manually into the main ordering system, Robb said. The system caused some customers to be disappointed, but it wasn't a "real common occurrence," he said. Real-time inventory checking was added the next year.
Orders are now sent straight to the main ordering system, which also receives orders from the Lands' End catalog, he said. In addition, Landsend.com updates the status of a product's availability whether a customer "clocks out in five minutes or two hours," Robb said.
Cyberian Outpost also has a real-time inventory on its legacy system but elects not to show to its customers, said Michael Starkenburg, chief technology officer at the Kent, Connecticut-based retailer. It doesn't show if items are in stock, Starkenburg said, because a customer may see an item and order it, but it could go out of stock before it can be shipped.
Instead, Cyberian addresses inventory in several different stages: overnight if it's in Cyberian's warehouse, two or three days if an item is from one of its distributors and four days if it's on back order and the customer needs to be notified by e-mail, he said. If any item has been discontinued, Cyberian won't post it, Starkenburg said. Customers are only charged when the product ships, he added.
The problem for online retailers is that most start out with a legacy processing system and stick a Web site on the front end, he said. If a retailer doesn't provide a good Internet service and instead just focuses on financial savings and not retaining shopper loyalty, "customers will go someplace else over time," Starkenburg said.
Online retailers moving to real-time inventory will see the benefits with customers, as well as internally, Robb said. Shoppers will receive products faster, and they know what colors and sizes are available to be shipped. Lands' End benefits as well, he noted: Customer service representatives are no longer tied up fielding questions about availability and out-of-stock orders.