Henning Sanders
Introduction
In our new series “Omnichannel challenges and solutions”, we explore common issues that retailers face on a daily basis. We explain their underlying causes and show how SAP’s cloud solutions can help address these challenges.
In this first article, we take a closer look at the topic of overselling.
What is overselling?
Overselling occurs when more products are sold than are actually available. For retailers, this means they must either cancel orders or first procure additional stock – both of which lead to delays and, inevitably, customer dissatisfaction. Accordingly, the takeaway is clear: overselling should be avoided at all costs, as it results in additional operational effort and can seriously damage customer trust.
How does overselling occur in retail?
Delays in inventory updates are one of the main causes of overselling. Retailers typically offer their products simultaneously across multiple sales channels – such as marketplaces, their own webshops, and physical stores. In most cases, available stock is not allocated to specific channels but instead offered everywhere at the same time.
This creates challenges when it comes to synchronising stock data. For example, if all webshops are notified that one last item is still available, and two customers add it to their carts at the same time in different shops, each shop initially assumes that it can sell this product. This means that if both customers complete their orders, a discrepancy arises in the ERP system – two orders but only one item in stock.
Overselling also often occurs when store stock is made available online. For example, a customer may already have the last available item in their shopping basket before the stock management system has the chance to register it in real time. What’s more, POS data is typically processed at regular intervals rather than continuously, which only adds to the problem.
Overselling should be avoided at all costs, as it results in additional operational effort and can seriously damage customer trust.
SAP OMSA – the solution
As mentioned earlier, the main cause of overselling lies in delays in stock management. To prevent this, a central system is needed – one that can be queried in real time by all sales channels before a sale is approved. If stock is depleted, customers can immediately be informed that the desired product is no longer available.
SAP’s answer to this challenge is the Industry Cloud solution Order Management for Sourcing and Availability (OMSA). SAP OMSA consolidates stock data centrally by collecting updates from all relevant stock management systems. Sales systems can then use API calls to check product availability and reserve stock immediately. Typically, the reservation takes place at the moment an item is added to the shopping cart. This means, for example, that as soon as Customer A adds an item to their cart, it becomes unavailable to Customer B – even if they only click a fraction of a second later.
Additional features – delivery times and OSTA integration
In addition, SAP OMSA makes it possible to determine and display delivery dates. These are calculated based on the product’s availability date and the expected delivery time to the end customer. The resulting date can be communicated directly on the product detail page, in the shopping cart, or even via email.
To compensate for time lags in POS sales, SAP also offers integration between SAP OSTA and SAP OMSA. Here, POS sales are reserved in real time within OMSA – even if the transaction in the ERP system has not yet been completed. This feature is especially valuable when planning to make in-store stock available for online sales.
Summary
SAP’s Order Management for Sourcing and Availability (OMSA) offers an effective solution to the problem of overselling. By managing stock data centrally across all sales channels, overselling can be avoided – provided that the reported stock levels are accurate.
Sound interesting? How about a demo?
Want to learn more about SAP OMSA? Get in touch with us today – we’d be happy to show you the solution live in our demo system.
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