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Vice President of Sales and Business Development at Direct Tech, Inc.

Return on Inventory

By Joe Palzkill

About Joe

Joe is vice president of sales and business development at Direct Tech, Inc., a company which helps catalog and e-commerce retailers drive profitability, increase demand and optimize inventory investment by providing best-in-class applications and services. Joe is a member of Direct Tech’s seasoned management team, which has more than 150 years experience with demand planning, inventory optimization and merchandise planning in the multichannel retail industry. For more than two decades, Direct Tech’s applications and services have enabled leading multichannel brands to grow their businesses.

Joe is a 28-year veteran of the direct merchandising industry with hands-on experience in marketing, merchandising, inventory management and business development at multichannel retail companies including Lands’ End,, and Duluth Trading Company. At Direct Tech, Joe uses his experience to help customers and prospects understand how to improve sales and profits through applying industry best practices in merchandise planning and inventory management systems and processes.

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Observations From NRF


Retailers of all types — brick-and-mortar, internet, catalog and multichannel variations of the three — are facing the same inventory challenges, yet still view their issues from the bias of their primary channel.

I was reminded of this while attending the recent National Retail Federation (NRF) Convention. Marketers seem to be further along with embracing multichannel or omnichannel planning (we refer to it as "allchannel" at Direct Tech) than the operations side of retailing. Inventory planners, in particular, haven't fully embraced the new customer marketplace. 

Three observations that the Direct Tech contingent brought back from NRF seem to support this view:

1. The customer is now fully in charge. The goal then is to have the right inventory in the right location at the right price and at the right time so that consumers, acting in their own self-interest, will award us their business.

The idea that inventory optimization can help increase sales and pull in customers has finally taken hold, and it's not going away. As a result, inventory planners must find a way to address customer needs, marketers must support it and suppliers must enable it. That requires innovation and teamwork.

2. Channel walls, however, are still up. As much as retailers enjoy talking about their "omnichannel" businesses, the reality is that most are still fairly entrenched in the processes of their primary channel.

It's a different ballgame when your tablet-toting customer has dozens of other options at the touch of a keypad. The customer wants to purchase that item now, not tomorrow, and their device tells them in real time whether you have the item in stock. If you can't immediately fulfill the customer's request, the sale is probably lost.

So innovate. Be fluid. Adapt your inventory processes to cover all channels, not just your preferred way of doing business. Don't give the customer a reason to go elsewhere.

3. Optimizing sales and profits in a multichannel world is difficult, but doable. Multichannel is multichallenging. For inventory to contribute, its share will require complete inventory optimization not only by channel but also by location — right down to the individual stores, distribution centers and even supplier-held inventory.

It's a big job, but for inventory planners who are innovative enough to meet their customers’ needs, regardless of the channel the customer has chosen and the complexities involved in optimization, the rewards will be there.



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