In the era of retail marketing, everything under one roof seems to be the way forward. Walmart has crushed its opponents through its superior supply chain management. From toilet tissue to DVD, whatever you need, you go to Wal-Mart.
But if you stock-pile your inventory, you increase your cost and reduce your profitability. A recent study showed, that even by cutting inventory cost by 10%, book stores can increase its sale by 5%, provided they show the cover of the book, not the spines that they usually do when they have too much book in the stores.
So there are two distinct retail inventory strategies. When you are stock-piling your inventory, you are going into a pull strategy. Meaning, whenever the customer asks “Do you have….”, you gleefully answer that you do. Then of course is the push strategy, where you have limited inventory. And by having limited inventory you can give more attractive, spacious shelf space to each of your product so when the customer walks in, the products pre-sell themselves. Then he not necessarily has to ask “Do you have….”.
So there is always a trade-off. But by adopting any of the push or pull strategies, organized retail can win the war.