The merchandise left your distribution center at 6 AM. Your warehouse management system shows it delivered. Your store manager says the shelves are empty. Somewhere between the loading dock and the sales floor, inventory disappeared into a black hole of broken handoffs, miscommunication, and process gaps.
This is the last-mile inventory problem, and it costs retailers billions annually while frustrating customers and operations teams alike.
The global cost of inventory distortion reached $1.73 trillion in 2024, representing 6.5 percent of global retail sales. Much of this distortion happens not in warehouses or stores, but in the handoffs between them. Solving last-mile inventory issues in retail requires understanding why these breakdowns occur and what it takes to prevent them.
Last-mile inventory tracking sounds straightforward. Products move from warehouse to truck to store to shelf. In reality, this journey involves dozens of potential failure points, and most retail systems only capture a fraction of them.
At the warehouse, a picker pulls items from multiple locations, sometimes substituting when primary bins are empty. The system records what should have been picked, not necessarily what was. Loading crews consolidate shipments, occasionally mixing pallets when trucks run behind schedule. Drivers deliver to stores where receiving capacity varies by day and shift.
Research indicates that 58 percent of retail brands and direct-to-consumer manufacturers have below 80 percent inventory accuracy. For organizations in Australia and the USA, this figure climbs to 62 percent. The gap between what systems show and what actually exists widens with every handoff in the supply chain.
Store inventory accuracy faces unique challenges that warehouse systems were never designed to address. Merchandise arrives in mixed shipments that require sorting. Associates face competing priorities between stocking shelves and serving customers. Backroom space limitations force difficult decisions about what gets processed immediately versus what waits.
Gartner research shows that store-level inventory accuracy can fall as low as 60 percent. This is not a failure of technology or training. It is a structural problem created by systems that assume linear, predictable processes in environments that are anything but.
The gap between warehouse records and store reality creates phantom inventory: products that exist in systems but not on shelves. Customers search for items that theoretically should be available. Associates waste time looking for merchandise that may be in transit, in the backroom, or simply miscounted at the source.
Modern retail has transformed stores into fulfillment nodes, adding layers of complexity to an already challenging coordination problem. Buy online, pick up in store orders require real-time accuracy that traditional inventory systems struggle to provide. Ship-from-store capabilities demand knowing exactly what is available where.
Target reports that over 80 percent of their online orders are now fulfilled from store inventory. This omnichannel reality means that last-mile inventory tracking failures do not just affect in-store shoppers. They cascade into digital channels, creating disappointed customers across every touchpoint.
Research shows that retailers implementing omnichannel strategies experience a 30 percent increase in warehouse efficiency through better inventory tracking and optimized storage solutions. However, achieving this improvement requires visibility that spans the entire journey from warehouse to customer, not just isolated segments.
When warehouse systems and store systems operate as separate islands, the financial impact extends far beyond lost sales. Retailers with profit growth of 10 percent or more are investing 208 percent more in inventory visibility solutions than less profitable competitors. The correlation is clear: visibility drives profitability.
The majority of major U.S. retailers, about 67 percent, face daily or weekly relationship challenges with consumer brands due to inventory inaccuracy. These are not occasional inconveniences. They are ongoing operational failures that strain partnerships and erode trust across the supply chain.
The retailers achieving superior store inventory accuracy share a common approach: they treat the warehouse-to-store journey as a continuous workflow rather than a series of disconnected transactions. Every handoff triggers visibility updates. Every delay creates alerts. Every exception routes automatically to the person best positioned to resolve it.
Inventory allocation optimization tools can cut out-of-stock items by 50 percent. But technology alone is not enough. The organizations seeing the best results combine automated visibility with workflow orchestration that ensures human responses happen at the speed of retail operations.
Consider what happens when a store receives a shipment short. Without workflow automation, the receiving clerk notes the discrepancy, fills out a paper form, and waits for someone to investigate. The investigation involves comparing records across multiple systems, often manually. Resolution takes days. With proper automation, the same scenario triggers an immediate exception workflow. The supplier is notified. Replacement stock is allocated. Store replenishment adjusts automatically. Resolution happens in hours, not days.
Kissflow provides the workflow automation layer that unifies warehouse and store operations. The platform's no-code and low-code capabilities let operations teams build exception handling processes, shipment tracking workflows, and cross-location coordination without complex integration projects.
When inventory handoffs encounter problems, Kissflow routes exceptions to the right people immediately. Receiving discrepancies trigger supplier notifications. Backroom processing delays create store manager alerts. Replenishment gaps initiate automatic escalation to distribution teams. The entire warehouse-to-store journey becomes visible and manageable.
For retailers struggling with disconnected systems and fragmented visibility, Kissflow offers a path to solving last-mile inventory issues without replacing existing infrastructure. By orchestrating the workflows that connect systems and people, you can achieve the store inventory accuracy your customers expect and your business demands.
1. What is last-mile inventory in retail?
Last-mile inventory refers to the movement and visibility of products from the warehouse or distribution center to store shelves, where most inventory inaccuracies occur.
2. Why does inventory go missing between warehouse and store?
Inventory disappears due to broken handoffs, manual receiving processes, mixed shipments, delayed approvals, and lack of real-time coordination between warehouse and store systems.
3. Why don’t warehouse management systems prevent store inventory gaps?
Warehouse systems confirm dispatch and delivery but do not manage store-level execution, backroom processing, or shelf stocking workflows where discrepancies occur.
4. How does last-mile inventory impact omnichannel retail?
Inaccurate last-mile inventory leads to failed BOPIS, ship-from-store errors, canceled online orders, and lost customer trust across digital and physical channels.
5. What technology is needed to fix last-mile inventory issues?
Retailers need workflow automation that orchestrates exceptions, approvals, alerts, and system updates across warehouse, store, and supply chain teams.
6. How does Kissflow help improve last-mile inventory accuracy?
Kissflow connects warehouse and store operations by automating discrepancy handling, routing exceptions, escalating delays, and synchronizing updates across systems in real time.
Kissflow's no-code platform empowers teams to automate supply chain workflows without coding. This improves coordination across logistics and stores.
Inventory breakdowns often occur in the last mile between warehouse and store. Retail supply chain workflow automation ensures accountability end-to-end.
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