Why ERP integration is important for OTB management

Maintaining accurate inventory data across multiple sales channels is no longer just an operational concern, it’s a strategic imperative that directly impacts your bottom line. Nowhere is this more evident than in Open-to-Buy (OTB) management, where precision inventory data can mean the difference between optimised purchasing decisions and costly inventory imbalances.

What is Open-to-Buy (OTB)?

OTB management is an inventory planning and purchasing strategy used by retailers to determine the optimal amount of merchandise to buy during a specific period. It’s essentially a budget for inventory purchases, helping retailers balance having enough stock to meet customer demand with avoiding the risks and costs of overstocking.

The critical connection: Inventory accuracy

Before exploring the specific advantages of integration, it’s important to understand why real-time inventory visibility is the foundation of effective OTB management:

• Financial precision: Every cent in your OTB budget should be allocated based on actual need rather than perceived gaps.
• Buying confidence: Buyers make more strategic decisions when they trust their inventory data.
• Margin protection: Accurate stock levels prevent both stockouts and excessive markdowns.

How ERP integration transforms OTB management

Stock2Shop’s integration platform creates a seamless connection between your ERP system and various online sales channels, fundamentally enhancing your OTB processes in multiple ways.

1. Real-time inventory visibility across all channels

Stock2Shop eliminates the information lag that plagues traditional retail operations. When a sale occurs on any channel:

• Inventory is updated across all platforms within minutes
• OTB calculations reflect actual current positions
• Buyers can confidently allocate funds to genuine needs

This continuous data synchronisation means your team is always working with accurate information, preventing the common scenario where buyers make purchasing decisions based on outdated inventory reports.

2. Channel-specific OTB allocation

Not all sales channels perform equally for every product category. Stock2Shop’s integration enables:

• Differentiated OTB allocation based on channel performance metrics
• Strategic investment in high-performing channels
• Reduced inventory in underperforming channels

This granular approach allows merchandising teams to optimise OTB investments based on where products actually sell, rather than treating all channels equally.

3. Early identification of inventory imbalances

The integration provides early warning systems for inventory issues before they become OTB problems:

• Immediate visibility into slow-moving stock
• Channel-specific performance alerts
• Trend identification across the entire business

This proactive approach allows merchandising teams to take corrective action — such as cross-channel promotion or strategic discounting — before excess inventory requires substantial markdowns that impact OTB availability.

4. Enhanced seasonal transition management

One of the most challenging aspects of OTB management is navigating seasonal transitions. Stock2Shop’s real-time raising of orders gives your ERP the following:

• Clear visibility into end-of-season inventory positions
• Better planning for seasonal clearance timeframes
• More accurate OTB allocation for upcoming seasons

With comprehensive inventory data, buyers can confidently phase out current season merchandise while making precise OTB allocations for incoming seasons.

Streamlined vendor management

ERP integration improves vendor relationships and commitments by providing:

• Accurate purchase order forecasting
• Vendor performance tracking against OTB allocations
• Improved delivery scheduling

These enhancements help ensure that OTB funds are committed to reliable vendors and that deliveries align with actual inventory needs.

Real business outcomes

Our clients have experienced substantial improvements in their OTB management processes, including:

• Inventory reduction: 15-25% reduction in overall inventory levels while maintaining service levels.
• OTB efficiency: 12-18% improvement in OTB utilisation within the first year.
• Markdown prevention: 8-15% reduction in markdown rates through improved inventory visibility.

Implementation considerations

When considering the impact of Stock2Shop’s integration on your OTB management, keep in mind:

• Integration timeline: A typical implementation takes 4-8 weeks, with minimal disruption to operations.
• Team adaptation: Merchandising teams quickly adapt to having more reliable data for decision-making.
• ROI timeline: Most retailers achieve full ROI within 6-12 months.

The future of integrated OTB management

As retail continues to evolve, the connection between inventory accuracy and OTB management will only grow stronger. Forward-thinking retailers are already exploring:

• AI-powered inventory prediction for OTB planning
• Dynamic reallocation of OTB budgets based on real-time performance
• Integration of customer browsing patterns into inventory planning

Take the next step

Transforming your OTB management through improved inventory integration isn’t just about technology — it’s about empowering your merchandising team with the data they need to make optimal purchasing decisions.

By implementing Stock2Shop’s integration between your ERP and online sales channels, you’re not just improving operational efficiency; you’re creating a strategic advantage that directly impacts your bottom line.

Contact Stock2Shop to find out how Stock2Shop can revolutionise your approach to OTB management and inventory control.