Category: Retail Insights

The Detego Smart Shield is a cutting-edge feature that determines the location of individual RFID tags, by using machine learning algorithms. This allows the Detego Platform to differentiate between the backroom and sales floor of a store, without the need for expensive physical shielding installations.

It’s vital that a stocktake tells you not only exactly what is in a store, but where the items are too. The two locations that need differentiating in stores are typically the backroom and the salesfloor. Store staff, and the Detego platform itself, need to be able to see exactly what’s on the sales floor so they can identify when items and specific sizes are running low so they can be replenished from the backroom. If this isn’t done, you can end up with products in stock but not available to purchase on the shop floor – a costly and easily avoidable mistake.

RFID is able to read items from several feet away, and even through objects like boxes and walls – this is what makes it such an excellent technology for managing inventory. What this means, however, is that a staff member doing an RFID-based stocktake in the backroom could accidentally pick up signals from the sales floor, and therefore allocate items to the incorrect location.

The old solution to this problem involved using a physical shield that blocks RFID signals, often in the form of metal sheets or metallic paint. Making physical modifications to a store such as these is both expensive, costing up to $5000 per store, and time-consuming. When it comes to large scale rollouts of hundreds of stores, the added costs and manhours can be a major barrier to entry for RFID.

With the Detego platform, the need for physical shielding is removed entirely, significantly reducing the cost and time to implement RFID in stores. The Smart Shield feature is available out-of-the-box, meaning retailers can implement the cloud-hosted software in stores with very little fuss.  This is what makes the Detego platform the most ‘plug and play’ RFID software on the market.

Every RFID tag creates a specific time and signal stamp when being read by an RFID reader – up to several times per second. Detego collects this data (created during stocktakes) and applies machine learning algorithms to determine the most probable location of individual tags.

Managing the flow of merchandise in retail supply chains has always been a challenge.

Traditionally, the large quantities being dealt with meant that visibility of merchandise was poor. Items were tracked and accounted for in rough quantities, not consistently or accurately enough to hold suppliers and distribution centres accountable for mistakes and inaccuracies. This meant a fair amount of leakage, either of efficiency or directly in the form of physical shrinkage as items become ‘lost’, damaged or shipped incorrectly.

Fast forward to the present day, with advanced technology like RFID and the IoT, and the standard for retail supply chain management has changed. ‘Supply chain 4.0’ can effectively track and trace individual items from source to store, utilising RFID technology to track individual products and the Internet of Things to store and leverage this information on a digital platform or cloud.

The data and visibility provided by such digital supply chains are extremely valuable, allowing retailers to:

●Quantify the performance of the supply chain (visibility),

●Identify “the last known location of items” (accountability),

●Inspect the history of items and even raw materials (traceability).

Here are the 3 fundamentals of retail supply chain optimisation using item-level data:

Visibility

“To be able to see…”

Supply chain visibility is a growing priority for retailers. According to a report by Zebra Technologies, 72% of retailers are working on digitizing their supply chains in order to achieve real-time visibility. Knowing exactly what is in the pipeline allows retailers to control inventory more efficiently, improve operations between stores and DC’s as well as offer effective omnichannel services and delivery options.

However, the majority of supply chains don’t have anywhere near this level of visibility, as 62% of supply chains operate with a limited view over merchandise flow. This is because goods move along the supply chain in such large quantities, and most supply chains only account for cartons of items, rather than the items themselves.

For example, cartons of T-Shirts with quantities of around 50 are commonly sent out, but without RFID accounting for individual products, you can’t know if the quantities are correct. In other words, you are guessing what should be there as you do not have the visibility to know what is there. This may result in a store believing they have less or more products than they actually do. If however, they do identify the mistake, without visibility over the supply chain there is no way of knowing where the error occurred.

RFID technology can make every step along the supply chain visible while also providing a meaningful context, using digital ‘touchpoints’ to track items throughout their journey. RFID Tunnel installations can even automatically process these cartons, to identify shortages and surpluses all without opening the box. This way large inbound and outbound shipments can be processed quickly, accurately and down to the item-level.

Traceability

“To be able to verify the history…”

If supply chain visibility allows us to know where items are right now, traceability means being able to look back at where they have come from. As items are tracked through the supply chain with RFID, a record of all read events is stored on the cloud. Not only this, but the data from the product journey can be combined with similar data from materials used in each product. This information means retailers can not only see the last locations and events of items but they can also:

• Inspect their history (inception to sale)
• Change layers of abstraction (e.g., from item to carton)
• Go back to the source (materials sourced from cotton farms)

Having the ability to trace individual items back through the supply chain allows retailers to identify where shrinkage occurs and trace products back to the source in the case of a product recall. The traceability is also key as it involves keeping a permanent record of supply chain flow, not only does this mean valuable data, it also gives supply chain leaders the concrete evidence to hold suppliers accountable…

Accountability

“To be responsible…”

With digital track and trace technology in place, retailers will have access to the all-important last known location of items.

This means it is possible to identify where errors occur and hold supply chain and retail partners accountable. On the other hand, it can also serve as proof of service.

This information is also invaluable when it comes to brand protection. Not only can RFID technology easily identify counterfeit products but using the last known location of products allows retailers to identify how legitimate products end up on the grey-market. This is achieved by tracing them back to their last known location in the supply chain.

Knowledge of when and where an item was last seen/did not show up also dramatically speeds up clarification and accountability processes.

These 3 building blocks allow the extraction of KPIs and models to:

• Monitor shrinkage
• Identify grey imports
• Minimize counterfeits
• Automate re-ordering via dwell times and throughput
• Identify bottlenecks.

Looking to optimise your retail supply chain? The Detego platform is the end-to-end track and trace solution

Achieving complete supply chain transparency requires implementing an RFID system across your entire value chain, preserving detailed information about each RFID read event of each individual item (such as inbound verification, stocktake or sale). Thanks to that, knowing an item’s EPC (Electronic Product Code) number is enough to find out what, where and when happened to it. This capability is most useful when stores, distribution centres and factories are all integrated with one system – that system is Detego.

With efficient RFID processes from source-to-store, retailers not only gain new levels of accuracy and efficiency but achieve unprecedented transparency of the supply chain. Detego’s Global Track and Trace feature deliver the visibility, traceability and accountability to optimise retail supply chains for sustainable retail success.

Crisis and change

The relationship between crisis and change is well documented. History is full of innovations coming out of periods of extreme strife. From the collapse of feudalism after the black plague to the invention of the lightbulb during the long depression, even the technology you’re using now, the internet, was a product of the cold war. More recent examples in business (and less historically significant) include both Airbnb and Uber becoming popularised during the 2008 recession. While they both existed before the crisis that popularised them, it was due to a sudden change in customer priorities and needs, where they truly thrived.

Digital technology in a time of physical distancing

Few would argue that COVID-19 is not a global crisis on the same scale as those mentioned above, and great change will be affected by it. COVID is likely to be an engine for major change not only because of its major economic consequences but because of its social implications too.

Video conferencing application, Zoom, has seen an increase in new users of 30x year-over-year, as the platform has become a social tool as well as a business one during lockdown. Speaking of business tools, Microsoft’s team collaboration programme, teams, has had 12 million new users since COVID-19, as businesses get to grips with remote work. Even the physical world of exercise is being supported by digital technology, as applications such as Strava and Peloton have exploded in popularity.

All of these illustrate a major trend of the response to COVID-19 crisis, which has seen digital technology used to bridge the physical distance that is enforced on many worldwide.

Retail’s digital shift – accelerated  

To focus on retail, the story is the same, with there being both an economic and a social impact for brands to navigate. The financial impact of COVID-19 has been huge for retailers, with sales dropping by as much as 70%. This has left almost all brick-and-mortar retailers looking at negative cash flow as a result of closed stores. But even when they reopen, consumer confidence and low foot traffic will still be a concern. Brands will need to find ways to engage with their customers and serve their needs in new ways, as well as to adapt operating models to deal with the major financial strain.

The trend of people relying on and embracing digital channels during this crisis could not be truer in the retail industry. Since becoming the only sales channel available in many categories, eCommerce has soared during the pandemic, with increases of 25-80% depending on the country and industry. Whilst eCommerce is by no means ‘new’, the coronavirus has certainly accelerated its use and numbers are expected to remain higher than before even after the pandemic is over.

Leveraging physical stores in a digital world

This change presents some challenges for brick-and-mortar stores. Even though most brands will have seen an increase in their online sales, stores are still the backbone of retail. But with reduced foot traffic and increased competition from online, stores may need to adapt to stay competitive. Like many trends that have seen sudden surges in popularity during the crisis, the means to do this already exist, but they have suddenly become far more significant.

What are some examples of retail innovations likely to be accelerated by COVID-19?

Retail digital transformation

These developments are just one side of an ongoing digital transformation in retail, that is now more important than ever for retailers to get right. Retailers need the visibility, stock accuracy and item-level data to not only reliably serve customers across channels, but to reduce costs and improve business efficiencies in a challenging economic climate. Some retailers are ahead of the game in this regard and will more than likely absorb the impact of the crisis better than others.

Technologies like RFID, the IoT and advanced analytics modules are driving this digital transformation and creating more agile and resilient operating models. Whilst the current situation in retail is bleak, brands coming out of the other side are likely to be more resilient in the long term, as well as more accessible and seamless for customers across channels.

In-store fulfilment, also known as ship-from-store, is an Omnichannel retail strategy that essentially involves utilising retail stores as miniature distribution centres. This allows eCommerce orders to be fulfilled and shipped to customers from either the primary DC or a nearby store. Having multiple options for fulfilment available means retailers can take some pressure off DC’s and offer customers more stock and faster delivery by utilising nearby stores.

The use of in-store fulfilment and ‘mini DC’s’ has been steadily growing for years, due to both the continued growth of eCommerce as well as the inherent business benefits listed below. In the current climate of COVID-19, with stores closed and the immediate-future uncertain, leveraging closed stores as DC’s could potentially help alleviate the increased pressure on eCommerce operations and help brands achieve business continuity during this time. The practicality of this will vary between brands and even countries, but its possible a reduced small team of staff could run as an effective warehouse during the coming months.

• Takes some pressure off DC’s, meaning a brand can handle increasing eCommerce orders without needing to invest in additional DC’s
• Reduces shipping costs by moving distribution points closer to destination
• Increases delivery speed as orders are shipped from nearby stores
• Idle inventory that is sitting in stores can instead be sold through eCommerce – increases margins by preventing seasonal mark-downs.
• Ship-from-store is an effective and profitable way to prevent inventory stockpiling up at the wrong locations
• Retailers can offer customers more products i.e. not just inventory available at the DC
• Alternative ‘mini-DC’s’ offer fulfilment options if the primary DC is temporarily shut down or disrupted.
• Leverages staff during slow periods for stores or if stores are temporarily closed
• Offers more products/sizes to customers (see figure below)