Sustainability is a buzzword in the fashion industry and has been for many years. As the world looks for ways to slow the extent of climate change, retail is an important beacon for change.
The Intergovernmental Panel on Climate Change’s (IPCC) most recent report makes for uncomfortable reading. The panel predicts that global warming will reach 1.5 degrees Celsius by the early 2030s, resulting in unprecedented ice melt, seawater rising, and extreme heatwaves. However, there is also hope that reducing emissions and global consumption could halt rising temperatures, enabling the world to meet the goals of the Paris Agreement.
One industry that requires urgent change is fashion retail. The fashion industry alone accounts for as much as 10% of global greenhouse gas emissions as well as 20% of wastewater. Additionally, 85% of the world’s textiles end their life in landfills or incinerators.
Many retailers are already doing what they can to make their operations more sustainable. This includes investing in sustainable materials as well as making physical stores more environmentally friendly. However, consumers are demanding more. This requires new innovations, and RFID for sustainable fashion retail could prove to be the solution.
Many retailers already understand the value offered by RFID in improving the efficiency of operations and omnichannel retailing, but are less aware of the applications of RFID for sustainable fashion retail. However, the technology is crucial if retailers are to make their supply chains more environmentally friendly.
The Emergence of Sustainability in Fashion Retail
Fashion retail sustainability is not a new trend, but it’s certainly true that the move towards more environmentally-friendly fashion has sped up in the last few years. This has been exacerbated both by consumer trends and the damning evidence coming out of research from organisations like the IPCC.
At the G7 summit in August 2020, 32 fashion companies pledged to make their businesses more sustainable. This includes cutting out the use of single-use plastic by 2030 and seeking out environmentally-friendly raw materials. Luxury fashion, meanwhile, is aiming for net-zero emissions by 2050.
In luxury fashion, Chloé is going further. In October 2021, they became the first luxury fashion brand to receive B-Corp certification, a testament to their commitment to the ‘triple bottom line’. With their latest footwear line, they used 58% lower-impact materials, compared to 40% for their autumn/winter 2021 collection.
It’s not just a desire to help the planet that is driving fashion retailers to commit to sustainability initiatives, though. Consumer behaviour is also changing. Today, 66% of people say sustainability is a key factor when they make a purchase. The figure is even higher for the younger, millennial age group, at 75%.
There’s even more evidence of how consumer demand is changing. The Sustainability and the Consumer Report from 2021 by Drapers examined how consumers in the UK are reacting to sustainable fashion retail.
The study found that, between January and July 2021, 64% of consumers had made a conscious decision to be more sustainable, and 54% of consumers chose to be more sustainable with their fashion retail choices specifically. Overall, one-quarter of consumers say they think about sustainability all the time when making purchasing decisions.
Changing consumer behaviour is evidently driving fashion to be more sustainable. In fact, 50% of C-suite executives in fashion and textiles say that consumer demand is affecting their approach to sustainability. For many brands, responding to consumer demands might mean establishing carbon offsetting or making biodegradable packaging. But committing to fashion retail sustainability will require more than this.
The Problem of the Supply Chain
Fashion supply chains are endlessly complex. Globalisation and cost pressures have ensured that few fashion brands actually have an end-to-end view of their entire supply chain. However, the key to fashion retail sustainability actually lies in the supply chain.
Retail brand Patagonia have stated that 95% of their total carbon emissions come from their supply chain. A staggering 86% of this figure is solely from the creation of the materials necessary for production. Overall, retail supply chain emissions are 28 times as high as operational emissions. However, emissions created in other areas of the supply chain–for example, getting products from production to stores–is not to be underestimated.
For retail brands, cutting emissions within their own operations–distinct from the process of creating raw materials–could deliver 20% of total reductions in carbon emissions. A more efficient approach to transport, retail, and packaging could deliver a saving of 308 million tonnes of CO2 by 2030.
Not only is there a consumer demand for change across the supply chain–and for companies to be able to articulate that change and take control of their entire operations–but there could be financial risks to not adapting. Companies will face up to $120 billion in costs from environmental risks in their supply chain by 2026 due to physical impacts like floods and the increased cost of raw materials due to climate change.
Aside from supply, there are other areas within fashion retailing that will require an overhaul to be more sustainable. One of these is reducing waste. While part of the responsibility for reducing waste lies with the consumer (12% of people aged 18-24 buy fashion once a week, and 11% say they bin clothing they don’t want anymore), fashion retailers can also do more on their side. For example, every season, about 30% of clothes that are made are never sold. Improved operations and logistics–and utilising data to understand consumer trends–could help reduce the amount of clothes that go unused.
Similarly, fashion retailers can invest in circular modes of production and selling, whereby clothes can be returned to a company at the end of their life. Drop-off boxes for recycling clothes are already a staple in some stores, and all go towards improving the sustainability of fashion retail.
While there are a number of ways retailers can improve their sustainability, many companies are simply not ready to make the changes. In order to reduce their environmental impact, companies should be embracing technological innovations such as enhanced data gathering, digitised supply chains, and RFID for retail.
Turning to Technology to Solve Sustainability Issues
Today, 95% of retail CEOs say they plan to increase their investment in digital solutions, evidence that the entire industry sees the value in digital innovation. And while technology has evidently contributed to more emissions by making clothes cheaper and faster to produce, technology like RFID for sustainable fashion retail can also be a way to solve many of the industry’s environmental problems.
One of the biggest problems in the retail supply chain is a lack of visibility. As consumers increasingly demand information on the sustainability of retail operations, retailers will need to turn to new ways of obtaining that data.
Not only does digitising of supply chains increase efficiency and transparency (both of which are important when reducing overall environmental impact), but it also offers retailers in-depth data into their supply chain. More data equals more accountability–it’s a way for retailers to show consumers that they are actively working towards sustainability in their operations.
Retailers that are concerned about the cost of introducing digital innovations in their supply chain needn’t worry. Research shows that around 90% of actions necessary to reduce overall environmental impact can be delivered for a cost below $50 per tonne of CO2. In the end, companies that work towards digitising their supply chains save up to 50% on their costs: and that’s not counting the drastic sustainability benefits.
Additionally, the cost of innovations like RFID for retail has been steadily falling over the last ten years to 80% of its original cost. This is crucial, as RFID could be the solution for sustainable fashion retail.
How RFID Can Benefit Sustainable Fashion Retail
RFID has huge benefits for retail. Not only can the technology support omnichannel retailing but also make supply chains more efficient and help improve the customer experience. Overall, retailers–especially in the fashion industry–are increasingly turning to RFID to solve retail problems.
93% of retailers in the US already use RFID, up from just 34% in 2014. Additionally, 22% of softlines retailers have plans to adopt RFID in order to support supply chain and analytics. Despite this, though, many are still unaware of the value of RFID for sustainable fashion retail.
When it comes to making fashion more sustainable, two things are vitally important: data and traceability. As we’ve explored, without end-to-end visibility, it’s impossible for retailers to understand the environmental risks in their supply chain. Furthermore, without data, retailers cannot be transparent and will lack the understanding to make changes to their supply chains to make them more sustainable.
The solution to both of these problems is RFID for retail. When retailers embrace RFID for sustainable fashion retail, they take the first step toward more environmentally-friendly business practices.
Reduce and Reuse Applications
With millions of items sent to landfill every year, retailers need to find a solution to the problem of retail waste. When RFID is used for sustainable fashion retail, it can help retailers find ways to reuse stock and reduce the raw materials required for creating products.
For example, RFID can show retailers which products are and aren’t selling in real-time, allowing retailers to make immediate decisions to improve sustainability. They could make adjustments to stock at the initial manufacturing stage, minimising their use of materials.
Additionally, RFID also has applications for sustainable fashion retail in promoting a circular fashion economy by allowing garments to be returned to retailers at the end of their life. RFID could allow reuse and recycling applications for old stock by tracking exactly where stock is and allowing for more accurate sorting of old stock in preparation for recycling.
Smart Inventory Management
Using RFID tags in retail results in a 25% improvement in inventory accuracy. With Detego’s end-to-end RFID software, retailers can achieve 99% total inventory accuracy. This is crucial for fashion retail sustainability, as more efficient inventory logistics means less waste along the supply chain and in stores.
With RFID for sustainable fashion retail, stores can trust that they are only ordering what they need, and they have the ability to quickly react to consumer trends, producing only what will eventually sell. This prevents overstocking and makes transportation more efficient.
Optimising Retail Space
We know that e-commerce is more sustainable than physical retailing. In fact, on average, shopping online emits three times less CO2 than visiting a real-life store. However, brick-and-mortar stores are clearly here to stay.
Research from Deloitte found that more consumers are embracing omnichannel shopping–a mix of physical and online–rather than solely e-commerce. In fact, 27% of online retail purchases are fulfilled at a physical location.
As the need for a mix of physical stores and online shopping becomes more apparent, retailers will have to think carefully about how to improve the sustainability of their stores. RFID for sustainable fashion retail offers a way to do this–by optimising retail space by only selling the items that are in demand at that particular time.
We already know that without end-to-end visibility, retailers cannot begin to create a sustainability strategy. The technology grants retailers full visibility of their operations, as stock makes its way from warehouses to distribution centres or stores.
By harnessing the data created by RFID tags, retailers can begin to publish information about their sustainability strategy. Not only will this inform future sustainability actions by letting retailers know which policies are performing, but it also lets consumers know that you’re taking action against climate change. As such, RFID for sustainable fashion retail has multiple benefits: it makes retailers more sustainable and improves customer interactions with your brand.
An RFID retail solution
Stock accuracy, on-floor availability, and RFID omnichannel applications in stores.
Book an RFID demo to find out how our cloud-hosted RFID for retail solution could help you improve your sustainable credentials. Our multi-user app can provide intelligent stock takes and a smart in-store replenishment process, making your retail strategy more sustainable. With RFID for sustainable fashion retail, you get end-to-end visibility of your supply chain, making it easier to make changes to be more environmentally friendly.
For retailers to remain competitive, it’s now imperative that they offer omnichannel services. This was undoubtedly true before the Covid-19 pandemic, but now that more consumers are looking for an alternative, digital ways to shop, it’s even more of a requirement.
According to research from McKinsey, more than one-third of consumers in America have turned to omnichannel services as a result of the pandemic. This includes services such as pick-up-from-store, return-to-store, and shopping on apps. The vast majority of these consumers will continue to take advantage of omnichannel services long after the pandemic has ceased to have an impact on retail.
However, an omnichannel strategy can be a challenge to get right. Though digital experiences are important – especially for younger consumers in the Generation Z and millennial categories – retailers shouldn’t discount the value of physical stores. A successful omnichannel strategy offers a seamless blend of both physical and digital experiences, giving customers the freedom to shop where and how they want to.
Technology is key to implementing an omnichannel strategy. Without analytical insights, it can be difficult to see where you should be diverting your energy. Though omnichannel trends, in general, apply to all retailers, you may have a unique experience with your customers meaning a different strategy is needed. Consequently, data is the only way to make informed decisions for your brand.
Tapping into digital transformation trends also makes it easier to build a unified experience for your customers. 64% of Generation Z consumers say they would switch to a competitor after multiple negative experiences with a brand. With more frequent touchpoints in omnichannel retailing, that means the probability of one of those channels disappointing customers is also higher.
Yet, today, 22% of retailers admit that they don’t have the right technology to implement omnichannel. A similar percentage of retailers say that they would benefit from more omnichannel technology. But what technology can provide this retail solution?
To be part of the digital transformation in retail, companies can turn to RFID. While businesses may already be aware of the power of RFID to support supply chain operations, they may not be as aware of RFID for omnichannel. As well as offering retailers a more accurate look at their stock, when used for omnichannel, RFID technology can also help unlock additional digital experiences for customers, so you can continue to offer consumers more innovative ways to buy.
Omnichannel Retailing Today
While the term ‘omnichannel’ has been around since 2010, it’s only gained traction as a trend over the last few years. This correlates with the growth of the Generation Z market and an increased reliance on digital services throughout the pandemic and beyond – the ‘digital transformation.’ While many retailers are aware that they should be offering omnichannel services, few implement a seamless and successful strategy.
One common misconception about omnichannel retailing is that it means a reliance on digital services. It’s certainly true that many omnichannel services focus on online shopping: apps, virtual try-on rooms, automated returns. However, this doesn’t mean the death of the physical store. Today, 88% of Gen Z consumers say they expect to connect with a brand on both physical and digital channels.
What omnichannel really means is a focus on ‘phygital’: physical and digital at the same time. And while consumers are certainly prioritising online services, many people still enjoy visiting physical retail locations. Over 50% of retail sales still happen in-store. Additionally, one survey revealed that up to 50% of customers would prefer to shop online from a brand that also operates physical stores.
In essence, omnichannel retailing means creating a seamless experience across the online and physical parts of your brand. Omnichannel services will allow your customers to browse for items on an app, check they’re in stock in-store, visit a store to try on or sample, and then return home to purchase. Every channel should be seamlessly connected, so customers never have to restart their purchasing journey when they switch to a different channel.
Another part of omnichannel retaining that is often underappreciated is brand consistency, which we explored in a recent article. Yes, retailers must ensure a seamless experience across touchpoints. But they should also ensure that their brand identity is unified across digital and physical channels. Businesses that prioritise brand consistency actually perform better than brands that have a more lukewarm approach to their branding.
So, a successful omnichannel retail solution should integrate all channels seamlessly while prioritising a consistent experience for customers. But why should omnichannel be a priority for retailers?
Why Should Retailers be Prioritising Omnichannel?
Retailers that implement omnichannel experiences see immediate benefits. Brands with a seamless omnichannel strategy report are three times more likely to increase their revenue, and four times more likely to have loyal customers. But why?
For starters, customers today are no longer shopping on just one channel. Research from McKinsey shows that the average customer engages with three to five channels before making their purchase. Similarly, 67% of customers use multiple channels to complete a transaction. These might include social media, an online store, an app, or a physical location. Omnichannel retailing taps into the digital transformation trend by offering customers exactly what they want: the ability to shop seamlessly online and offline at the same time.
Customers who prioritise a multi-channel buying experience are also far more likely to part with their money than single-channel customers. Omnichannel customers spend about 10% more online than those who only tend to browse through one channel. Additionally, these customers are more likely to stay loyal to brands. Brands that implement a successful omnichannel strategy retain 89% of their customers – compared to 33% for retailers with a weaker omnichannel strategy.
It’s clear, then, that customers want omnichannel services, and are prepared to spend more and stay with their chosen brand if these services are available. Retailers who neglect omnichannel are also much more likely to see a dip in revenue. Strikingly, 40% of consumers will actually choose a competitor if they can’t use their preferred channel for browsing or purchasing.
The Companies Getting Omnichannel Right
We’ve already examined the benefits of omnichannel retailing. But which retailers are getting it right?
Affordable luxury retailer BA&SH proved that the future is ‘phygital’ when they pressed ahead with a range of new store openings in the US and Asia. In 2018, they opened seven new physical locations in Mainland China and three in Hong Kong, all of which achieved profitability after just three months. To support their sales in Asia, they also launched the brand on Tmall at the same time, supporting e-commerce in the region.
It’s a similar story with Adidas, but on a larger scale. They have 2,500 retail stores across the globe, combined with a large e-commerce channel, including an app. The app reaches 30 countries in their market and offers unique omnichannel services including order tracking, personalised content, and in-app chat. Despite e-commerce being the channel they expect to grow most rapidly, Adidas still invests heavily in in-store experiences. For example, they launched flagship digital stores in London and Paris in 2019.
A brand hoping to compete with Adidas is Lululemon. They operated around 489 stores in Q1 of 2020, but grew this to 521 by the end of the year, despite pandemic losses in brick-and-mortar store footfall. This investment allowed Lululemon to capitalise on the pandemic growth in services such as store pickup and appointment shopping. Overall, the company generated a 47% increase in international business in Q4 of 2020, with e-commerce representing 52% of its total revenue.
As demonstrated by these thriving retailers, a successful omnichannel strategy is seamless, unified, and flexible. Each of these retailers was able to adapt to changes in physical footfall and the growth in e-commerce while growing their brands globally. To do this, they have tapped into digital transformation trends, including digital stores, online try-on, and diverse purchase and delivery options. In the case of Lululemon and Adidas, RFID for omnichannel also played a role in their success.
The Benefits of RFID for Omnichannel
As we’ve seen, the retailers who do hit upon omnichannel success embrace digital services without neglecting brick-and-mortar stores. The foundation of a winning omnichannel strategy is seamless integration, harnessing data, and fully optimised operations. By implementing RFID for omnichannel, retailers can hit each one of these factors for success.
We know that retailers are adopting RFID technology at a faster rate because of Covid-19. In fact, 46% of retailers say that it is a priority for them in responding to the pandemic. But well before the pandemic, retailers were realising that RFID could offer use cases for omnichannel and that it can add a huge amount of value to operations. This is especially true when retailers adopt RFID for multiple omnichannel services.
Retailers who use RFID alongside five or more omnichannel experiences see a 20% higher ROI than retailers who adopt RFID for less than four omnichannel services. When implemented, RFID can offer the real-time insights and accuracy necessary for retailers to scale up their omnichannel services.
Typical store inventory accuracy at item level is around 60%-80%. Unfortunately, much higher accuracy is needed if retailers want to enable multiple omnichannel experiences. Without real-time data, it can be challenging to know where stock is, and you’ll struggle to integrate omnichannel services like pick-up-from-store, app purchases, or shipping from a distribution centre.
RFID tags on stock can bring item-level stock accuracy levels to 99%. This means retailers have an exact view of where all their stock is, whether that’s in a warehouse or store. As a result, customers are able to know their chosen products are in stock at their chosen location and can opt for the method of delivery that suits them – whether that’s shipping to a store, collecting from a pick-up point, or delivery to home.
But there are more benefits for customers when retailers implement RFID for omnichannel. Tagging products allows customers to track purchases through their shipping journeys, meaning they can get more accurate delivery dates. This is often crucial if they have chosen to pick them up from a store, as they will know exactly when their items have arrived.
Overall, when implemented for omnichannel, RFID grants retailers valuable visibility into their supply chains and stock. With RFID, retailers can focus on creating new and innovative omnichannel services, with the knowledge that they will be able to create a seamless experience across channels.
Implementing RFID for Omnichannel Retailing
According to research from Coresight, 74% of retailers have already started implementing an omnichannel retail strategy. However, this doesn’t mean that these strategies are always successful. Just 34% of companies have a mature omnichannel strategy. Though many retailers will try omnichannel, there’s a big difference between creating a strategy and seeing it through to success.
As we’ve discovered, implementing RFID for omnichannel retail operations can make a huge difference to the success of omnichannel services. The real-time data created by RFID technology can help retailers to plan their omnichannel strategy, focusing on the channels that will bring the most value to their operations. Having a focused omnichannel strategy is vital for retailers that are just starting to experiment with alternative services, and using RFID for omnichannel implementation can help businesses create and implement a successful strategy.
Today, 28% of hardline retailers intend to use RFID to support their omnichannel fulfilment options. As RFID technology becomes more accessible – the cost of an RFID tag has already dropped considerably over the last 20 years – this number is set to increase. Omnichannel is an essential part of retail; to implement it successfully, RFID is the obvious retail solution.
An RFID retail solution
Stock accuracy, on-floor availability, and RFID omnichannel applications in stores.
Book a demo with RFID to find out how our cloud-hosted RFID solution could help you improve your omnichannel strategy. Our multi-user app can provide intelligent stock takes and a smart in-store replenishment process, while utilising RFID for omnichannel services can help you effectively manage your entire store and eCommerce operations with real-time, item-level inventory visibility and analytics.
The size and complexity of global supply chains, with their significant resources and risk-mitigation strategies among multiple partners, were previously thought to create significant security. The ongoing COVID-19 pandemic continues to show how wrong that assumption was. Global supply chains are vulnerable and will remain that way without significant planning. Retailers are still vulnerable to large-scale threats as well as regional issues like labour shortages and lockdowns.
For retailers looking to plan and protect their supply chains, it’s time to prioritize risk mitigation and thorough reviews. This article will look at five areas where planning and understanding must be improved for them to adapt to the realization that significant risk is lurking in its supply chain.
Enhance workforce planning
Supply chains are heavily dominated by human labor. People are present at multiple points for every single supply chain action. What COVID should remind supply chains is that every worker needs protection and training. But labor also involves many potential risks. You’ll need to work to keep people safe and understand and plan for times when people are out sick, whether individually or as a group.
Companies should have a plan for increased absenteeism and labor shortages. The post-COVID supply chain will still deal with COVID, the flu, and other seasonal health threats. No one is quite sure what that’ll look like, but experts across a wide range of industries say we should continue to expect increased health screenings and safety protocols.
This means you’re at greater risk of being impacted by regional outbreaks or clusters of illness. Look for robust tools that can help you tackle these concerns on multiple levels. RFID, for example, has applications that can improve your inventory accuracy and on-floor availability while reducing touchpoints and allowing staff and customers maintain proper distancing. Reducing manual tasks, such as inventory cycle counts, also helps protect you against risks related to labor shortages. RFID can even create upsell opportunities as it reinforces health best practices.
Build a plan to address productivity and support losses related to illness-absenteeism. At the same time, continually train teams on safety and health protocols, enhance your cleaning regimens, and turn COVID spacing requirements (and others relevant to your facilities) into more permanent policies.
Start with alternatives at the last mile
One of the biggest pushes companies see in this shifting landscape is the desire to diversify their supply chain. That’s simple to say, but one of the most complex undertakings you can do during a time of uncertainty. Sourcing new manufacturers and establishing relationships in other countries for changing ocean lines or shipping routes are complex. The existing backlog means any shift will take time to test, verify, and approve.
Companies can make a more immediate shift in their last-mile delivery, the final leg of a shipment from your warehouse or facility to the customer’s door. Increasing carrier access by moving to larger facilities and establishing relationships with regional carriers alongside national partners can help any brand build up resilience.
In many cases, this need is a strong enough reason to look at outsourcing fulfillment at any stage in a business’s development. Third-party logistics providers (3PLs) have many of these relationships already. Their higher volume also enables the 3PL to negotiate strong rates and deeper discounts, which they should pass onto customers. 3PLs like Red Stag Fulfillment, which specializes in specific product categories or attributes, can help niche and dedicated businesses make the most gains by pursuing the most relevant carrier discounts or those targeting product types.
Trace from end to end
The COVID-era supply chain struggled, often because of shifting supply and production capabilities, while demand largely grew. Manufacturing shutdowns, port delays, and other breaks in the chain had compounding effects. It was hard to understand how to adapt to any single element, let alone these larger issues.
Subsequent reviews of supply chains and risk mitigation studies have shown that, while many companies have expressed interest in chain visibility, most struggle to implement this. That cannot be the case for a viable post-COVID supply chain. It’s time for eCommerce sellers, manufacturers, wholesalers, carriers, and intermediaries to share data proactively. You can start this conversation by reaching out to learn what technologies your partners use and find areas of common ground or shareable data and file types. Tackle it from multiple perspectives including your customers, 80% of whom want to know real-time availability.
Thanks to current digital technology, end-to-end visibility is achievable, and we now clearly see its value. Align your investments toward information gathering and sharing to optimize other capital expenditures. Pursuing AI and analytics, 3D printing or additive manufacturing, improved conveyors, and other infrastructure technology first could create budget gaps that prevent the adoption of systems and communication strategies where you learn what’s happening at the manufacturing level and can understand its impact through the last mile.
Create an information-sharing plan if you want to be a preferred partner. Start the process by automating the delivery and sharing forecasts. When you detect a change or trend, share this up the chain to help partners better predict demand and strain, enabling them to allocate appropriate space when available.
Review inventory and available space
Supply chains are moving away from just-in-time inventory practices but there are struggles with what comes next. Instead of trying to define a completely new approach, look for adjustments you can make to take realistic steps for safety. For an inventory, that means balancing what you have in stock and preventing stockouts while not hoarding in a way that harms profitability or tying up too much capital. This requires you to get demand forecasts right.
Protect yourself by looking for periods of stockouts and pulling them from your demand forecasts. Run your analytics to plan based on demand when you were able to complete orders so that you’re not using low numbers. You might be able to double-check this work by looking at site traffic to sales pages — if it stayed consistent even when items were on backorder, then potential demand was steady.
After you’ve got forecasts that are correct for stockouts, look at the physical space you have available. How much can you fill? If you order more inventory than normal, do you have room for it? Balance that by determining how many additional costs you’ll incur for this holding. Higher inventory levels have higher labour costs, heating or cooling your facilities can change, you might use more equipment, and so on.
If you’re working with a 3PL, discuss their ability to scale and hold inventory. You want to be a reliable partner that they keep on. That requires you to strike a balance in terms of inventory, ensuring you can meet orders but understanding that long-term storage is causing issues for 3PLs and warehouse companies right now.
Create time to address systemic issues
Evidently, retailers are having difficulty attracting the best talent to retail positions. So, what can they do about this? In an article last year, we explored how technology can help improve the employee experience and thus retain employees. Employee experience technology can accomplish three major goals in retail talent management: increase productivity and goal accomplishment, improve employee agency at work, and help employees be more creative at work.
Perhaps the biggest supply chain takeaway from the COVID-19 pandemic is that many were built to withstand risks and threats in specific areas. When issues pushed beyond small-scale mitigation, supply chains started to buckle. Some faltered when overwhelmed across the entire chain while others had unrealized points of failure that only took light pressure to break.
Supply chain professionals and retailers need to start reviewing their operations systematically. Verify strength in each part and think about how that imparts reliability to the whole. Or see if areas with limited options are generating more significant risk. What many professionals once assumed were geographically limited threats have turned into global concerns.
Pandemic risks highlight systemic issues. Take the time to review what you’ve faced and where you’ve failed. Celebrate the parts of your supply chain that worked. Use those as guidelines for reviewing and improving gaps and potential. No one knows what the next black swan event will be, but we all now know that it has a chance to impact every aspect of our businesses and supply chains.
This guest article was written by Jake Rheud. He is the Vice President of Marketing for Red Stag Fulfillment, an eCommerce fulfilment warehouse that was born out of eCommerce. He has years of experience in eCommerce and business development.
Would you like to feature in our Retail insights section? Contact us today
It’s now been two years since the Covid-19 pandemic began to seriously disrupt business operations around the world. As a consequence, retail management has dealt with a range of problems including supply chain issues and store closures.
However, one additional problem that has been exacerbated by the pandemic is the ‘Great Resignation’. For the past two years, employees have left their jobs at an alarming rate – in the US alone, 4 million workers quit their jobs in July 2021. A survey of over 30,000 workers around the world found that 41% were considering quitting their jobs in the second half of 2021.
While the ‘Great Resignation’ has severely affected industries like healthcare and technology, the retail industry has not been immune. In August 2021, over 720,000 retail workers quit their jobs, second only to the foodservice and accommodation industry. As it stands, 96% of retailers say they are struggling to find store employees, and 88% said the same about hiring in distribution centres. In an industry that is still reacting to issues like supply chain disruption and wavering sales, this is a huge blow.
Ultimately, high employee turnaround is bad for business. There’s a clear correlation between happy employees, more satisfied customers, and higher sales; unhappy staff can result in the opposite. If retailers want to overcome the various issues that have plagued retail over the last two years, they need loyal, talented employees. But what is the solution to the retail talent management crisis?
Well, it could come in the form of retail inventory visibility software. Technology like RFID can have a huge impact on both the customer experience and an employee’s work, and retailers who implement this technology could find that it improves both their operations and their retail talent management.
The Great Resignation: How is it Affecting Retail?
Over the course of 2021, workers across a variety of industries have been driven to quit their jobs. Record quit rates have been recorded in sectors like healthcare, social assistance, and nondurable goods manufacturing. However, while these industries have seen resignations come in waves, in retail, a talent management problem has persisted throughout 2021. For most of the year, the quit rate has been higher than the 2019 average, and while it reached a peak in the summer, the resignation rate continues to be higher than normal.
Undoubtedly, retail workers have had to adapt to difficult working conditions over the past two years. They may have had to work longer hours as companies try to recuperate lost profits during periods of closure. At the same time, their work environment has changed drastically as retailers take into account local public health advice including the use of masks and implementing social distancing in stores.
As we look towards a more normal year for retail in 2022, companies need to understand the Great Resignation and what is driving retail employees to quit. Ultimately, the biggest cause of retail resignations is stress. According to one survey, 26% of retail workers considered leaving their job in 2021 because of mental health concerns, and 5% had already left the sector because of stress-related issues.
Considering the multitude of problems that retailers have had to adapt to over the past two years, this is no surprise. But it also shows that retailers need to do more to prioritise employee wellbeing if they are to overcome the Great Resignation and outperform in 2022.
What are Candidates Looking For?
In order to succeed at talent management in retail, companies also need to know what employees prioritise when looking for a new role. Without this information, it can be difficult to attract talent to your retail business; something that is already an issue.
In the US, 97% of retail brands say that they have experienced difficulty when hiring new store employees. In an industry where there is already a shortage of applications and a growing number of employees are leaving their retail roles, it’s crucial that retailers can target applicants with benefits and considerations that they actually want.
Firstly, we know that retail workers are now prioritising their mental health at work. 84% of retail employees have said that their mental health has deteriorated over the past year, and this is evidently contributing to high quit rates in the industry as well as a reluctance towards taking jobs in retail. If companies want to attract the best candidates for in-store roles, as well as in distribution centres, they need to show that they care about employee wellbeing.
Part of this means establishing trust between retail management and workers and showing employees like shop floor staff that they can approach their work independently. Some brands have gone further, though. Retailer Gymshark recruited an entire mental health support team to provide support to workers. Potential retail employees are also asking companies to invest in their wellbeing long-term. This includes offering additional training to improve skills and offer opportunities for growth within roles.
Elsewhere, future workers are also reimagining how productivity is actually calculated. For many workers, it’s no longer about traditional metrics like sales and performance. Instead, retail talent management teams need to foster work environments that prioritise employee value over performance – that is, how much value employees provide to businesses outside of their output.
How can Retailers Attract and Retain Talent?
Evidently, retailers are having difficulty attracting the best talent to retail positions. So, what can they do about this? In an article last year, we explored how technology can help improve the employee experience and thus retain employees. Employee experience technology can accomplish three major goals in retail talent management: increase productivity and goal accomplishment, improve employee agency at work, and help employees be more creative at work.
As a result of the difficulty in retail talent management, some brands are already making changes to their HR operations. For example, over 30% of retail companies have already implemented higher salaries in order to attract retail talent to their businesses. Amazon introduced immediate sign-on bonuses of £1,000 in order to attract talent, targeting warehouse workers specifically. Walmart, on the other hand, has started offering weekly bonuses to its employees, which could pay out upwards of $200 per week.
Retailers with brick-and-mortar stores are also introducing additional employee benefits in order to drive store hiring. This includes wellbeing benefits that seek to improve the mental health of employees. In recent years, John Lewis has adopted new HR policies such as six months of equal parenthood paid leave for all staff and two weeks of paid leave if staff members experience the loss of a pregnancy. Other benefits that retailers are increasingly offering include flexible work hours.
However, technology can also be utilised to help retain employees in retail. Studies show that staff increasingly want their employers to be invested in their work progress – 85% of people say that they want technology to help define their future. For example, 32% say that they want their employers to leverage technology in order to help them progress towards career goals.
One example of utilising technology to help support employees is with retail inventory visibility technology like RFID. Inventory visibility is crucial in retail – without a transparent view of stock, it’s difficult to implement omnichannel services or flexibly adapt to consumer behaviour. However, technology like RFID can also prove a valuable solution to retail talent management.
Empowering Employees Using RFID Technology
Not only is RFID technology a valuable inventory visibility solution in retail, but it can also help improve the employee experience and retain top talent. It’s important to note that the generation that are the latest big spenders, Generation Z, are also the generation that retailers will likely see applying to retail roles. Thus, they are not just retail consumers, they are also employees. With this in mind, technology like retail inventory visibility software can be a valuable way to hold onto these young employees and make them feel valued at work.
Firstly, owing to high digital literacy, this generation now expects processes to be digitised and automated, and may be less willing to persevere with outdated operations at work. One of these traditional operations in brick-and-mortar retail stores is physical inventory counts. This process, when performed manually, can require a huge amount of time and manpower. Repetitive procedures like manual stocktakes can also contribute to employee stress, especially if employees make errors, which is more likely with manual operations.RFID technology, on the other hand, can make manual stocktake a thing of the past and increase inventory accuracy to 99%. With RFID tags in each piece of stock, employees need only scan each product with a reader and can produce a full stocktake in around 30 minutes. This leaves employees feeling confident about their work and able to spend more time actually interacting with customers.
Improving Customer Experience
Similarly, customer experiences can also improve when retailers use inventory visibility software. As retailers recover from the effects of the pandemic, giving customers an optimal experience is more important than ever. Happy customers become loyal customers, and loyal customers lead to increased sales. 25% of customers switch brands more today than ever before, so attracting those who will keep returning is crucial.
Retail inventory visibility software, when used alongside an all-in-one mobile application, means employees can assist customers instantaneously with stock requests. In one survey, 42% of people said that ‘unhelpful staff’ was one of the main causes of a bad shopping experience, but businesses who take advantage of inventory visibility software in their retail operations can improve the chance of a better experience, as well as make employees feel confident at work.
Reducing Stress at Work
An all-in-one digital inventory visibility solution for retail can also reduce stresses on workers, leading to better productivity and reducing employee turnover. RFID technology can improve productivity and reduce the chance of stock delays and out-of-stock notices, leading to better interactions between employees and customers.
Retail inventory visibility software can also help managers make better staff decisions. With complete inventory transparency, it’s easier to see if there are going to be any supply chain issues. Instead of staff reacting to problems as they happen, which can cause undue stress if issues are completely unexpected, managers can plan for disruption. This can reduce the chance of staff working overtime or unexpectedly long hours and allow workers to focus on their day-to-day roles and the customer experience.
The Importance of Inventory Visibility for Retail
Aside from improving your retail talent management, there are many other reasons to consider investing in inventory visibility software for retail. Digitising processes like stock takes and making your inventory more transparent can have huge benefits to your business. These advantages can speed up operations, increase productivity, and improve the customer experience.
Additional benefits to implementing RFID technology include:
- Implementing efficient omnichannel services
- Increasing product availability
- Optimised supply chains
- Monitoring stock shrinkage
A fast fashion RFID solution
Stock accuracy, on-floor availability, and omnichannel applications in stores.
Book a demo with RFID to find out how our cloud-hosted RFID solution could help you improve your retail inventory visibility. Our multi-user app can provide intelligent stock takes and a smart in-store replenishment process and later, you can scale the solution to offer omnichannel services and effectively manage your entire store operations with real-time, item-level inventory visibility and analytics
At the foundation of fast fashion is reliance on speedy, effortless supply chains. Thanks to developments in technology, brands can now produce thousands of pieces of new clothing in very little time – Missguided, for example, releases almost 1,000 new products every month. Consumers are attracted to brands who can reinvent their catalogues instantaneously and they expect brands to provide them with the clothing they want as soon as possible.
Generation Z, the generation now coming of age and holding increasing disposable income, love fast fashion. Over 50% of Gen Z shoppers purchase from e-tailers like Asos, Pretty Little Thing, and Missguided. Low prices combined with ease of ordering and immediate satisfaction mean these brands are only gaining in popularity. Sales at fast-fashion retailer Boohoo soared over the Covid-19 pandemic, growing 41%. In total, Boohoo generated £124.7m in profits between February 2020 and February 2021.
However, fast fashion is not without its problems. Consumers want their clothing increasingly cheaper and faster, but future global supply chain problems could hinder this. Additionally, fast fashion retailers are now confronting the environmental impact of the market. According to data from McKinsey, fast fashion is now responsible for about 4% of all global carbon dioxide emissions. By 2023, the emissions from textile production alone could increase by 60%.
When faced with the problems within fast fashion – both in terms of sustainability and supply chain optimisation – it’s clear that a solution is needed, and quickly. One viable retail solution is RFID, which could potentially transform the fast-fashion world. But why is RFID for fast fashion such promising technology?
Making Fashion Fast
As opposed to the historic seasons within fashion, fast fashion focuses on rapidly producing new styles at a rate of about 52 ‘micro-seasons’ per year. In 2019, the amount of clothing produced by global fashion brands totalled about 53 million tons, but this was expected to rise to about 160 million tons by 2050. Zara was one of the first brands to trial new bi-weekly deliveries of fashion inventory, and since then consumers have wanted clothes even quicker. Now, fast fashion brands are required to keep hundreds of pieces of stock on hand – either in-store or in distribution centres – to satisfy the constant need for products.
Fast fashion can also attribute its growth to the internet. Retailers with physical stores may see items go unsold – H&M had over $4 billion worth of unsold fashion inventory in 2018 and Primark were sitting on £1.5 billion of clothes in their warehouses. The flexibility of e-tailers, though, means that as long as they can get stock through the supply chain quickly enough, they can adapt to consumer trends. In comparison to brick-and-mortar fast-fashion retailers, brands like Boohoo often order only a select amount of stock, to see if it will sell.
This flexibility within the business model paid dividends when the Covid-19 pandemic hit. While clothing sales overall dropped by about 34% in the early months of the pandemic, internet retailers like Boohoo turned a profit. At the beginning of 2020, Asos predicted that they would make £30 million more than in a regular year due to the pandemic shift to online shopping.
The Problems with Fast Fashion
However, the rapid growth of the fast fashion industry has also exposed the flaws in this market. From supply chain crises to environmental impact, fast fashion has its downsides. Firstly, the industry relies on global supply chains, which is much riskier than keeping production closer to brick-and-mortar stores. Retailers had to confront this problem first-hand in 2021 when a trapped container ship in the Suez Canal caused an estimated loss of $9.6bn goods every day.
While not a direct result of the Suez Canal crisis, shipping costs have also risen dramatically over the last two years. Where a shipping container ship used to cost $1,500, it can now reach $15,000. Similarly, shipping times are also longer because of the pandemic, meaning it can take up to 8 months for stock to reach Europe from Asia. This is compared to about five weeks for production based in Eastern Europe. Consequently, many retailers are choosing to forego global supply chains and low-cost manufacturing processes in Asia and “nearshore” their production closer to home.
Aside from supply chain disruption, fast fashion’s biggest problem relates to its environmental impact. While the fashion industry as a whole has its sustainability issues (it can take 10,000 litres of water to produce 1kg of cotton, for example), fast fashion is particularly problematic. The quick turnaround of fashion inventory in the fast fashion industry means more waste and the increased use of raw materials.
In total, 84% of all discarded clothing ends up in landfill sites; and while 95% of textiles could be recycled, the fast fashion model doesn’t encourage recycling or reworking. What clothing does get donated to second-hand clothing stores or thrift shops has a similarly doomed life – the United States exports over one billion pounds of used clothing every year, most of which gets sent to used clothing markets in Sub-Saharan Africa. Due to the sheer quantity of products, fast fashion also doesn’t have the supply chain transparency to accurately track where products have come from and where they end up.
The Environmental Impact of Fast Fashion: Consumer Reactions
But do shoppers really care if the fast fashion industry is unsustainable? Well, the answer is both yes and no. In 2020, retailer Boohoo was investigated after it was hit with allegations of exploitation related to its factory in Leicester. According to reports, workers in the factory were being paid just £3.50 an hour to make clothing. However, consumer reactions to the news were lukewarm. Despite the company’s reputation taking a sharp hit in the months after the report was released, over half of Gen Zs said they would still buy clothing from Boohoo-owned fast-fashion retailers.
On the whole, though, consumers are reacting to news of unethical and unsustainable practices. A McKinsey report reveals that 1 in 3 consumers have stopped buying from particular brands because of sustainability concerns. 40% of respondents also said that they have actively started buying from clothing companies with a good sustainability record. However, there were still limits to how sustainably consumers can or want to be. 46% of people said that additional information about the origin or sourcing of products would help them to be more sustainable, and 50% wanted more recycling options for used products.
15% of fashion industry executives say that sustainability is one of the top challenges for them in 2022. However, supply chain logistics are perceived as an even bigger threat to the industry, with 30% of respondents citing fashion inventory management or logistics as one of their top three concerns. Any future fast fashion retail solution will have to address the combined issues of supply chain disruption and sustainability – and implementing RFID in fast fashion could achieve this.
The Benefits of RFID for Fast Fashion
So, what’s the retail solution for fast fashion’s problems? Well, fast fashion retailers could turn to RFID to tackle both sustainability issues and problems in their supply chain. RFID in fast fashion is nothing new – Zara has already invested in digital tags in their supply chain network and full integration of RFID across their network was completed in 2020. However, the technology is rapidly decreasing in cost, meaning there’s a huge potential payoff for retailers who invest in fast fashion RFID technology today.
If fast fashion retailers are to prove that their products are from entirely sustainable sources, they will have to embrace transparency in their operations. Consumers now want to know where their products come from, and whether they can trust sustainable labels on clothing.
For fast fashion, RFID can be the retail solution to transparency. Only with accurate data and information about supply chains can retailers provide honest and open updates about their fashion inventory and ethics.
Fashion inventory visibility
Real-time visibility is important for any retailer, but even more so in the fast fashion industry. Only when you can track stock in real-time can you adapt to shortages and delays. RFID in fast fashion offers a way to accurately track stock through the supply chain, allowing retailers to make more accurate decisions and identify problems.
When fashion inventory is tagged at the point of production, its journey can be traced throughout the supply chain to a high degree of accuracy. It’s also possible to scan large amounts of stock at once, making the process straightforward and offering instantaneous data. RFID can also make supply chains more resilient by revealing weak points in operations. As a result, decisions affecting the supply chain can be made more quickly and with accurate data to back them up.
We know that consumers are asking for options regarding recycling initiatives and returns policies in order to make their clothing consumption more ethical. With customers increasingly turning to online ordering, the returns process has become more complex for stores, as they need to offer options to post from home or return to store. RFID in fast fashion solves this problem, letting retailers know exactly where a product is at all times.
RFID is also a way for retailers to embrace sustainable options like fashion rental. When RFID tags are implemented on all fashion inventory, it’s easy to implement returns and even categorise clothes for washing after they’ve been returned.
RFID in fast fashion can also boost a retailer’s overall sustainability by improving the accuracy of stock takes. Knowing exactly which items are selling and which aren’t means that retailers can adapt quickly to consumer demand, and only order what will sell. There is a huge problem with inventory loss in the fashion world, but this can be solved with accurate data. With RFID, fast-fashion retailers can only order the inventory they need and be assured that they won’t run into out of stock notices because of the technology’s accuracy.
The Future of RFID in Fast Fashion
There’s no doubt that, despite its drawbacks, fast fashion will continue to be popular, especially among younger generations who often are blind to the environmental impact of the fashion market. Many fast fashion brands are already making changes to their business models in reaction to issues like sustainability. Inditex, which owns Zara, Bershka, and Pull&Bear, has said that 100% of their cotton, linen, and polyester will be from sustainable sources by 2025. H&M is vowing to improve the percentage of sustainable or recycled materials they use from 57% to 100% by 2030.
While these initiatives will undoubtedly make brands more sustainable, they are also complex and high-cost. If brands are looking for a low-cost, high-return way to boost their ethics and improve their reputation, RFID in fast fashion is an ideal retail solution.
A fast fashion RFID solution
Stock accuracy, on-floor availability, and omnichannel applications in stores.
Book a demo with Detego to find out how our cloud-hosted RFID retail solution could help you optimise your approach to fast fashion inventory. Our multi-user app can provide intelligent stock takes and a smart in-store replenishment process and later, you can scale the solution to offer omnichannel services and effectively manage your entire store operations with real-time, item-level inventory visibility and analytics.
The past two years have been undeniably difficult for retailers. From reduced footfall in physical stores to grappling with staff shortages, there have been few advantages, and many long-term effects, to the recent disruption. The same is true for supply chain issues that have beleaguered retailers over recent years. Businesses have had to adapt to problems including shipping delays, higher delivery costs, and fluctuating consumer demands, and though we’re seeing the first signs of economic recovery, these issues won’t disappear overnight. Some analysts have predicted that it could take until mid-2024 for supply chains to return to relative normal.
So far, retailers have been forced to react to supply chain disruption as it happens, flexibly accommodating their business operations to the issues. However, there are ways for retailers to turn supply chain issues to their advantage, and the solution involves retail inventory management software.
Most businesses will already have some form of retail inventory management process; it’s a crucial part of omnichannel retailing, for example. But technology like RFID combined with powerful inventory software can offer a way for retailers to not only adapt to supply chain disruption but conquer it.
The Current Supply Chain Issues
The fallout from the Covid-19 pandemic is still being felt in global supply chains. While retailers have weathered the worst of the storm with regard to inventory delays, there are still challenges in the global supply chain that will inevitably take time to remedy. In fact, 94% of Fortune 1000 companies are still experiencing supply chain disruptions as a result of the pandemic.
One of these major challenges is the cost of shipping. Global shipping costs spiralled in 2021, reaching a peak in the latter half of the year. In October, the average cost of shipping a standard 40ft container reached $10,000. Costs have since declined by 16%, but are still higher than in normal years – in some cases by more than four times the average. In 2019, the cost of shipping a container from Shanghai to New York was $2,500, but this has since risen to $15,000.
As well as increased costs to ship inventory from manufacturer to store, retailers also have to adapt to delays in shipping. The global supply chain is still adapting to Covid-19 setbacks, resulting in persistent delivery delays. At present, there are 20 million containers waiting at ports all over the world, and this backlog will take more than a few months to resolve. While the scale of the issue doesn’t compare to early 2021 – when supply chain delays and shortages were up 638% – many businesses will still be experiencing shortages or delays well into 2022.
Finally, there has been a shift towards more environmentally-friendly practices in a wide variety of industries. Companies are also looking at ways to make their supply chains and logistics more sustainable. This includes switching to more sustainable shipping options like biofuel instead of diesel, eco-driving, or moving operations closer to customers. However, a move towards sustainable operations is challenging and requires coordinating entire supply chain operations and more complex retail inventory management.
Outperforming During Disruptions
Despite ongoing supply chain troubles, some retailers have done more than just endure the issues – they have thrived on the disruption. Brands like Walmart, M&S, and Pets at Home have all posted strong growth over 2021, despite grappling with intense supply chain disruption. The one thing these brands have in common? Omnichannel retail.
Over the last two years, consumers have switched from in-store shopping to online shopping. There was a pronounced switch to online retailing in 2020, which then persisted throughout 2021. In the UK, online sales made up 30% of overall retail spending in 2021. While still less than a third of overall spending, this is a jump from the 11% of sales that were conducted online in 2019.
However, for many retailers, it wasn’t simply a question of turning attention to online sales. Instead, an omnichannel solution that combined in-store shopping and online options proved the most effective option. Nike, for example, continued with plans to open a flagship store in Paris during the pandemic. Instead of floundering as footfall in brick-and-mortar stores fell, they found that the physical store also helped drive online sales. Retailers who open a new physical location can see a 37% increase in traffic to their website in the following quarter.
For some companies, it was a question of evaluating their supply chains and seeing where they could improve. Sports brand SylvanSport ran into issues when their overseas tire manufacturer couldn’t deliver on time, so they had to look at alternatives. This included seeking domestic manufacturers to create the product for them while still retaining their overseas manufacturer for future orders. This flexibility within their supply chain allowed them to easily adapt to any issues as well as future-proof their operations in case of further disruption.
How to Adapt to Disruption
It’s clear that supply chain challenges aren’t going away anytime soon. Consequently, retailers must plan for periods of disruption and find a way to come out of them performing stronger. For a start, we know that retailers who have outperformed during the last two years have focused on a few things: omnichannel solutions, consumer trends, and real-time data.
Data is a powerful tool when it comes to adapting to supply chain disruption, but many retailers aren’t taking advantage. In fact, 54% of company executives have said they don’t have clear visibility of their supply chain past Tier 1, and an additional 40% of companies don’t have accurate end-to-end visibility and reporting. This means that any disruption in the early stages of their operations will go unseen, and the consequences felt only when it’s too late.
However, companies are learning that technology like retail inventory management software is a powerful way to improve their operations – 89% of retail organisations said they will need to implement data management software in their supply chain.
Companies that do turn to AI-powered data solutions inevitably become more resilient. Having a clear understanding of supply chains, and their weaknesses in them can make companies more able to adapt to difficulty when it arises. When Japan was hit by a magnitude-9 earthquake in 2011, production at Toyota’s factories ceased for two months. After this, they focused on building an accurate database of their suppliers and parts to track their operations and products through the supply chain. In 2016 and 2019, when more earthquakes hit Japan, Toyota had reduced their production stoppages to just two weeks.
We also know that omnichannel services are the way forward for modern retailers. Consumers are asking for alternative ways of purchasing products, and omnichannel retailing also paves the way for future technology like AI-powered brick-and-mortar stores and virtual shoppers.
Since the beginning of the pandemic, one-third of American shoppers have taken advantage of omnichannel services including deliver-to-store, and two-thirds of those shoppers plan to continue taking advantage of omnichannel retailing in the future. As the previous example from Nike demonstrates, it’s not about turning 100% to online services, but about offering multiple opportunities for consumers to purchase products.
According to a study from McKinsey, brick-and-mortar retailers – though at a disadvantage over the last two years due to a decrease in footfall – still have to spend comparatively less on advertising in order to reach the same amount of customers as online retailers. So, it’s about developing an approach to omnichannel that blends online and physical retailing, allowing customers to purchase exactly when and how they want.
The final way retailers can increase the resilience of their operations and their supply chains is by paying close attention to changes in consumer behaviour. Arguably the biggest consumer trend for 2022 is a shift towards sustainability. In 2021, one in three consumers stopped buying certain brands because of sustainability or ethical concerns, and 46% of consumers wanted additional information over the origin of their products. To retain consumers in the coming years, it’s crucial that brands consider the environmental impact of their supply chains and make the necessary changes before customers choose alternative products.
The Benefits of Retail Inventory Management Software
We’ve identified three ways to turn supply chain disruption to your advantage: developing an omnichannel strategy, harnessing the power of digital insights, and staying aware of consumer trends. For all of these strategies, it’s crucial that companies dedicate some time to reviewing their retail inventory management system. Without a successful system in place to track and count inventory, you won’t be able to implement omnichannel services or make changes to your supply chain in reaction to consumer trends.
In order to accurately track inventory and respond to supply chain disruption, companies should consider investing in retail inventory management software. An all-in-one retail inventory management software, with the help of RFID tags in your supply chain, can provide businesses with real-time insights and inventory flexibility to increase supply chain resilience.
An all-in-one retail inventory management software offers retailers real-time insights that can transform operations. While digitising your entire supply chain might seem like a mammoth task, RFID supply chain technology is becoming more accessible and easy to implement.
In particular, the ability to monitor supply chains at all times, and receive real-time data from supply chains, makes it easier to make operations decisions fast. When the container ship, the Ever Given blocked the Suez Canal last year, 15% of the world’s freight was impacted. Implementing solutions quickly became of the utmost importance – only companies who had immediate insights into the effect of the crisis on their operations could make decisions to avert supply chain disasters.
Retailers that had already implemented a retail inventory management solution could immediately make decisions to shock-proof their operations from the disaster and recover more quickly.
Supply Chain Visibility
In order to adapt to disruption, it’s important that businesses have a clear, end-to-end view of their operations. However, many businesses currently don’t have the level of supply chain visibility necessary to quickly adapt to disruption. Retail inventory management software, when paired with RFID tags in the supply chain, can give businesses the visibility they require to outperform.
Only with a clear view of the supply chain from manufacturer to store can businesses accurately see where their stock is and react to shipping errors or delays. This is even more crucial as businesses turn to omnichannel experiences to boost sales, where it’s crucial to see where stock is and ensure that other services like ship-to-store or store pick-up can happen successfully.
Not only does retail inventory management software offer businesses end-to-end insights into their operations, but it can also help with sustainability efforts by enabling operations to be fully transparent to consumers.
More Accurate Inventory Counts
Implementing RFID in your supply chain can also make it easier to get accurate inventory counts. When there’s a disruption to inventory deliveries, knowing exactly what stock you have can make a big difference to your sales and allow store changes to be made swiftly. When used alongside a retail inventory management platform, RFID tags can help achieve 99% stock accuracy.
RFID technology enables retailers to quickly see which stock may incur delays and prepare for potential out of stock notices. For example, Reiss increased their sales by 4% by increasing their stock accuracy as they had an accurate view of exactly what stock was available and where. This makes it easier to implement omnichannel strategies like buy-online-pick-up-in-store (BOPIS). With accurate stock counts, it’s also easier for retailers to quickly adapt to consumer trends, focusing their attention on only the stock that is selling well.
Retail inventory management solution
Stock accuracy, on-floor availability, and omnichannel applications in stores.
Book a demo with Detego to find out how our cloud-hosted retail inventory management solution could help you outperform competitors and adapt to supply chain disruption. Our multi-user app can provide intelligent stock takes and a smart in-store replenishment process and later, you can scale the solution to offer omnichannel services and effectively manage your entire store operations with real-time, item-level inventory visibility and analytics.
NFTs, or non-fungible tokens, are the current talk of the art world. Though they’ve existed since 2014, the popularity of NFTs rose rapidly in 2021, with trading hitting $10.7 billion in the third quarter of that year.
NFTs can be anything – art, memes, and even newspaper articles or tweets. They are stored on a blockchain, the database that cryptocurrency relies on. However, unlike crypto, NFTs cannot be exchanged with another digital asset – each NFT is entirely unique. Each NFT that is sold has no equivalent, and blockchain technology is used to establish sole ownership and digital provenance. These digital assets can be resold on specialised online marketplaces, making them a lucrative investment opportunity. In the world of NFTs, anything can be monetised and sold, which is also part of their appeal.
Their popularity can be explained by the fact that they are simultaneously exclusive and are becoming more affordable. Individual NFTs are highly unique but theoretically anyone with an internet connection – and enough capital – can access the world of collective NFTs.
More recently, the world of retail is seeing value in NFTs. While some NFT sales have made headlines for their expense, the majority of NFT purchases in the first 10 months of 2021 were valued at less than $10,000. This means they can be categorised as ‘retail’ in nature. In the second half of 2021, brands including Adidas and BoohooMAN created their own NFT collections, hoping that they could capitalise on the technology’s popularity. High fashion brands are also trying their hand at NFT collections, including Dolce & Gabbana.
Is there a future in NFTs for retailers? That depends in part on your brand and target market. According to a survey from Morning Report, 15% of male respondents said they collected NFTs, compared to only 4% of female respondents. For high fashion brands, who more often than not have a female consumer base, NFTs can be a way of driving sales from male consumers. Alternatively, if your brand already markets predominantly to men, NFTs are a lucrative way of increasing revenue.
Based on the growth of NFTs in the latter half of 2021, it’s clear that NFTs will continue to increase in popularity. The most expensive NFT in 2021 was sold for $69.3 million in March, and while NFTs for retailers are unlikely to market for the same extraordinary prices, it’s evidence of the profit that can be created with NFTs. The entire NFT market is expected to grow to $240 billion by 2030, and NFTs for retailers could offer brands a lucrative opportunity to enter the burgeoning digital asset market.
A New Market in NFTs for Retailers
The NFT market has grown from a niche area for technology and crypto enthusiasts to something more accessible to the average consumer. At the same time, over the course of 2021, the average transaction size and the total value of NFTs increased. By October 2021, collector-sized transactions of between $10,000 and $100,000 accounted for 19% of all NFT transactions, compared to 6% in March 2021. This suggests that NFT assets are gaining value rapidly and that collectors and consumers aren’t put off by high price tags.
Despite the growth in large NFT transactions, the majority of purchases are still conducted at retail level – that is, with transactions of less than $10,000. In comparison to the crypto market, NFT purchases are still driven by retail purchases, not collectors or larger institutional transactions of over $100,000. In 2021, 80% of NFT purchases were made by retail buyers, despite the growth in those high-value collectors and institutional transactions. For this reason, the market for NFTs for retailers is promising – it could prove to be a major retail innovation in the next five to ten years.
Additionally, the audience for NFTs for retailers is already there. Millennials are the most likely generation to engage in NFT purchasing, with 42% of millennial respondents to one survey saying they do collect NFTs. They are followed by Generation Xers, of whom 37% say they are collectors.
Despite Generation Z occupying a strong part of the retail market, they are one of the generations least likely to be involved in NFT collecting or retail purchasing, beaten only by baby boomers. Just 4% of Gen Zers said they collect NFTs, because of limited purchasing power or a lack of interest in collecting digital assets as a hobby. Despite Gen Z’s current reluctance to get involved in NFT purchasing, there is interest there. One study found that despite such a small proportion of Gen Zs currently purchasing NFTs, close to 30% say they are interested in purchasing in the future. Of those who said they were uninterested, 57% claimed the reason was because of a lack of understanding. As blockchain and crypto become more mainstream technologies, understanding will inevitably grow, making Gen Z another promising market for retailers involved in the technology.
Retailers are Already Taking Advantage of NFTs
The first instance of a fashion brand embracing NFTs for retailers was when fashion house The Fabricant sold a digital dress for £7,500 in 2019. Since then, more retailers have turned to NFTs to expand their brand awareness or explore a new avenue of profit. According to the Vogue Business Index, 17% of fashion brands have already worked with NFTs.
Last year, Adidas took their first foray into the world of digital art. Their debut collection Into the Metaverse consisted of 30,000 NFTs, each of which gives the buyer exclusive access to physical merchandise that will become available in the future. The NFTs sold out within hours and Adidas earned approximately $22 million in sales. The retailer has since stated their intention to bring out more NFTs in the future, and with the success of their first collection, future profit is almost guaranteed.
They’re not the only brand to consider NFTs for retailers the future of retail. In late 2021, BoohooMAN became one of the first major fast-fashion retailers to branch out into NFTs. However, unlike Adidas, BoohooMAN is planning on giving their NFTs away for free to eight lucky winners. This fundamental change – from NFTs as a revenue stream to a marketing tactic – is evidence that BoohooMAN sees more than just monetary value in digital assets.
Retailers and the Metaverse
Here lies another advantage to engaging in NFTs – increasing brand recognition. At the end of last year, we explored why brand consistency is so important for retailers. With the rapid increase in omnichannel retailing, it’s more important than ever that retailers ensure consistent brand identity across all channels. As another marketing channel, NFTs for retailers can be a powerful way to increase brand awareness and add another facet to your brand identity. This is especially true as we start to see digital spaces like the metaverse becoming more common.
The metaverse is destined to be a 3D version of the internet where users can interact in real-time with others in a realistic virtual space. There are numerous applications for retailers here, including virtual stores where users can shop for virtual goods like NFTs using cryptocurrency. The brand opportunities present in NFTs for retailers are staggering – with so many people potentially entering the metaverse with avatars, there’s a chance for retailers to sell their products and gain much larger visibility across the globe. Despite being a relatively new retail innovation, the metaverse promises to change how customers shop and could be a key part of the future of retail.
Retailer ASICS has already taken one step towards the metaverse, with plans to develop a digital store where consumers can interact with the brand’s products. Luxury retailers are also exploring the possibilities the metaverse can offer. Last year, Burberry launched an online game that users can access by purchasing an NFT. In the game, they can interact with the brand’s identity and products, and purchase virtual accessories like jetpacks, armbands, and pool shoes. With retailers already considering ways to become digital-first, the metaverse offers opportunities for building brand identity, and revenue, outside of physical stores, and NFTs for retailers is a huge part of this.
Are NFTs The Future of Retail?
McKinsey’s State of Fashion 2022 report concluded that NFTs are likely to become part of the mainstream for retailers this year. With the rapid growth of the market and the branding and profit opportunities afforded by the sale of digital assets, it’s clear they will become a staple in the future of retail. In fact, the luxury NFT market is expected to grow to $56 billion by 2030, and while luxury NFTs will still comprise a small proportion of the overall market, this retail innovation will see increased demand because of the metaverse.
When considering if NFTs for retailers represent the future of retail, it’s also worth considering the as-yet undeveloped applications of the technology. Retailers may find that embracing the technology now could offer unforeseen advantages in the future as blockchain and NFTs for retailers become more widespread. As the technology becomes more accessible, it will also be easier for brands to explore opportunities within NFTs.
Though the market for NFTs for retailers is likely to grow, retailers should be aware of the potential implications of embracing NFTs. We already know that the retail industry is committed to becoming more sustainable. 14% of respondents to McKinsey’s State of Fashion 2022 said that sustainability would prove the biggest challenge for the fashion industry, while 12% regarded sustainability as an opportunity. NFTs, though, present a major sustainability problem.
NFTs rely on the cryptocurrency Ethereum, which in turn relies on huge amounts of electricity to keep transactions going. To establish digital provenance and security in the blockchain, “miners” solve cryptography problems with high-power computers. In doing so, they draw a huge amount of power from the grid – Ethereum’s total annual carbon footprint is estimated to be the same as that of Hungary. The future of retail may well lie in the metaverse and NFTs. However, brands will have to think carefully about whether embracing NFTs for retailers may contradict their sustainability goals and negatively impact their brand reputation.
NFTs for Retailers and RFID
Beyond investing in collectible NFTs, an additional advantage of blockchain technology that often goes under the radar is that retailers can use it to establish product authenticity. Globally, the counterfeiting industry is valued at $500 billion a year, with luxury retailers particularly vulnerable. In the future, NFTs for retailers might be used to establish product authenticity and supply chain transparency, combating common problems in the retail industry like counterfeiting.
Existing technology like RFID can be harnessed alongside blockchain to provide customers with additional information about their products. “Product passports” will support authentication by offering information about products and their provenance through virtual tags. Chanel are already utilising this technology, replacing physical tags in their luxury handbags with a digital passport through a scannable metal plate.
With the global adoption of RFID technology on the rise, it’s likely that we’ll see more collaborations with RFID and NFTs for retailers in the future. Whether NFTs will become a mainstay in the future of retail remains to be seen, as many consumers are still in the dark about the technology. However, there’s no doubt that it’s a retail innovation that offers opportunities for increased revenue, brand visibility, and security.
Cloud-hosted RFID software
Stock accuracy, on-floor availability, and omnichannel applications in stores.
Explore how Detego’s all-in-one cloud-hosted RFID retail innovation could help you increase revenue. Our user-friendly software enables you to keep accurate stock counts, improving the efficiency of your omnichannel services and boosting revenue. Click the link below to book a demo.
It’s no secret that omnichannel retailing is increasing rapidly. Retailers now understand that to achieve maximum sales and growth, it’s no longer possible just to have a brick-and-mortar store. Instead, retailers must utilise multiple sales methods to reach the maximum number of customers and provide a variety of ways to purchase.
The payoff for retailers who have invested in omnichannel services is massive. US retail giant Target saw its digital sales increase by 195% in 2021. In addition to this, they discovered that omnichannel customers spend four times the amount store-only customers spend and ten times more than digital-only customers. For example, 80% of customers who return products to stores choose to spend their refund in store. The growth possibilities for retailers who embrace omnichannel services are endless.
However, a critical feature of successful omnichannel retailing that often goes under the radar is brand consistency for retailers. This means improving your brand assets alongside your physical retail assets – for example, investing in your social media – and keeping a consistent brand identity across all of your digital platforms and in-store.
Retailers that prioritise brand consistency notably fare far better than those with a lukewarm approach to branding and identity. For example, luxury fashion house Louis Vuitton has managed to sustain their brand identity over a 160-year history, repurposing this into an online brand with over 20 million followers on Instagram. Similarly, fashion retailer Boohoo has thrived over the last year as it has built a consistent image across its app, social media accounts, and website.
Brand consistency for retailers has undoubtedly become more important as e-commerce has become a mainstay of the retail environment. Analysis from Millward Brown Optimor found that in 1980, most of the value of an average S&P 500 company came from physical assets such as factories or inventory. However, in 2010, these physical assets comprised a maximum of 40% of the company’s total value. The other 60% of the company’s value came from intangible assets, and around half of it was attributed to the brand.
We know that omnichannel retailing will only grow in the future, as will the dependence on e-commerce. In 2021, the percentage of customers who shop online (41%) is catching up with the percentage of customers who still shop in physical stores (43%). As a result, brand consistency for retailers will also become a top priority.
How Retailers Can Successfully Achieve Brand Consistency
There are several factors to achieving brand consistency for retailers. Cultivating a consistent brand identity is also more challenging for retailers than in other industries. Companies need to consider their in-store layout, online persona, product range, customer service channels, promotions, and packaging. To achieve consistency, each area has to work towards the overall brand identity and present a consistent brand image and personality.
A store solution for brand consistency for retailers can often be as simple as choosing a signature colour to implement in your stores and online – this alone can increase brand recognition by 80%. However, before implementing any store solutions, brands must clarify their goals, mission statement, audience, and style guidelines for messaging. If these are strong, it will be easier to design a brand identity that encompasses your company ethos.
For retailers, brand consistency also starts with recognising the customer journey. This means identifying how your customers engage with your brand along multiple touchpoints. For example, if they visit your website, then choose to ship to a store, or visit your physical store to try on products which they will then purchase online. According to McKinsey, performing well on customer journeys is 35% more predictive of customer satisfaction than performance on individual touchpoints. In the end, omnichannel retailing is only as powerful as your brand identity.
If brick-and-mortar stores are still a priority for you, consider store solutions like pop-up displays to educate customers on your products. Other elements like music or lighting will also go some way to communicating your brand’s personality. Whatever you choose, you should implement the same conscious design and stylistic choices across all of your stores, as well as online.
Using Brand Consistency as a Growth Strategy
In 2020, Deloitte concluded that purpose and authenticity were the keys to future retail solutions. Without these two qualities, consumers cannot connect with brands and lose interest in purchasing their products. For retailers, brand consistency provides a way to communicate your brand’s purpose and ensure you appear as authentic as possible.
But brand consistency for retailers isn’t just about implementing a few changes across your online and in-store assets and leaving it at that. Your brand identity needs to be consistently maintained and, in some cases, altered to reflect your customer’s priorities. As such, brand consistency should form part of a retailer’s growth strategy which it returns to frequently.
For example, millennial and Generation Z consumers behave very differently from other generations, and companies have to adapt to keep their brands relevant. For example, millennials ascribe more value to brand purpose than older generations – 62% of millennials favour products that promote their social or political beliefs, compared to 21% of people aged 55 or older. The same is true of Gen Z, 60% of whom say it is important that brands value their opinions.
The results are even starker for Generation Z, who by 2026 will make up the largest consumer base in the US. They differ from millennials in their motivations for buying and how they make purchasing decisions. Whereas millennials may be interested in brand status – buying a product for the brand name – Generation Z is more interested in purchasing products that make them stand out, regardless of brand. Brand consistency for retailers will become even more important to appeal to the Generation Z market. There will be an increase in social media marketing spending plus a focus on making physical stores more of an experience than the traditional brick-and-mortar store.
In the end, evidence shows that investing in your brand identity will have long-term benefits. Strong brands consistently outperform averages for the market. McKinsey research shows that the top 40 worldwide brands have outperformed the Morgan Stanley Capital International benchmark every year for the last 13 years. It’s also true that when consistently maintained, a strong brand identity can drive a 10-20% increase in overall growth.
If you can entice the Generation Z market with your brand identity, you’re also going to see lifetime pay-off – 66% of Gen Z shoppers said that once they find a brand they like, they will continue to buy from them for a long time.
Delivering a Seamless Experience for Customers
Cohesive and compelling brand identity will inevitably inform your customer experience – that is, how your customers experience your brand in-store and online. A seamless experience is paramount to the omnichannel retail experience, and retailers cannot get this right before first evaluating how seamless their brand identity is.
We also know that customers want an easy shopping experience as much as a compelling brand identity. The consequences of a bad shopping experience for some consumers can be dire for brands.
Despite their brand loyalty, 64% of Generation Z consumers said they would switch to a competitor after multiple negative experiences with a company.
If you’re taking advantage of omnichannel retailing, not only is brand consistency for retailers across numerous touchpoints important but also executing a seamless shopping experience. Customers want to know they can purchase the products they want, whether they’re shopping online or in-store. A consistent brand experience will also bolster a consistent brand identity: undoubtedly, omnichannel experiences and brand consistency for retailers go hand-in-hand.
But how can retailers build an omnichannel retail experience that also promotes brand consistency? Firstly, retailers should take advantage of customer service technology such as chatbots. Research shows that new generations of consumers are far more comfortable interacting with virtual assistants than older generations. 40% of Gen Z and millennial customers agree that when in a hurry, they would rather interact with a chatbot than a human customer service agent. Chatbots can also be customised to reveal a brand’s personality in their tone of voice and language use, so not only do they promote a seamless experience bus also bolster brand consistency for retailers.
Additionally, retailers should build an omnichannel experience at every stage of the customer’s journey. Customers should have the option to return items either by post or in-store at their chosen location. This opens up further in-store interactions, which we know can often result in additional sales, as well as providing that effortless shopping experience that consumers desire.
No matter how you go about building an omnichannel experience, companies agree that building a seamless experience is one of the most significant factors in growth; 21% of companies agree that customer experience is the most exciting opportunity for brands. However, customer experience can also be a way to enhance brand consistency for retailers, and technology like inventory software can aid that.
How Inventory Software Can Help Improve Brand Consistency For Retailers
Earlier this year, we examined how brick-and-mortar stores are adapting post-pandemic. Currently, one of the biggest challenges for retailers is keeping consistent levels of stock across physical stores and online, and this has only been exacerbated by the ongoing supply chain crisis. However, providing a consistent experience hinges on providing the products your customers want when they want them. Not providing this can have drastic consequences for sales; 96% of shoppers have left a store without purchasing anything because they couldn’t find the exact product they wanted.
Over the last two years, increased dependence on online retail has also prompted retailers to consider their operations. Retailers are now expected to fulfil orders made online, on mobile, and in-store simultaneously, requiring more accurate fulfilment systems and inventory tracking.
When it comes to retail solutions that improve brand consistency for retailers, there is only one: inventory software. Inventory software can provide retailers with real-time visibility of where their stock is, whether in a distribution centre, in-store, or in transit. This transparency is crucial to keeping up with consumer demands and increasing customer satisfaction and providing seamless brand consistency for retailers across multiple touchpoints.
Nike is one of the brands using inventory software to create a more successful omnichannel retail strategy. Starting in 2019, they implemented RFID technology in almost all of their non-licensed apparel and footwear, a decision that started to pay off during the supply chain issues of 2020 and 2021.
The company saw a 75% increase in digital sales over the pandemic, one-third of their total revenue. The real-time data that RFID provided offered Nike greater insights into customer buying journeys and the popularity of products. As a result, they could easily respond to customer demand and divert products to where they were selling best.
However, deploying RFID with inventory software like Detego’s has also allowed Nike to enhance their brand identity further. By harnessing technology like RFID, Nike has transitioned from selling mainly to wholesale partners to selling directly to consumers: they call this the “consumer direct offensive.” As well as embracing omnichannel retailing, this has also been a way for the company to enhance their brand identity by interacting directly with customers.
Brand consistency for retailers and omnichannel selling work together, and inventory software like RFID is the tool that can enhance both of these crucial parts of your business. Book a consultation with Detego today to find out how RFID software can improve your omnichannel success and enhance your brand identity.
Cloud-hosted RFID software
Stock accuracy, on-floor availability, and omnichannel applications in stores.
Book a demo with Detego to find out how our cloud-hosted RFID retail solution could help you improve your stock accuracy. With fast and easy results and application, our all-in-one software provides intelligent stock takes, improving the efficiency of your omnichannel services.
Traditionally, Black Friday has been one of the most successful times of the year for retailers. The total amount of sales during this period – especially online – has only increased year on year, and by employing effective performance solutions for Black Friday, retailers can often outperform their yearly KPIs in this one weekend.
However, this year is set to be different. Companies are already grappling with the ongoing supply chain crisis, but long-term changes to the retail sector make this year more difficult for retail businesses.
Research has shown that the retail industry is one of the most disrupted of all sectors. This disruption comes from all areas, and isn’t just limited to supply chains or the result of the pandemic. 43% of senior retail executives say the shift towards e-commerce has had a major impact on their organisation, but this is closely matched by other factors. These include evolving competition (38%), data privacy issues (37%), shifts in consumer demographics (35%), and technological advances (34%).
Not only is disruption affecting all areas of retail operations, but senior executives lack the confidence to tackle this disruption. Just 40% of retail leaders feel confident that they can survive the current disruption. To tackle this disruption, more innovative performance solutions for Black Friday are necessary to improve upon last year’s sales.
Despite the disruption, this Black Friday 2021 still looks promising for retailers. Online sales continue to increase, following a broader trend in retail but also as a reaction to the pandemic. Holiday spending this year is forecasted to increase by 10% compared to last year, while e-commerce is up 45% compared to 2019. Retailers can easily capitalise on this drive towards spending by pre-empting demand and turning to new performance solutions for Black Friday.
No matter which retail solutions leaders want to prioritise this year, they will undoubtedly be informed by digital transformation – 53% of retail organisations are choosing to invest in new technology to combat ongoing and future disruption. Whether that’s inventory software like RFID or improving their omnichannel customer experience using other forms of retail technology, there are a wide range of digital performance solutions for Black Friday for retailers to take advantage of.
The Current Issues Affecting the Retail Environment
The retail industry is going through a period of sustained volatility, with much of this uncertainty being driven by the on-going supply chain crisis and the recovery from the pandemic. Earlier this year, we looked into the supply chain crisis in detail, examining how the crisis got to this stage.
Unpredictable consumer demands mean that the supply chain crisis has been building for a long time. However, incidents like the pandemic, the blockage of the Suez Canal by the Ever Given container ship, and labour shortages all exacerbated the problem. Just the Suez Canal blockage alone caused an estimated loss of $9.6 billion worth of goods each day.
But how can businesses adapt to the crisis? The biggest change retailers can make is to embrace digital solutions such as AI-driven forecasting and cloud software. But as 87% of retail executives now agree that disruption is a primary challenge confronting both business and society, it’s clear that there is more uncertainty in the future retail landscape. Though we’re seeing the first signs of recovery from the pandemic among retailers, there’s still a lot of change to come.
Whether that’s the increased use of AI in customer service, the rise in e-commerce, new forms of payment including virtual currency, or tackling large competitors like Amazon, the industry is changing rapidly. Now, retail solutions don’t just need to respond to crises as they happen but also anticipate periods of uncertainty and volatility. As a consequence, retail performance solutions for Black Friday should offer short-term growth and long-term investment in technology to future-proof retail operations.
How Consumers Are Changing and What This Means for Retailers
As businesses consider retail solutions to survive this long period of volatility, it’s worth noting that consumers are also changing. With issues like sustainability and omnichannel retailing becoming new priorities for consumers, businesses can no longer rely on outdated performance solutions for Black Friday. Instead, digital retail solutions like RFID allow retailers to anticipate consumer demand and successfully respond to new trends.
The largest chain in consumer habits has come with the rise of Generation Z consumers. These shoppers have increasing disposable income yet are more concerned than older generations with where they spend it – 70% of Gen Z consumers say they monitor their spending more carefully as a result of the pandemic. As such, any proposed performance solutions for Black Friday need to consider their concerns and habits.
In addition to this, Gen Z consumers are more likely to take advantage of omnichannel retailing. More so than the average customer, they want to shop whenever and however they like. They are 56% more likely to shop in-store for goods, but at the same, also 38% more likely to shop online than other generations. Consequently, performance solutions for Black Friday need to consider how to provide an omnichannel experience. In some cases, business leaders should also consider adding additional services like shipping products from a select store or returning to any store the customer chooses.
The importance of omnichannel retailing cannot be underestimated. One survey from Harvard Business Review found that though just 7% of customers shopped exclusively online, 73% actively moved across multiple channels, favouring both in-store and online experiences. The omnichannel customers liked to use multiple touchpoints with brands and were also keen users of in-store digital tools like price checkers and interactive catalogues.
In short, the new generation of consumers can flexibly move from in-store purchases to shopping online. However, despite this move towards online purchases, they still predominantly shop in-store – over half of digital-savvy consumers still choose to shop in-store, with 49% of consumers valuing being able to visit showrooms and then purchase those products online. This means that you need to prioritise store solutions as much as online and omnichannel retailing.
Generation Z consumers are also more likely to be concerned with the environmental impact of their purchases. With COP26 – the UN’s Climate Change Conference – having just ended, fashion retailers are just one of the industries committing to store solutions that prioritise sustainability. Thanks to the pandemic and the global spotlight on climate change, six out of ten Gen Z consumers are more conscious about the items that they buy.
Last year, we examined the recommerce and rental trend among retailers, predicting that it would be one of the biggest retail trends of this year. While consumers are driving demand for a circular economy, bringing a recommerce environment to stores brings its own unique challenges. The most complicated of these challenges is how to track a large amount of unique inventory through the supply chain and into stores. One solution to this is RFID tagging, which when combined with the use of inventory software can give retailers more accurate stock counts.
So, what does all this mean? Primarily, it shows that businesses should prepare performance solutions for Black Friday that prioritise the customers of the future – shoppers who want uncompromised accessibility to products wherever they are and new ways to purchase and return their products.
How to Navigate the Challenges of a Volatile Retail Environment
Most importantly, newly implemented performance solutions for Black Friday should tackle how to outperform this year, but also in years to come. Reliance on digital products like inventory software and AI will only increase in the retail space, and businesses that anticipate this will get ahead of the competition. For example, RFID is experiencing what McKinsey is calling a ‘renaissance’ in retail, with technology costs having fallen while new innovations mean even more cost-saving benefits for retailers.
With just a couple of weeks to go, some businesses may not be ready to implement new performance solutions for Black Friday. However, Christmas is also just around the corner, providing another chance to outperform before the end of the year. While January sales don’t reach the same peak as Black Friday – when businesses often make up to 20% of their sales revenue for the entire year – they are still valuable.
Technology and Analytics
Digital transformation is a crucial phrase for retailers when it comes to tackling periods of uncertainty. Still, performance solutions for Black Friday that focus on innovative technology can offer retailers the chance to outperform competitors.
Retailers that harness solutions like predictive customer analytics will know exactly what consumers are looking for and which products might be most in demand during Black Friday and Christmas shopping. Retailers who employ AI have seen a collective $40 billion worth of additional revenue over a three-year period.
Inventory software is another innovation that will make busy shopping periods more seamless for retailers, with 46% of companies having already implemented RFID as a reaction to the pandemic. We know that use of RFID will only increase, making it a promising performance solution for Black Friday for retailers to consider.
Re-imagining the Brick-and-mortar Shop
The pandemic has dramatically accelerated the pace of digital transformation in retail supply chains and stores. Over just a few months during the pandemic, executives have implemented close to three or four years of digital innovation in their companies.
Globally, 58% of business interactions with customers are now digital, an acceleration of three years compared with the average year-on-year increase. Consequently, businesses who want to implement successful performance solutions for Black Friday will inevitably turn to technology.
However, it’s also true that consumers may harbour anxiety around shopping in-store for some time. Though it’s unlikely that measures like one-way floor plans and plexiglass screens will stay in place for much longer, retailers will need to reimagine the in-store experience with the consequences of the pandemic in mind.
This might include incorporating aspects of digital experience in physical stores, such as intelligent AI personal shoppers on the customer’s phone or digital mirrors in changing rooms that can provide product recommendations in real-time. These store solutions will reimagine the pre-pandemic store, and take advantage of digital innovations that customers will be seeking in the future.
Perhaps the biggest retail solution has to be the shift towards omnichannel retailing. Stores can no longer solely exist in a physical or online space but a combination of the two. It turns out that omnichannel customers are also more valuable for businesses, spending on average 4% more on every shopping occasion in store and 10% more online than the average single-channel customer.
We know that consumers want omnichannel experiences, but implementing a performance solution for Black Friday that incorporates this may be more difficult. Inventory software like RFID tags is one solution, offering retailers a way to track stock across the supply chain, both in warehouses and online.
RFID as a Performance Solution for Black Friday
Especially at times of increased volatility and demand, more accurate stock inventory is one of the easiest ways to improve your company’s performance. This is even more important right now when supply chain issues make it more difficult to get an accurate picture of your inventory. Inventory software is the ideal performance solution for Black Friday, offering retailers an accurate picture of stock and the ability to navigate periods of increased demand successfully.
Preventing Out-of-stock Notices
Research from RetailEXPO has revealed that 31% of customers want retail employees to help them with out-of-stocks. This is crucial during Black Friday when demand will be higher, and customers may be looking for specific items in sales. Retailers who have adopted inventory software like RFID will be more likely to uncover new stock, having insights into where the same shipments and products are in their supply chain journey.
While there will be an increased number of shoppers heading to physical stores this year, many Black Friday shoppers will still resort to online purchases. RFID easily allows retailers to keep track of stock across online and in-store sales and offer customers the chance to pick up their purchases in-store. As reliance on a mix of channels grows, inventory software is crucial to accurately track stock, increasing performance during times of increased demand like Black Friday.
Detego’s all-in-one retail solution gives you the tools to command complete transparency over your supply chain and inventory. We harness the power of RFID alongside an end-to-end SaaS inventory software platform that improves inventory accuracy.
Cloud-hosted RFID software
Stock accuracy, on-floor availability, and omnichannel applications in stores.
Book a demo with RFID to find out how our cloud-hosted RFID solution could help you outperform during busy sales periods. Our multi-user app can provide intelligent stock takes and a smart in-store replenishment process and later, you can scale the solution to offer omnichannel services and effectively manage your entire store operations with real-time, item-level inventory visibility and analytics.