Adopting the technology to win over the emerging post-pandemic consumers that now move fluidly between online and offline touchpoint's and demand better in-store experiences.

How RFID is Helping Brick-and-Mortar Stores to Win Over the Post-Pandemic Consumer

It is no exaggeration to say that the past year has been destructive yet transformative for the retail sector. The pandemic caused a considerable dip in the performance of stores worldwide, and now in the wake of – what we hope were – the worst days of Covid-19, recovery is the keyword on everyone’s mind. In the three months since physical stores reopened in the UK, brick and mortar retailers have begun implementing the strategies they meticulously designed when all they could do was watch and wait as e-commerce cannibalised their market share.

Many of these retail strategies were built upon the review of supply chain management, with 70% of Europe’s 30 biggest retailers using Covid-19 as a reason to reevaluate how they’re operated. Yet even now, as sales start to return to pre-pandemic levels — with physical retailers reporting the strongest summer sales in four years — it is clear to see that these strategies are still grappling with how to manage uncertainty.

So, as a result of recent customer demand exceeding expectations, stock is at its lowest level in the entire 38 years of the CBI’s records. Caused by limited inventory visibility — a topic we covered in an article last month — it is a problem that is continuously overlooked in retail, even though its impact reverberates throughout entire business models, and its solution remains relatively simple.

RFID is an easy and practical method of monitoring inventory throughout the entire supply chain, helping retailers respond to market fluctuations navigate the chaos of today’s retail environment. So, could this technology be the answer to brick-and-mortar’s strategic recovery?

Why the Time is Right for Retail’s Digital Maturity

It has been a long time — around 20 years in fact — since RFID was first introduced as a change-making technology to supply chain management. From then on, widespread adoption has been slow yet robust amongst few innovative retailers who understood the need to invest in software providing stock visibility. But now that Covid-19 has accelerated retails digital adoption by at least three years, RFID has experienced a recent uptick in implementation RFID has experienced a recent uptick in implementation, as use cases become as clear as ever before.

A recent article exploring RFID’s renaissance by McKinsey & Company outlines the current stages these use cases are at with store operations and customer experience only beginning to be explored as solutions. This growing adoption of RFID we see by retailers is comparable to the increased implementation of QR codes, which are currently experiencing a resurgence as COVID-19 heightens demand for digital touchpoints in physical spaces.

The blending of online and offline is one of two fundamental changes to the retail landscape that have ripened RFID for success:

1. Omnichannel Fluidity: 

Consumers’ have newfound comfort in moving between digital and physical channels as social restrictions pushed them into online environments over the past year. And as these digitally savvy customers begin to use more omnichannel touchpoints, retailers will need to manage item-level data in real-time to consistently cater to customers as they shift from clicks to bricks.

The second key difference to the retail sector since stores first shut their doors in early 2020 is the ambiguous long, and short-term needs of customers as the context of their everyday lives unpredictably shift on both local and global scales:

2. Uncertain Market Demand

So as the future of the new normal remains blurry, retailers will need to become more responsive to changeable market demands and make sweeping supply chain adjustments to mitigate the risk of wasted inventory in addition to granular decisions to fulfil localised and personalised, item-level needs.

Inventory Visibility Helps Retailers to Anticipate Change and Respond to the Unexpected

The cycle of instantly catering to consumer demands across multiple channels while being powerless to predict them makes RFID all the more compelling as a solution. The technology is being used to increase retailer’s profitability by helping businesses to empower their store processes. RFID efficiently replaces arduous manual stock-takes and regularly updates inventory levels, so stores have a clear real-time view of product location and availability. This not only enhances brick-and-mortar stores as fulfilment centres but allows them to operate accurately across digital and physical channels.

Yet crucially, to mitigate risk, we should not forget that inventory visibility is more than simply viewing stock levels. It also can contextualise inventory information with item-level data – such as size, colour, and price – helping buyers and merchandisers to improve their practices with insights.

The Retailers Already Using Inventory Visibility Software to Strengthen their Post-Pandemic Customer Experiences

While there are many examples of RFID’s application in industry, recent instances of retailers emboldening their use of the technology to strengthen their post-pandemic strategies are impressive. 46% of respondents to recent Accenture research indicating that they have focused on RFID in response to COVID-19. And although the term inventory software may seem like a dull back-end technology, there are already many new use cases emerging and harnessed by retailers in innovative ways to modernise their offerings.

In-Store Customer Experience

As physical retailers look to win back their market share, the role of stores has needed to evolve with customer demands. For example, research last year by RetailExpo uncovered that 31% of consumers want employees to help with out-of-stocks. And luckily for retailers, store staff are becoming more adept at switching between online and offline more frequently, allowing customer-facing employees to underpin their daily activities with inventory insights such as product availability, reservations and returns.

Mango: Fashion retailer Mango – whose parent company Inditex began to adopt RFID back in 2014 – recently launched a new physical store that combines RFID with deep learning. Generating data, store staff can glean insights using stock performance and availability to enhance their ability to deliver excellent customer service.

Farfetch: Heritage luxury brand Chanel’s collaborative store with Farfetch uses RFID to power consumer-facing services such as changing room mirrors to monitor engagement with inventory and up-sell similar and complementary products. By underpinning the physical shopping experience with data, customers are able to access a level of personalisation often reserved for online commerce.

Omnichannel Continuity 

The sudden surge in omnichannel implementation is a topic we discussed in detail in a previous article, and its importance in the current retail environment cannot be underestimated. For the many retailers operating multiple commerce channels throughout the pandemic revisiting their omnichannel capabilities will have been imperative as the purpose of their online and offline environments are no longer siloed.

Reiss: On the unpredictable UK high street, Reiss has managed to stay solid and stable. Achieving a 4% uplift in sales with Detego, the retailer implemented RFID into its stores before the pandemic hit. So now, when purchasing from Reiss’ online store, customers are provided with the option to collect purchases from their brick-and-mortar shops.

Extending Product Life Cycle

We are seeing the emergence of independent resale businesses, and many existing retailers are beginning to consider extending the life of their stock by rolling out buy-back and circularity schemes. Yet, lack of supply chain transparency has for a long time been a growing concern for consumers who demand more ethical and sustainable practices within the sector. So as the industry continues to contemplate the future of products beyond initial consumption, RFID presents itself as a valuable tool for shedding light on an item’s circular journey.

Vestiaire Collective: In collaboration with Alexander McQueen, the luxury resale marketplace Vestiaire Collective uses NFC tags to authenticate its products. This collaboration benefits sellers and buyers by helping owners find value in their wardrobes and reassures consumers of the validity of their products.

eBay: Similarly, the online marketplace eBay uses NFC technology to help users verify the authenticity of purchases of luxury handbags. This is a somewhat important milestone for businesses that want to emphasise their reliability when working with designer goods.

For many retailers, Covid-19 has awakened then to the risks of merely dabbling with technological innovation — rather than fully immersing themselves in it — and brought to light the blind spots within their supply chains that previously flew under the radar. But there is no one size fits all when it comes to technology, and these retailers have expertly harnessed inventory software to their individual requirements, carving out spaces for the technology to fulfil specific objectives within their operations.

Building RFID into Retail Supply Chain’s is as Easy as Ever Before

One of the common myths about RFID is the apparent steep costs of its integration. But in reality, using the technology is becoming increasingly cost-effective as retailers see an ROI of more than 10% whilst the price of RFID components such as readers and tags drop. And as technology matures, RFID is more precise than ever. As a result, most businesses see a boost to accuracy rates in stock, helping store staff make better use of their time carrying out customer fulfilment instead of stock-takes.

Additionally, where complete RFID integration into supply chains was a complex operation with many moving parts, its currently high global adoption within many continents will make coordinating far-reaching stock journeys easier and agile.

RFID and the Future of Brick-and-Mortar Innovation 

There are so few technologies that have the opportunity to impact the everyday experiences of so many store stakeholders — from customers and sales assistants to buyers and merchandisers, all the way through to manufacturers — and RFID is one of them.

As the post-pandemic consumer emerges expecting complete omnichannel continuity to attain their trust and loyalty, inventory visibility could be the key to future-proofing any retail business in both online and offline environments. And retailers now know the importance that understanding their operations in detailed real-time plays in managing the flow of goods with more control and agility.

So although we can all agree that the technology is nothing new, RFID should not be ignored as the answer to unique challenges retailers face today and the essential tool for building dynamic in-store solutions for the future

Detego Retail Store Application

Cloud-hosted RFID software

Stock accuracy, on-floor availability, and omnichannel applications in stores.

Detego Store is a cloud-hosted RFID solution which digitises stock management processes, making them more efficient and more accurate. Implemented within hours, our multi-user app can provide intelligent stock takes and a smart in-store replenishment process. 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.

Shrinkage has always been a critical challenge for retailers, but now post-pandemic, there is much more than inventory at stake.
For retailers and their customers, radical supply chain transparency can provide win-win results.
Meet us at RFID Journal Live! 2021 Meet us on 26-28 September at the largest dedicated RFID conference in Phoenix, Arizona.

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