What is a Smart Fitting Room?

Smart fitting rooms consist of an interactive touch-screen mirror connected to an RFID reader and a motion sensor. They sense when customers enter the fitting room, and sense what items they have brought in with them by reading their RFID tags. They then assist the customer throughout the fitting room process, giving them information on products and calling for assistance if required. In simple terms, they allow consumers to experience the same benefits they get from online shopping whilst in the fitting room, as well as let them request items be brought directly to them.

 

What does a Smart fitting room do?

  • Detect movement and presence of a customer
  • Identifies which item the customer brings to try on
  • Displays additional product information
  • Provides availability information to the consumer
  • Shows product recommendations that would complement the currently selected style
  • Provides additional services such as Call for Assistance or Call for different products / colors / sizes

 

Smart fitting rooms have existed in the fringes of the retail technology space for a number of years. The interactive mirrors certainly capture the imagination, but they’ve only really existed at trade shows and in concept stores rather than out in the wild. It’s fair to say the technology was in the category of interesting and fun but not really taken seriously. Fast forward to 2020, and we have just seen the first major commercial use of smart fitting rooms, in a truly digital, experience-first, award-winning store.

 

What makes up a Smart Fitting Room? 

 

So, now is the time to start paying attention to Smart Fitting Rooms. But for those looking at the technology, either for the first time or with fresh interest now that solutions are live in the market, the business case might be a concern. In this article, we will break down exactly what a smart fitting can do, and what kind of value they offer for retailers, customers and retail profits.

What are the business benefits of Smart Fitting Rooms?

Improving Customer Experience

As a customer-facing technology, we’ll start with the most obvious (yet qualitative) use of the smart fitting room – an improved customer experience.

Rather than taking this for granted, however, let’s dig into how, why and even if smart fitting rooms offer a better experience for customers. Having a mirror automatically detect and display item information is nice and will wow customers (at least to begin with) but doesn’t really add much more value than an interactive screen that can scan products barcodes or even a product QR code.

What sets smart fitting rooms apart from these solutions are the interactive options and how they support customers. This includes offering additional and related or ‘frequently bought together’ items, information on exactly what is available in the store (using the real-time stock view RFID provides) as well as being able to request items be brought directly to the fitting room. These options being built directly into the mirror that customers already use will both delight customers and make the fitting room experience more convenient.

 

How smart fitting rooms benefit the customer:

  • Shows different product combinations
  • Makes product recommendations
  • Article availability check
  • Shows full range of articles to browse through
  • Additional information, videos, social media integration
  • Customer-friendly fitting (Article-Bring-Service)
  • Enables digitally supported purchase decisions
  • Direct reservation or ordering of articles
  • Different delivery options (delivery to home address, from another store, etc.)

 

The economic value of customer experience:

The economic value of customer experience

Increase Sales

‘Customer experience is king’ has been a favourite tagline of innovative retail for some time. While it’s probably true and certainly sounds good, when it comes to the business case of new technologies you really do need to look at revenue. In terms of the customer, that generally means sales. So, what effect do smart fitting rooms have on sales? Other than more tenuous effects like bringing more customers in to the store, Smart fitting rooms increase retail sales in two ways:

Combating Lost Sales

Fitting room conversions is a self-explanatory if unfamiliar term for brick and mortar stores. That’s because as a KPI retailers have never had any way to measure or track this (more on this later). But fitting rooms are absolutely pivotal to apparel sales.

According to The Retail Doctor, shoppers who use dressing rooms are 70% more likely to buy versus those who don’t. It’s easy to see why, as customers have already decided that they like the item and want to purchase it, so fitting rooms become a question of making sure, and finding the right size.

It’s finding the correct size where most fitting rooms sales are lost. If a customer needs a different size, they will have to leave the fitting room and come back. Studies prove that this can have a major impact on sales, as 50% and 21% of people say they will sometimes and every time respectively leave the fitting room and the store if they were looking for assistance to change colour or size of an item and can’t find anyone.

This is why helpful fitting rooms assistants have such a big impact on sales, customers who receive assistance in fitting rooms make twice as many purchases as those who don’t. Smart fitting rooms address this issue, showing customers what other sizes are available and letting them request different sizes be brought directly to them. This allows stores to have assistance on hand (they are notified via a mobile application) without needing a permanent fitting rooms assistant, which is not feasible for many stores.

 

Increasing basket size with in-store cross-selling

The other sales driver of smart fitting rooms is having product recommendations made based on the items brought into the fitting room. This brings cross-selling common in e-commerce to the brick and mortar experience. Whilst these can be done as an endless aisle (so the entire product range of a store) the better way is to only offer items that are available in the store (using the stock visibility RFID provides). Much like requesting additional sizes, customers can request to have items that catch their eye brought directly to them. This can drive sales significantly and has been seen to increase fitting rooms basket size by 100% in initial studies.

Smart Fitting Room Gif

New Data and Insights For Stores

The lesser-known use case of smart fitting rooms is the data and insight provided about the customer experience. It’s often said that compared to e-commerce, retailers have next to no data about what actually happens inside their stores. Other than what gets sold, they’re blind. In an industry as competitive and fast-moving as retail, this lack of analytics can be fatal.

We’ve already established how important fitting rooms are to apparel sales, so it seems that collecting and analysing data from them is a no-brainer. Traditionally however this hasn’t been the case, but with RFID and smart fitting rooms, retailers can collect that data in a non-invasive way.

 

What kind of insights are provided by smart fitting rooms? 

  • Item Conversion rate – How often are items selling (or not selling) immediately after being tried on in a fitting room?
  • Fitting baskets vs shopping baskets – Most tried on vs most sold
  • Number of items per session
  • Session duration
  • Recommendation conversion rate – How often are items recommended, requested and then sold?
  • Need assistance use – How often are staff called to the fitting room using the mirror?
  • Staff response time – How long does it take for store staff to react to customer requests? (gaining actionable insight to customer experience)

Conclusion

Consider the context of interactive displays, AR, VR and even RFID tables. Smart fitting rooms are both a part of this space and completely apart from it. This is because fitting rooms aren’t new, they are and always will be a part of the apparel shopping experience. Rather than adding a new element to the shopping experience like VR for example, smart fitting rooms are improving an integral (and for many, unpleasant) part of the customer experience.

In other words – it’s an evolution, not a revolution.

Whether retailers embrace this evolution will be decided in the coming years, now that smart fitting rooms are finally out in the wild. Perhaps even more crucially, especially when talking about business case, now smart fitting rooms are out in the market we will begin to see data and results that will prove the value once and for all. As early innovators of the technology, we can’t wait.

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Radio frequency identification (RFID) has had a fairly long road to adoption in the retail industry. Leading the way on this journey has often been large tier 1 retailers, either investing and experimenting with the technology in-house or partnering with early RFID specialists like Detego.

However, in the more settled retail RFID industry of today, implementing the technology is a different prospect. Here’s 4 reasons why there’s never been a better time for small and medium retailers to reap the benefits of RFID:

1) RFID has Lowered in Cost

 

Naturally, price point is a huge factor in choosing to implement a new technology for retailers of any size. Like most technologies, RFID was at its most expensive when it was new, but over time has become more and more affordable. This drop in cost is mostly down to the price of RFID tags themselves decreasing significantly. In the early 2000s, tags cost up to $0.75 (Approx. £0.50) whereas these days the average cost is between 3 to 8 cents (so around £0.05).

Developments in hardware and software also make a difference to the price point of RFID projects. For small and medium sized retailers, in particular, the need for only a single handheld reader per store, new hardware like mobile RFID label printers, and the availability of modular cloud-based SaaS solutions can lower the initial investment required to get started with the technology. This combination of industry progress makes leaner, more affordable RFID solutions a reality.

Handheld RFID reader performing a stock take

2) The Established RFID Industry Presents Less Risk and Better Knowledge Application

 

In the early days, RFID projects presented something of a risk. Bigger brands have the resources and personnel for (often in-house) ‘trial and error’ projects, but smaller organisations do not. Now that Retail RFID is an established sub-industry, retailers no longer have to go it alone and have far more options in terms of vendors, partners and solutions. This often means no steep learning curves and more stable and effective digital transformations. In other words, it’s now known what works and what doesn’t work for RFID in the retail industry.

 

How has RFID become more feasible for retailers over time?

  • Expanded and established use cases
  • Project stability
  • Securing return of investment
  • Easy and less expensive implementation

3) RFID Implementation has Become Easier

 

Historically, implementation has always been a barrier to entry for RFID. This is because adopting RFID is a fairly transformative project, meaning you have to make significant changes to see the significant benefits. Unfortunately, these changes have looked too daunting for many a retailer, especially for smaller brands who don’t have the resources to spare on long projects or clunky transformations. In recent years however, established RFID solutions offer more of a ‘plug and play’ experience.

 

How has RFID implementation changed for retailers?

  • Out-of-the-box solutions
  • Cloud-hosted platforms
  • Smart shield
  • Able to print and encode labels on-site

4) Scalable Solutions are the Perfect Platform for Smaller Retailers to Unlock the Value of RFID

 

As well as easier implementation, scalable SaaS solutions are now common practise, making RFID projects easier to manage and develop over time. A scalable solution means retailers don’t have to jump straight into the deep end. This makes the technology far more accessible for retailers of all sizes, but perhaps particularly for smaller sized retailer who have a limited technology budget and need to invest over time.

Scalable solutions, like the Detego platform, often focus on core deliverable KPI’s like inventory accuracy and product availability in stores. This is because they provide immediate ROI as well as being the key foundation for many of RFID’s other use cases. One of the main benefits of scalable RFID for smaller retailers is the quickly established ROI can fund the additional investment needed to scale the solution, providing a much easier route to full adoption.

Here’s an example of what a scalable in-store RFID solution (The Detego Store platform) looks like:

An example of a scalable RFID solution: Divided into features

Putting It All Together – What an RFID Project Should look Like for a Smaller Retailer.

So, a smaller retailer  can take advantage of RFID with only a single handheld reader per store and a lean cloud-hosted RFID solution run through a mobile application. Other than the initial change in production to introduce source-tagging (adding RFID labels at the factory) implementation for such a solution is very minimal. The result of this would be rapid increase in stock accuracy, product availability and a subsequent increase in sales. This type of project provides an almost immediate return of investment, the retailer could then choose to scale and advance their solution at any point or stay with what they have and benefit from a leaner, better managed inventory.

Summary

Not only has the technology matured, including tags, hardware and software, but RFID use cases, best-practise and implantation strategies have now been firmly established. Additionally, the RFID sector is now an established market in its own right, meaning smaller enterprises don’t have to go it alone. By using established and experienced specialist partners, retailers can skip the learning curves and go straight to reaping the benefits of RFID.

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Artificial intelligence, the future of smart retail or another empty buzzword?

Artificial intelligence is the poster child for emerging or ‘new age’ smart technologies. Whilst it’s easy to get carried away with ideas of intelligent robots, AI mostly involves intelligent automation systems. This means computer systems that can process and respond to information by themselves, and even learn and self-correct better ways of doing so over time. AI is a broad spectrum, however, and the complexity and ‘intelligence’ of such systems can vary.

AI’s main use for retailers is to automate analysis and decision making

Because AI is still in relative infancy for retail, a large proportion of its use cases for the industry are still being developed and established. We have already seen a strong uptake in AI for customer intelligence in the form of online chatbots and product recommendation engines.

AI uses cases for retail

The other areas of potential, namely optimisation of business processes like supply chain planning, demand prediction and store operations, are beginning to take shape but all share a common problem – they need large amounts of data. This has been the main thing holding AI back in certain areas of the retail value chain, but by utilising another technology becoming increasingly common in the industry, this could all change…

RFID in retail, the story so far:

If the ‘AI revolution’ hasn’t really taken off yet, the RFID one is well underway. RFID is used in retail to track and manage merchandise, on a single item-level, with far greater detail and accuracy than traditional systems can manage. The key benefit of RFID for retailers is an accurate and single view of stock across the entire business and its supply chain.

Naturally, RFID systems produce a huge amount of data for products, both in the supply chain and in the individual store. If only there was something that could process all that data…

AI meets RFID: The perfect match

Combining the large amount of item-level data RFID produces with the automated processing power of AI is the natural next step for retail technology.

The key to doing this is each use case adding value or actively solving a problem. At Detego we often talk about ‘avoiding data for the sake of data’ so when using AI to process such data, producing actionable insights and recommendations is vital.

So, what can we do by utilising AI with RFID, and why should retailers care?

So far, the key areas RFID-driven AI automation offers value to retail operations are assisting store staff, assisting customers and optimising inventory management on both a single store scale and across entire store networks.

Our Data Science team are developing solutions for the following use cases, which we will explore in detail in future articles:

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Sustainability in fashion retail is gradually becoming one of the industry’s top priorities. With apparel contributing to around 10% of all greenhouse gas emissions, consumer attitudes towards brands are increasingly being influenced by their efforts towards sustainability. This is in turn causing many retailers to look to improve their environmental records and explore new strategies to do so. In this article we’ll explore exactly what that looks like for the industry, and how RFID (Radio Frequency Identification) can be leveraged to help with this, particularly to improve traceability of items.

Sustainable retail is a priority for more and more consumers 

Sustainability in Fashion has been a concern for some time but in recent years consumers, particularly younger generations, who are increasingly concerned with the sustainability of their clothes are forcing major change in the industry. According to the McKinsey apparel CPO survey, there has been a 500% increase in the number of sustainable fashion products launched over the past two years.

This proves that the industry is beginning to move in the right direction, but there is still a long way to go. A report by environmental agency Stand.earth claims that only two major brands are delivering on their commitments to reduce emissions, American Eagle and Levi Strauss, who came out on top of the recent report card.

What does sustainable retail mean for the fashion industry?

So, if most of the work is yet to be done to improve sustainability in fashion retail then which areas should retailers focus on? Whilst key areas like sustainable materials and practises will be crucial, retailers will need to make improvements in several different areas in order to improve the footprint of their businesses. Edwin Keh, CEO of the Hong Kong Research Institute of Textiles and Apparel argues that “There is no silver bullet; rather, there will be a combination of a lot of small innovations and a few radical changes.” In the figure below, from the McKinsey survey, we can see the truth in this, as brands are focusing on a variety of methods to reduce their environmental footprint.

Key Areas Execs plan to work to improve Sustainability of Fashion Retail

RFID and Sustainable Fashion Retail

(For an introduction on the basics of RFID for retail, see this article)

So, what part can RFID play in all this? There are three key ways retailers can improve sustainability with the help of RFID:

  • Produce less through leaner inventories
  • Consumer transparency with item-level traceability through supply chain
  • Digitise the emerging ‘fashion rental’ market

The most obvious solution for fashion is to produce less merchandise and prevent wastage of resources. By implementing an RFID inventory system, retailers can have on average 10-15% less inventory in stores, due to the increased stock accuracy and the ability to leverage their stock more efficiently.

Another way brands can use RFID to improve sustainability is to utilise the item-level traceability that RFID tags can provide. As far as sustainability initiatives go, this is a fairly customer-facing use, as brands can leverage the additional data stored within RFID tags to provide transparency about where their products are sourced. Often this will be displayed through customer facing applications such as the brand app and/or NFC (Near Field Communication) initiatives.

This use case is already being implemented by some retailers, and the majority of RFID-enabled brands seem likely to employ it in the years to come. In the McKinsey survey, 65% of surveyed sourcing executives expect to achieve full traceability from fibre to store by 2025, and the majority of brands plan to use RFID to do so:

Graph Showing which technology is used most to improve traceability

The other big impact RFID looks set to make on the fashion sector is in new markets that are only beginning to emerge on to the world stage:

 

The second-hand clothing market may not be second best for much longer

Due to the large increase in consumer interest in sustainability in fashion retail, something of a sub-industry has developed in the second-hand clothing market in recent years. This is no longer just traditional second-hand clothing outlets such as eBay and charity stores, but also brands that actively trade in used clothing. Chris Homer, CTO of online clothing marketplace ThredUp, says its research found the size of the second-hand clothing market has doubled to $24 billion in the US over the past 10 years, and he predicts the market will overtake fast fashion sales within the next 5-10 years. It isn’t just disruptor brands who are looking towards second-hand clothing, as British retail giant John Lewis recently launched a ‘buyback’ scheme with 20,000 customer to help combat clothing waste.

Could the growing rental-clothing industry be the green alternative to fast fashion?

The other subset of fashion retail that is growing out of sustainability concerns is the rental clothing market. This allows consumers to have access to the same variety and turn-over of clothing that they could have with fast-fashion, but without the waste of resources and impact on the environment. Much like the second-hand market bigger brands are also looking to get involved here, with the international apparel brand H&M having very recently announced a trial of a rental service in their flagship store in Stockholm.

 

New markets = New challenges

Both of these emerging sustainable apparel markets are yet to truly find their feet, and time will tell how sustainable they are as business models. One of the main challenges we see for such markets is the traceability of items and combating counterfeit returns and losses. In both second hand and rental fashion models, you will be dealing with far more individual and one-off items than in typical fashion retail. As such, keeping track of individual items will be vital, but more challenging than normal. In such models, items will be moving in and out of the store in both directions rather than predominately in one. Strong inventory management will therefore by imperative for these businesses to succeed.

 

Could RFID be the backbone of the emerging used clothing & rental fashion industries?

It seems RFID could be the perfect technology to build these new sub-industries around, as an RFID system would be able to deliver the perfect conditions for second hand and rental businesses to thrive. With each item having a completely unique ID, retailers would know exactly what they have available, and exactly what they have out with which customer (in the case of rental). As RFID tags are unique and can’t be forged or copied, retailers could offer these services with full confidence that the right product is being returned, eliminating the possibility of any new illicit markets forming.

Finally, using the real-time digital view of inventory created by an RFID system, second-hand and rental retailers would be able to show exactly what products they have available online making items available to click-and-collect or order online. Without such systems these new models might struggle to have a digital presence, which would limit their reach and ultimately their success.

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The ‘Golden Quarter of Retail’ is one of the most profitable periods of the year, but the cost of living crisis could mean retailers struggle in 2022. What can be done?
Are you already planning your 2023 retail operations strategy? This is how you could future-proof your operations with the help of RFID for retail.

We say it all the time, but effectively running a large retail business is challenging, and it is getting more complex by the year.

Even ignoring COVID-19, the highly competitive nature of the industry means retailers must always be pushing forwards, constantly improving their offering, and ensuring margins are optimised to the nth degree.

Managing a full store network is hard enough, but now retailers must operate online channels and even blend operations to offer services like click-and-collect.

The need to manage increasingly complex operations in better and more innovative ways has led retail down the path of digital transformation.

The digitisation of stores and supply chains delivers one of the most crucial requirements of effective modern retailing – product visibility. For retailers who can achieve a single unified view of stock, meeting the high standards of customers and shareholders get a whole lot easier.

Let’s explore the new holy grail of retail – A Single Stock View

What is a single stock view?

A single point of truth in retail means having a single view of stock across the business. It means stores and distribution centres aren’t islands of merchandise that are clunkily attempting to share their version of stock information with one another as best as possible.

Instead, at the foundation of the business is a unified view of every single product. Because this view of stock covers the entire network, items can move between stores and DC’s and remain in line-of-sight the entire time. This has huge benefits for individual operations and the business as a whole.

Doing this requires the right digital technologies. RFID enables retailers to track their products with pinpoint accuracy, and cloud-based infrastructure and The Internet of Things allows you to build a digital view of products, and easily share this data across the organisation.

A single view of stock must be:

A single point of truth for retail inventory must be:

Single Stock View Diagram

What are the benefits of a single stock view?

How do you achieve a single view of stock?

So, what does it take to gain this reliable and complete view of stock?

A single view of inventory starts with a single item. By giving each item an RFID tag, you are essentially giving it a unique digital identity. This means, using regular RFID reads and sensors, you can easily track the item as it moves along the supply chain.

Once it has arrived in a store, the stock becomes far easier to count, monitor and control. Because all this information is stored centrally in a single place, the individual item can be seen by the online store (and its customers) and even neighbouring stores and DC’s.

This transparency boosts efficiency and makes cooperation between different arms of the retail operation far easier to manage.
With RFID in place, you can verify and track your products on an item-level, giving you a complete digital view of every individual item and every single item-movement, in real-time.

But to get every step of the operation singing off the same sheet requires supporting software that is:

  • Cloud-Based
  • Utilises the Internet of Things
  • Is End-to-End, covering from the factory to the shop floor
Single Stock View Roadmap

The Detego platform is the single point of truth for retail inventory

The Detego platform puts all this together and delivers a single stock view that can be counted on. Using RFID, we effectively digitise every single product in the supply chain and the store network. The information can then be fed into existing systems, such as ERP and OMS. The Detego platform covers every step of the item journey, from the factory to the distribution centre to the store. This delivers all the benefits mentioned above, and our in-store application guides store staff to effectively capitalise on this complete view of store inventory.

Diagram of RFID tracking across a retail supply chain

‘Detego is our “Single point of truth” in terms of in-store inventory. As a result, we are able to improve our omnichannel services such as click & collect, returns from e-commerce in the store or directly deliver to consumers from the store in a very efficient way. These are exactly the services our consumers expect today.’

Tobias Steinhoff, Senior Director Business Solutions Sales Strategy and Excellence, adidas

Want to see how RFID can transform your business?

The ‘Golden Quarter of Retail’ is one of the most profitable periods of the year, but the cost of living crisis could mean retailers struggle in 2022. What can be done?
Are you already planning your 2023 retail operations strategy? This is how you could future-proof your operations with the help of RFID for retail.

In the modern retail industry, you’ll no doubt read a lot about how ‘customer experience is king’, but with such a subjective notion that can’t be measured in any reliable fashion, it often feels like a vague concept. An actively bad experience is more tangible (and something we described how to avoid in our previous article) but what makes an exceptional one is more of a grey area. In fact, the elusive notion of customer experience is at risk of becoming yet another retail buzzword.

So, what does good customer experience look like? We’ll start with making an important distinction between shopping and buying. Shopping is the all-round experience of browsing in a store, looking at items, trying them on (in the case of apparel) and finding items and making decisions as you go. Buying on the over hand is a more straight forward (in theory) process were a customer knows what they want to buy, or at least has a rough idea, and finds and purchases their item quickly and easily.

It’s often said that E-commerce is ahead of physical retail when it comes to simply buying but struggles to match the shopping experience of brick-and-mortar. Some retailers have leaned into what sets them apart from online, focusing their investment and new technologies on improving the shopping experience, to surprise and delight their customers. Others have looked to implement technology to compete with e-commerce’s convenience and provide a more streamlined and ‘seamless experience’.

The reality is both of these elements are pivotal to a strong customer experience, and retailers should look to improve both, sticking to the principal that:

 

Retail should be fun when you want it to be, but fast when you don’t.

Fun retail

 

The fun side of retail is mostly concerned with the shopping side of the retail experience. This is obviously very subjective, and many retail customers will simply find the traditional shopping experience fun, provided they are not hampered any problematic friction points. For other customers though, more needs to be done to amplify the ‘wow factor’, as Steve Dennis says, to tempt them away from either a competitor or the convenience of online.

Retailers are increasingly looking to technology to boost consumer engagement in the store and provide a more entertaining shopping experience. Examples of this include:

 

Augmented reality

Augmented reality (or AR) is an interactive experience where virtual images are placed over images of the real world. Applications of AR in retail include mobile applications and fitting rooms where consumers can virtually try on products like clothes or even cosmetic products.

 

Smart Fitting Rooms

Smart fitting rooms offer a considerable improvement on the traditional fitting room experience and bring a little bit of the online experience into the brick-and-mortar store. The mirror automatically detects items (when tagged with RFID) that have been brought into the room, displays them on the mirror with product information and suggests other items that are available, effectively bringing cross-selling into the store.

Smart Fitting Room

Virtual & Robotic store assistants

Robotic store assistants are certainly on the more futuristic end of the spectrum, with the ability to talk to customers and guide them around the store. Whilst this technology is in the earlier stages, with fairly low adoption rates, they are an undeniably fun concept that will make customers think ‘wow’. On the other end of the spectrum we have virtual assistants or chatbots, which can communicate with customers through their smartphones and answer queries and provide them with information about items and stock-levels.

Fast retail

 

But what happens when a customer doesn’t want to spend their time on the full shopping experience? In such a case, a customer is only focused on buying and not shopping. Certain retailers leave something to be desired here, with disorganised stores and long lines for customer service and checkouts. The buying side of retail also happens to be what e-commerce excels at, so retailers need to invest in technology to be able to compete and keep customers choosing their stores when it comes to fast and convenient purchases. These technologies and strategies include:  

 

Advanced Points of Sale 

Long lines for checkouts are a common problem in retail, and for customers looking for a fast experience this is a major friction point. Thankfully there are a range of PoS technologies that make checkout fast and frictionless. Self-checkout is very common in the food industry and reduces queues if not the time taken at the checkout itself. Alternatives like RFID PoS on the other hand significantly reduces checkout times, were as checkout-less solutions like Amazon go and Mishipay remove the checkout altogether.

 

RFID’s smart inventory

The other main thing slowing down the buying process in the brick-and-mortar experience is finding the correct item in the first place. Locating a specific item in the store can sometimes take far more time that it should, especially if staff don’t have the time or the information to help. What’s even worse than this is if after searching for the item the customer finds out that its out-of-stock altogether. We explored this in detail in our previous article but RFID not only significantly reduces out-of-stocks and increases on-floor product availability, but the real-time view of inventory it provides means customers can check available stock online before setting foot in the store.

 

Omnichannel services

We’ve spoken about e-commerce being good at the buying half of retail, and with the vast majority of retailers now being online and 73% of customers using multiple channels in their shopping journeys, it’s no surprise the demand for omnichannel is as strong as it is today. For a fast retail experience, customers can take advantage of click-and-collect and click-and-reserve when they just want to buy products rather than shop for them.

Good customer experience does both

 

So, to wrap things up, if retailers want to establish a reputation for a great customer experience, they need to have an equal focus on the shopping experience and the buying experience. Shopping should be fun; the in-store offering should be superior to online and at its best it should surprise and delight customers with a certain ‘wow factor’. At the same time, sometimes people just want to buy, and if brick-and-mortar stores make that significantly less convenient than online then they’ll suffer to the competition. By effectively leveraging the right technologies retailers can provide a top-level customer experience that delivers on all fronts and keeps customers coming back time and time again.

Did we spark your interest?

The ‘Golden Quarter of Retail’ is one of the most profitable periods of the year, but the cost of living crisis could mean retailers struggle in 2022. What can be done?
Are you already planning your 2023 retail operations strategy? This is how you could future-proof your operations with the help of RFID for retail.

Planograms are a key part of running a retail store. In simple terms, they dictate the what, where and, the how many of products on the shop floor.  

This article explores planograms, the challenges they present and how retails ongoing digital revolution along with artificial intelligence is changing planograms as we know them. 

What is a planogram?

 

   A planogram defines the location and quantity of products to be placed on display. They essentially function as blueprints for all merchandise within a store.

 Alongside the visual merchandising element, planograms aim to optimise article availability and thus specifically stimulate sales.

So, a store planogram has two aspects: 

 

1 – The Merchandising: which articles are presented on the sales floor and how (visual merchandising) 

2 – The detailed quantities for individual colour and sizes (availability optimisation) 

 

For example, a planogram might state where a formal shirt is displayed on the shop floor. The planogram will also state what quantities should be displayed, specific to different sizes and colours. So the planogram may state 3 mediums, 2 smalls, 2 larges and 1 extra-large are available on the shop floor, and so on. 

Ideally, merchandising and planograms go hand in hand: customers are inspired by the presentation and then, their desired product is available in the matching size. The reality, however, often paints a different picture.

Planogram – Merchandising

AI Planograms - Merchandising

Planogram – Quantities and Priorities

AI Planograms – Quantities and Priorities

Visually appealing and available in relevant sizes

What are the challenges of setting and maintaining a retail planogram?

 

Breaking this down, there are two questions that retailers face:

 

1) How do you define a planogram for my stores with a suitable size distribution?

The first question can be a challenge for retail depending on your definition of suitable. The reality is simply that manually creating and defining different size distributions for every single product is incredibly time-consuming and rarely worth the effort. This means generally stores will have a single set size distribution or ratio for every product in the store. This certainly could be worse, but it could (and can) be better….

 

2) How do you maintain the planogram on the shop floor? I.e. how to ensure that the products on the planogram are always on the shop floor

This, on the other hand, is a major challenge for retailers. What good is a planogram if it’s not adhered to? For example, if a planogram states that a size XL should be on the shop floor at all times but it is missing due to inaccurate or slow replenishment/refill,  and a customer who needs that size can’t find it, more often than not that sale is lost.

There are two ways steps that go a long way to fixing this:

  • Use a more specific and data-driven planogram in the first place (What we’re going to explore now)
  • Having a better replenishment process in the store. (Like this one)

How does AI change the planogram?

 

Manual maintenance and adjustment of specific planograms is rarely a realistic option for retailers, especially when it comes to specific size distribution for individual products and stores. 

By utilising artificial intelligence and machine learning procedures, it is possible to automate this process to define a precisely optimised size distribution for all articles across the store. 

Not only does this save an enormous amount of planning time, but it also addresses the ongoing dynamics in individual stores. The self-learning system adapts to possibly changing conditions and continuously optimises the plan.

  • Produces automated planograms based on sales data
  • Produces optimised planograms for individual products
  • Produces optimised planograms specific to the individual store 
  • Constantly adapts and optimised the planogram based on new data  

AI planograms in action with the Detego platform

If this all sounds theoretical, its not.

During the operational process in the store, Detego InStore also supports the store personnel at several occasions: The software offers two parameters that provide information about article availability at any time and therefore represent important KPIs:

  1. On-floor availability: The percentage of all available articles that are currently displayed on the sales floor
  2. Planogram compliance: Provides information on how well the planogram with its individual size distribution is implemented on the sales floor

If one of the two parameters fall below certain threshold values, store staff needs to action: In addition to classic ERP systems, Detego InStore offers a finer level of granularity in the stores, by telling store staff that certain articles are available in the backroom but not on the salesfloor and therefore need to be refilled to comply with the predefined planogram.

Retailers benefit from a complete process for the planning and implementation. Another advantage: Refill advices in the app are sorted such that the search in the back room is made as efficient as possible by minimising walking routes.

Detego Platoform Replenishment using AI Plannogram

With AI planograms, shelf space is used for top sellers and is not wasted on sizes that are rarely or never bought. With its self-learning components, the Detego platform for the store makes a suitable proposal for all sizes and facilitates implementation in daily processes – including relevant KPIs for measuring performance. And if a certain size is not available in one store, the platform offers an exact inventory view of surrounding stores – ready for click & collect.

Benefits for retailers:

  • Individually optimised AI planogram per store
  • Efficient use of shelf space according to bestsellers per store
  • Guided processes: from planning to refilling
  • KPIs to provide insights on operational excellence per store – in real-time

Benefits for consumers:

  • High on-floor availability for the locally popular sizes
  • Positive customer journey
  • Overall increased article availability through exact inventory data on the entire store network – including reservation options

Did we spark your interest?

Raconteur’s latest business report explores the modern landscape of the fashion industry, in particular, its current main issues and concerns. Chief amongst these is the issue of sustainability. It is approached and analysed from multiple angles in the report, including a piece from our partners Avery Denison on the use of RFID-enabled supply chain visibility to create a sustainable circular economy.  Elsewhere the report also goes into the sustainability of the current returns culture and how retailers are struggling to manage.

Our highlight is a thought-provoking article on how the fashion supply chain requires a tech makeover. It describes how the fashion supply chain has waned under the pressure of its growing complexity, and digital technology has the capacity to alleviate these issues, yet due to a ‘culture of resistance’, retailers are reluctant to embrace technology as a way to solve the issue. Although we see a number of these issues identified in the article, there doesn’t appear to be too  much direction on how to solve them. The article does, however, highlight how the current growth in the market is dominated by companies developing on the back of newer technologies such as AI and the cloud. Luckily at Detego, we combine these technologies with RFID to supply retailers with the real-time data required to successfully optimise modern supply chains.

Find out about all of this and more by downloading the report below:

Alternatively, contact our team today for a more in-depth discussion.

The Detego Platform enables fashion retailers to reinvent their physical stores and supply chains with intelligent stock management, item-level transparency and innovative methods of consumer engagement in stores.

“We’ve implemented RFID across our business in the US and UK and that’s actually really turning into money”

Charles Bergh – CEO Levi Strauss

Watch the video below of our customer Levi Strauss’ CEO, Charles Bergh, discussing the brand’s success and growth, particularly in relation to their large-scale RFID roll-out. He explains the ‘instant clear visibility’ that RFID provides, and how retailers now have the means to reduce the loss of sales due to article availability.

Detego and Levi’s partnership continues to grow as we roll-out RFID across their store network. With omnichannel retailing being a key strategy of Levi’s, our Detego InStore Lean Edition is providing the building blocks of successful store operations with optimal product availability, stock accuracy and efficient in-store processes.

Watch video below (start at 3:30mins)

Watch CNBC’s interview with Levi Strauss CEO Charles Bergh following IPO from CNBC.

Watch CNBC’s interview with Levi Strauss CEO Charles Bergh following IPO from CNBC.

“We’ve implemented RFID across our business in the US and UK and that’s actually really turning into money”

Charles Bergh – CEO Levi Strauss

Did we spark your interest?

Retail software specialist, Detego, will showcase three of its software solutions at EuroCIS, taking place from 19 – 21st of February 2019 in Düsseldorf, Germany. Visitors to Europe’s leading trade fair for retail technology can experience Detego’s market-leading solutions for the fashion retail industry, including real-time inventory intelligence and pioneering IoT and artificial intelligence (AI) projects. The live demos being showcased will be part of an impressive booth setup (Hall 9, booth #C04) which showcases the future of physical retail stores.

For inventory management of the store, Detego offers the InStore Lean Edition which meets the demands of the fashion retail industry for a quick-start solution into the digital store. Offered as a SaaS (Software-as-a-Service) solution with cloud hosting, retailers benefit from high inventory accuracy and consistent article availability at low cost. This is possible through fast and accurate stocktakes and automated replenishment processes, bringing long-term benefits to fashion retailers and most importantly, delivering quick results. The app-based solution can be active within hours and has a clear path of scaling to ensure rapid deployment and an easy functional extension to the Detego InStore Full Edition. “More and more fashion retailers are living by the mantra of ‘keep it simple’ for their RFID implementation which is exactly why we successfully implemented across the world the Detego InStore Lean as an ‘out-of-the-box’ SaaS-based RFID solution.” Says Kim Berknov, Executive Chairman of Detego.

The fitting room is the most important place in the entire store when it comes to purchasing decisions being made. This means that it’s crucial to provide support and additional services for customers. Detego’s Smart Fitting Room provides product recommendations, such as matching items available on the sales floor that can be brought directly to the fitting room by sales staff via a “call-to-assist” button. The customer can gain access to the benefits of e-commerce by looking up other products, checking for availability, reserving articles or having them delivered directly from the store to their home. Links to videos or social media feeds can also help. These value-adding services are what continue to drive consumers to shop in-store.

Answering as many questions as possible for shoppers through AI, Detego’s chatbot supports the sales personnel and bridges waiting times for customers until there’s a salesperson available for individual service. The virtual store assistant accompanies customers throughout their entire shopping experience and provides additional support in the vital decision-making process, such as making product recommendations and earmarking other popular items, bestsellers, discounted articles or product variants. The AI capabilities are not just limited to the chatbot itself, but also work continually in the background by communicating with other systems in the store. The chatbot checks the actual availability of articles and compiles data about customer types and their preferred article combinations and choices. As a result, recommendations become more meaningful and personal and only articles immediately available in the store are recommended.

“We want to introduce fashion retailers to solutions that support them in their daily challenges,” says Dr. Michael Goller, CTO at Detego. “We can show how fashion retailers can positively influence buying decisions and how a digital fitting room or a chatbot help in the sales process, as well as witness how several global fashion brands have successfully adopted the Detego InStore Lean Edition.”