The Golden Quarter of Retail, approximately between October and December each year, is typically retail’s most profitable period. Shoppers are planning for the Christmas period earlier than ever–59% of consumers will plan gifts at least a month before the holidays–and Black Friday offers another opportunity for companies to maximise profits.
However, the Golden Quarter of Retail has been anything but golden in recent years. In 2020 and 2021, the Covid-19 pandemic affected Christmas footfall, and consumer spending has decreased from pre-Covid years. Between October and December 2021, sales of non-food items fell by 8% compared with 2019 levels, and now we are amidst a cost of living crisis.
When consumers were surveyed in early 2022, there was still some hope for this year’s Golden Quarter. Crucially, almost a fifth of consumers said they would increase spending in the same period in 2022 compared to 2021. The cost of living crisis has put a stop to this. With households increasingly tightening their pursestrings, this year’s Golden Quarter could be very different.
Importantly, though, if consumers are going to spend, they will begin spending early. Last October, retail sales grew for the first time in six months as consumers took to the high street early for Christmas gifts. It could be that, to space out purchasing, consumers once again begin shopping early in 2022. The expansion of the Golden Quarter of Retail to early October–or even September–means that there are additional opportunities for companies to maximise profit.
So, how exactly will the cost of living crisis affect the Golden Quarter of Retail in 2022? And what can retailers do in response?
How Bad is the Cost of Living Crisis?
The inflation rate in the UK has been steadily rising for the last year. In August 2022, the rate hit a record-breaking 10.1%, and experts predict it could rise to at least 13% later in the autumn. It’s not just the UK that has been affected, though–across Europe, annual inflation has hit 8.6%.
There are lots of factors that have impacted the incredible rise in inflation in Europe and the UK. The biggest of these factors is undeniably rising energy prices, caused by Russia’s war on Ukraine and the increase in energy demand after the Covid-19 pandemic restrictions were lifted. To put energy price hikes in perspective, natural gas prices rose 96% between January and July 2022 in the UK. In the same period, electricity prices experienced a rise of 54%.
As well as energy bills, the war in Ukraine is also affecting food prices and further disrupting supply chains–another major headache for retailers in the last few years. Supply chain disruption has increased the cost of other goods, including raw materials, which will also affect the price of consumer products this year and into 2023.
Evidently, the cost of living crisis is severe and bodes for a challenging winter for both retailers and consumers. Unfortunately, the rising cost of goods and household utility bills are affecting consumer spending. This won’t surprise analysts, who predicted back in January 2022 that retail sales would be at risk this year. At that time, a survey from Barclays revealed that 43% of consumers expected rising inflation to affect their spending and household budgets.
That prediction seems to have come true. In August 2022, card spending in the UK fell by 1.9%, with consumers cutting back on purchases of clothing, DIY, and beauty products. Analysts at J.P. Morgan have alerted retailers that the cost of living crisis has “only just begun,” and future spending this year could fall by 10% if there is no energy price freeze in the UK.
The retail sector has been particularly affected by the cost of living crisis. In fact, it is the worst-hit sector in Europe in 2022, down 38%; the FTSE 350 Retailers Index has also dropped by 33%. This, along with the potential for more inflation hikes in the coming months, means retail faces a challenging Golden Quarter.
The Golden Quarter of Retail: How It Will Be Affected in 2022
The most significant effect of the cost of living crisis won’t be a surprise: reduced consumer spending. We can already see this happening as households prepare early for a challenging winter. Not only are consumers cutting back on purchasing non-essential items, but they are also reducing their impulse buys, instead waiting for opportune times to purchase.
As a result, Black Friday could prove far more critical in 2022 than in previous years. In fact, 51% of shoppers say that they consider Black Friday a vital time to make money go as far as possible. So, while households may have reduced spending power, they are still planning on spending.
However, it’s also clear that consumers will be more selective about how they spend. As well as waiting for opportune moments like pride reductions, consumers may also be concerned about the quality of their purchases. We’ve already seen how sustainability has become a major factor in purchasing decisions over the last year. However, this could become more important when combined with the effects of the cost of living crisis.
Deloitte’s Sustainability and Consumer Behaviour Survey 2022 details how consumers are adapting their spending in light of environmental goals. The survey results highlight that people are embracing circularity and opting for more durable products. For example, over half of people (53%) have repaired an item in the last 12 months rather than replacing it. Additionally, 40% of people have bought second-hand or refurbished goods rather than new products. These decisions may not just be rooted in sustainability but also in reducing spending.
There is some proof already that shoppers are turning to preloved or second-hand goods specifically to combat the cost of living crisis. When asked why consumers buy second-hand items, 36% said they did it for sustainability reasons, while 32% said it was to cut costs. In particular, 35% of people who bought used products say it could make their money go further. Retailers are already taking advantage of this trend in anticipation of the Golden Quarter of Retail; earlier this year, fast fashion brand Boohoo launched their PrettyLittleThing resale site.
Aside from shifting consumer behaviour, inflation, and the subsequent cost of living crisis, will also impact operating costs for retailers. Rising energy prices will affect international retailers and smaller businesses, and the cost of raw goods may influence which products end up on shelves.
Despite pressures in the Golden Quarter of Retail this year, there is still cause for retailers to be optimistic. While 88% of shoppers say they are concerned or very concerned about the cost of living crisis, 91% of people who usually buy on Black Friday say they will be as engaged this year. Adapting to these shoppers–and their new spending habits–will be paramount if retailers are to see growth during the coming months.
What Can Retailers Do in Response to the Cost of Living Crisis?
It may appear that very little can be done to adapt retail strategy in the face of the cost of living crisis, especially when it’s set to impact every part of retail, from consumer behaviour to operating costs. However, there are still opportunities for companies as they prepare for the Golden Quarter of Retail. The extent to which companies can capitalise on lower consumer demand will depend on how well they can adapt their strategy and ride consumer trends.
In particular, there are three aspects retailers should prioritise as we go into the Golden Quarter of Retail in 2022: actual consumer demand, process efficiency, and supply chain visibility. Focusing on these factors will lead to an optimised retail strategy and greater chances of encouraging purchasing in the Golden Quarter of Retail.
Stock According to Demand
Preventing overstocking will be a crucial priority for retailers this winter. Excess inventory can represent an additional annual cost of between 25% and 32%, so knowing exactly which products and how much to stock will be imperative.
Paying attention to in-store and online consumer behaviour can help retailers determine which products will see more sales in the Golden Quarter of Retail. If retailers can quickly respond to changing behaviour, they will likely encourage consumers to part with their hard-earned cash during a difficult period.
Improve Process Efficiency
Operational efficiency is always vital, especially during a period of high retail costs. Preparing for the Golden Quarter of Retail will mean extracting as much value from current processes and labour as possible. Improving the efficiency of inventory counts will be paramount, as will reducing the amount of time staff spend searching for required products for customers on the shop floor.
Prioritise Supply Chain Visibility
Finally, retailers should seek to increase the transparency of their supply chains. Not only will this optimise processes by providing data on how retailers can adapt supply chains to reduce costs and increase efficiency, but it can also provide customers will valuable data on retail sustainability: something we know is becoming a significant factor in purchasing decisions.
How RFID Can Help Retailers Adapt to the Cost of Living Crisis
One piece of software connects these three focus areas: RFID technology. When retailers implement RFID tagging, they gain access to a wealth of data that can improve operational efficiency and ensure the shopping experience caters to consumer behaviour. RFID could mean the difference between a challenging Golden Quarter of Retail and a profitable one.
Firstly, RFID can improve processes in stores by reducing cycle count times by 96%. Workers are thus free to spend more time interacting with customers and building brand relationships, which can be a uniquely valuable task during a period of reduced consumer spending, offering returns into the future.
RFID technology can also increase stock accuracy to 99% from a global average of 60%-80%. This is paramount when retailers plan to stock particular products in response to shifting consumer behaviour. Improved stock accuracy can also reduce out-of-stocks, improving the likelihood of sales.
Finally, with RFID tags, products can be accounted for at every stage of the supply chain, offering unique data on operations. As retailers prepare for the cost of living crisis to endure into 2023, they must examine where cost-saving improvements can be made. This could mean changes to lower-cost delivery routes, which could also provide additional benefits to consumers in the form of faster shipping.
Though the Golden Quarter of Retail is set to be challenging this year, there are opportunities for retailers. However, responding to the cost of living crisis will require adaptability. This is a chance for retailers to invest in RFID technology to improve retail efficiency and cut operational costs.
Prepare for the Golden Quarter of Retail
Stock accuracy, on-floor availability, and improved supply chain visibility.
Book a demo with RFID to discover how our cloud-hosted RFID solution could help you maximise your profit during the Golden Quarter of Retail, even while navigating the cost of living crisis. Our multi-user app can provide intelligent stock takes and a smart in-store replenishment process. At the same time, you can effectively manage your entire store operations with real-time, item-level inventory visibility and analytics.
16. August 2023
13. September 2022
16. August 2022
We’re over mid-way through 2022, and despite optimism regarding recovery from the recent Covid-19 pandemic, this year has had its own unique challenges for retailers. Across Europe, rising inflation has impacted consumer spending, while supply chain issues have also been exacerbated by Russia’s invasion of Ukraine.
As a result, the retail sector is suffering from slow growth in 2022, which experts predict will worsen before it gets better. In the UK, retail is expected to grow by just 1.9% this year, accounting for inflation, compared with 3.9% growth in 2021. Globally, the retail sector will grow at 5%, half the rate of 2021.
With this in mind, many retailers will be looking optimistically to 2023. However, judging by early forecasts, there is still significant uncertainty in the growth rate for retail next year. In fact, according to some projections, the global retail industry growth rate is expected to slow to 4.8%.
These projections are concerning, but there are ways for retailers to capitalise on the meagre levels of growth in 2023, and that’s by putting in place a revitalised retail operations strategy for the new year. However, developing a successful 2023 retail operations strategy will require advanced knowledge of retail trends and flexibility in adapting brand operations.
Three trends are crucial for retailers when considering their future retail operations management: omnichannel retail, in-store technology, and the future of bricks-and-mortar retail stores. Finally, retailers can also look at how RFID for retail can help improve their operations strategy in 2023.
While the retail industry will undoubtedly see further disruption throughout 2022 and into 2023, taking time now to build a successful retail operations strategy can future-proof your operations and help you weather the storm.
What Does the Retail Market Look Like in 2023?
The retail landscape has changed significantly over the past three years. Covid-19 transformed customer behaviour, forcing retailers to adapt their strategies. So, looking to the year ahead, what are the most significant trends that will affect how retailers plan their 2023 retail operations strategy?
Omnichannel
One of the biggest trends to have affected retail in the last five years is the growth of omnichannel retailing. We’ve examined this trend in previous articles, but it will become more critical in 2023.
Data already shows that retailers must be considering omnichannel in any retail strategy. Research from Nielsen has revealed that 91% of FMCG dollar sales come from omnichannel shoppers, and furthermore, FMCG consumers who shop both in-store and online represent 86% of all consumers.
The trend is the same in other retail sectors. While 55% of all consumers say they choose not to shop online because they lack control over their purchase, 45% of grocery consumers still prefer to shop both online and in-store.
Brands can no longer plan their strategies solely around investing in their online brand–they must consider both in-store and online experiences, and plan additional fulfilment options for shoppers. This is even more vital as different channels come into play in the future, such as live-streaming shopping and social media shopping channels on apps such as Instagram.
In-Store Technology
While many retailers have already embraced the possibilities of in-store technology, in 2023, the trend is expected to become more mainstream as consumers’ expectations change. The traditional brick-and-mortar store of the past no longer exists; today, retailers need to provide interactive and entertaining shopping experiences to retain market share in a competitive retail sector.
For starters, consumers are increasingly seeking personalised experiences. 71% of consumers already say that they want brands to offer them personalised experiences, whether this is in-store or online. An even more significant percentage (76%) say they get frustrated when this doesn’t happen. However, in-store shopping is still the dominant retail channel; retailers shouldn’t disregard this when creating their 2023 retail operations strategy.
Technology such as Smart Fitting Rooms, powered by RFID, can satisfy the customer’s need for personalisation and ensure stores make the best use of innovative technology. Smart Fitting Rooms can respond to customers in real-time and display additional information about proposed purchases whilst upselling similar products, all from the fitting room.
However, it’s not all about personalisation. In-store technology could also improve customer experience in other ways, for example, by installing cashier-less checkouts and in-store virtual assistants. This will contribute to a positive shopping experience and keep customers returning.
According to McKinsey, by 2030, technology will affect around one-third of all retail tasks in the UK. Considering how the pandemic has altered consumer behaviour and the shoppers’ expectations, it’s clear that in-store technology will be a crucial driver of brand loyalty and opinion in 2023.
Brick-and-Mortar Stores
As well as embracing omnichannel shopping and fulfilment options, retailers should also be reconsidering the purpose of their physical stores. We know that consumers now want to be entertained while they shop; shopping has become less of an act or chore and more of an experience. In-store technology can make this possible, but it’s also about reconsidering the possibilities of brick-and-mortar stores in your 2023 retail operations strategy.
For example, many brands now utilise their physical locations not just as shops but as event spaces, too, or solely as community spaces. Vans is a primary example of this: their London and Chicago ‘House of Vans’ locations incorporate an art gallery, skate park, cinema, and live music venue, plus cafes and bars.
On the other end of the spectrum, some retailers are turning their physical locations into ‘dark stores’ or ‘ghost stores’ – advanced distribution centres that offer consumers the chance to pick up their orders from the curbside or dispatch products from closer to home. With consumers increasingly asking for different shipping options (59% of consumers are interested in click and collect shipping options), this should be a vital consideration in any 2023 retail operations strategy.
How Supply Chain is Changing
However, future retail trends won’t just affect the consumer experience. Supply chains have had a difficult couple of years; Covid-19 put significant pressure on retail supply chains, and consequently, they are innovating rapidly.
Supply chain disruption throughout the Covid-19 pandemic was extensive. Over half of supply chain management professionals say they experienced ‘moderate disruption’ during the pandemic. However, despite this, many retailers (62%) still have limited supply chain visibility, while 15% say that their visibility is restricted to production.
Supply chain problems during the Covid-19 pandemic have uncovered a pressing need for greater visibility and control over supply chains to prevent the same disruption from occurring in the future. To future-proof retail operations, supply chain visibility is a crucial element for retailers to consider within their 2023 retail operations strategy.
In addition to visibility, transparency is also vital. Since 2017, the number of online searches for sustainable goods has increased by 71%. Consumers now demand that retailers make sustainability a priority, in their products and the production process.
Not only does this mean switching to environmentally-friendly packaging where possible, but also being transparent about retail supply chains. As we mentioned in our recent article about sustainable fashion, supply chains can significantly impact sustainability: retail brand Patagonia state that 95% of their entire carbon missions come from their supply chain.
As a result, any brand’s 2023 retail operations strategy must consider how to make supply chains more transparent, both as a way to signal to customers that sustainability is a priority, and to identify areas of environmental improvement within the supply chain.
RFID for Retail: How Can it Help Streamline Retail Operations Management?
So, when creating a 2023 retail operations strategy, brands should be aware of how they can submit to consumer trends and changes in supply chain strategy. Thankfully, one solution covers both of these things: RFID for retail.
Firstly, when retailers implement RFID in stores, it can offer retailers up to 99% inventory visibility, compared to an average of around 60%-80% visibility. Inventory visibility is key to omnichannel retailing, as brands need a high-level view of all the stock they have and where it is, whether in a warehouse, distribution centre, or on the shop floor.
Similarly, RFID for retail can help retailers expand personalisation in stores and anticipate the trend towards increased automation and technology in retail. In virtual fitting rooms, for example, RFID technology can help display stock levels of items in stores and online and encourage customers to buy.
We’ve also mentioned how retailers should consider offering consumers additional shipping options like pick-up-from-store or ship-from-store. There’s certainly value in adapting physical locations to become ‘dark stores’, but this is only possible if retailers have in-depth data on their stock. RFID for retail can provide this.
Finally, over the last two years, supply chain disruption has exposed the need for greater visibility in supply chains. Only with up-to-date data can retailers strengthen their supply chains for possible future disruption. RFID technology can offer retailers advanced data about supply chains and inventory, giving senior retail operations management teams knowledge of weak points in supply chains.
Retailers can also harness RFID data to explore the environmental impact of supply chains. Retailers who want to prioritise their sustainability practices can also opt to publish this data, increasing their reputation for sustainable retailing.
Why You Should Invest in RFID for Retail in 2023
We’ve outlined how RIFD for retail can help expand and future-proof your 2023 retail operations strategy, but why is now the right time to implement the technology?
Global RFID adoption has significantly increased in recent years; in North America in 2020, 93% of retail chains were using the technology, up from just 34% in 2014. As a result, the technology is said to have surpassed the ‘tipping point’ where RFID for retail technology is now widespread.
This year alone, major retailers such as Walmart and Nordstrom have announced that they will be incorporating RFID into their future retail strategy, starting at the end of this year. Similarly, next year Michelin will finish incorporating RFID technology onto all of its tyres.
Increased adoption of RFID globally has also significantly impacted the cost of the technology. The average cost of an RFID tag has fallen by 80% in the last 10 years. Similarly, the cost of RFID readers has also dropped by 50%. In that time, the accuracy of RFID technology has doubled, while the number of possible use cases has soared. Now, McKinsey predicts that RFID for retail can unlock 5% top-line growth for retailers.
With retailers increasingly grappling with frequent supply chain disruption and consumers asking for new ways of shopping, there has never been a better time to implement RFID into your 2023 retail operations strategy. This technology will improve your retail operations management and ensure that your future retail strategy maximises profits.
Retail operations RFID management software
Stock accuracy, on-floor availability, and omnichannel applications in stores.
Book a demo with RFID to find out how our cloud-hosted RFID for retail solution could help improve your 2023 retail operations strategy. 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.
16. August 2023
16. August 2022
19. July 2022
While the effects of the Covid-19 pandemic may be lessening, retailers still face plenty of challenges in 2022. Supply chains remain volatile as countries around the world experience new waves of Covid-19 infection, and companies are also struggling with worker shortages.
In addition to this, inflation is affecting retail operations. Businesses are seeing price hikes for raw goods and logistics, and this inevitably means that consumers are going to see the cost of products rise in-store and online.
Despite the evident challenges, though, there are still opportunities for retailers to grow this year. In the United States, retail sales are expected to grow by between 6% and 8% in 2022, though there will be a shift towards services rather than material goods. While inflation is driving up living costs, consumers still want to spend their hard-earned money, but there may be fewer spontaneous purchases.
To capitalise on the forecasted growth this year, retailers must be prepared to make changes to their operations and retail strategy. Firstly, businesses need to focus on finding solutions to supply chain pressures, which may require investment in technology such as RFID for retail. Secondly, retailers need to be aware that customer spending may decrease this year, and as such, building customer loyalty is paramount.
The solution to both of these could be cloud-based inventory software. More than just a way to track stock throughout the supply chain, cloud-based inventory management offers a 360-degree view of your operations, helping you pinpoint the areas that need more help going into 2022.
Retail in 2022: The Challenges
It’s tempting for retailers to think that, because the pandemic is having less of an impact on store footfall and spending now, the retail world is back to normal. Sadly, this is not the case. There are still distinct challenges that retailers must tackle in 2022, the first of these being continued supply chain disruption due to the pandemic.
An industry report released in March 2022 found that 57% of retailers said that supply chain disruptions and shortages were the major supply chain challenge for 2022. This is a significant change – for the last nine years of the same survey, hiring and retaining qualified workers came in as the top challenge facing retailers.
While many retailers expected supply chain disruption to have dissipated in 2022, companies are still dealing with fallout from the Covid-19 pandemic. An additional problem is rising shipping costs, which have steadily increased throughout 2021 and remain high at the beginning of 2022. Strikingly, the container freight index, which reflects the cost of shipping goods via a standard shipping liner, reached a high of $10,839 in September 2021. This is ten times higher than just two years before.
As shipping costs and customer demand increase, retailers are struggling to keep up – and it’s also compounding inflation. 30% of companies expect rising transport costs to limit their exports in 2022, while 29% of companies are worried about rising inflation as a result of supply chain disruption.
Another effect of rising inflation is the cost of goods. As inflation hit a 39-year-high in December 2021, businesses were forced to raise prices in order to cope with increased logistics and production costs. Overall, the cost of goods increased by 7%. More specifically, apparel prices leapt by 5.8% while household furnishing costs increased by 7.4%.
Faced with the rising cost of living, consumers are also changing their spending habits. As the price of items rises, consumers are choosing to hold off on purchases or change their buying habits completely. For example, retail sales in the US grew 0.3% in February, below the 0.4% forecasted. The biggest dent was in online shopping, which dipped by 3.7%. All of this means that retailers will have to find new ways to connect with customers and increase brand loyalty despite rising costs.
Finally, the ‘Great Resignation’ is also set to affect retailers in 2022. We covered this in a recent article, but in short, businesses are being forced to adapt operations as workers are leaving their jobs at a record rate. This is particularly noticeable in the retail industry. 720,000 retail workers quit their jobs in August 2021 alone, and 96% of retailers say they are struggling to find store employees.
The Opportunities for Retailers
There are undoubtedly challenges for retailers in 2022. However, there is also opportunity – especially in the digital space. We’ve already mentioned that retail sales are expected to grow between 6% and 8% this year, but online sales growth will be even higher (11% to 13%). Retailers who prioritise digital growth and embrace technology like RFID for retail will find that there is still space to grow even during a challenging year.
There is also opportunity in recent digital trends like NFTs, which we examined in an article last month. There was rapid growth in NFT production in the latter half of 2021, and the market is expected to continue growing throughout this year. Retailers who have already embraced NFTs, like Adidas, have seen strong sales off the back of the technology. Other retailers like BoohooMAN see the technology as a way to cement their brand identity and reputation.
But let’s not forget about physical stores. Innovative technology can also provide a way for retailers to set their brick-and-mortar stores apart in the post-pandemic world, and offer a new opportunity for growth. Experiences like virtual reality, in-store app functionality and personalised fitting rooms can all elevate physical stores and draw in consumers that are looking for a different in-store experience.
48% of consumers say that they choose to shop in-store because they simply enjoy the overall experience of shopping in person. A further 24% say they like to experience products before purchasing. All of this points to in-store experiences being a growth opportunity for retailers in 2022, as long as they embrace the technology needed to implement unique experiences.
Ultimately, technology is the solution to overcoming the challenges in the retail environment in 2022. Businesses are undoubtedly aware of this; 31% of retail leaders say that they expect to implement more in-store technology in 2022. But what kind of technology should this be?
Well, retailers are also clear on that, too. 34% of retail leaders admit that investment in operational technology to automate processes is a priority for them this year. This includes innovations like cloud-based inventory software. But how can this allow businesses to bounce back in 2022?
Overcoming the Challenges with Cloud-Based Inventory Software
Though retailers are evidently aware of how operations technology like cloud-based inventory software could help them in 2022, many still have not invested in it. The current adoption rate of cloud software is 40%, however, this is expected to rise to 86% over the next five years. This is still the highest adoption rate for all retail technologies, including Internet of Things and robotics, yet there are still too few retailers taking advantage of it.
Cloud-based inventory management is hugely important to recover from the Covid-19 pandemic and tackle sustained problems such as supply chain issues. Despite retailers seeing a return to brick-and-mortar stores – they will continue to remain popular among consumers – a successful e-commerce strategy is key to performing in 2022.
All retail categories are predicted to see e-commerce growth in 2022. This is even more pronounced for apparel and accessories, which was the fastest-growing e-commerce category in 2021 (15.4% YoY growth). Elsewhere, auto and parts will also see significant growth in 2022, capitalising on their 30.1% YoY growth in 2021.
However, for retailers to take advantage of e-commerce gains, they must find a solution to the retail challenges that will inevitably persist throughout 2022: supply chain disruption, rising costs, and finding new ways to connect with customers.
Primarily, cloud-based inventory software offers a way for retailers to better understand their supply chains. As such, retailers who take advantage of this software can gain real-time insights into issues with their stock and react accordingly. By utilising cloud-based inventory management tools like RFID for retail, retailers know exactly where stock is at all times and can improve the flow of goods between distribution centres and stores.
Real-time data can also help retailers boost profits, which is more important than ever during a period of rising costs. As well as showing retailers where products are in their journey through the supply chain, cloud-based inventory software can also help prevent out-of-stock notices in stores.
Stockouts are particularly rife at the moment as supply chain issues hamper on-time deliveries. In fact, stockouts were up 250% in October 2021 compared to pre-pandemic levels. This can prove a major loss to retailers, totalling upwards of $1 billion per year. The in-depth forecasting from cloud-based inventory software can tell retailers the products that are selling particularly well and inform retail executives of exactly when new stock should be ordered to prevent losses on the shop floor or online.
Finally, RFID for retail can allow retailers better insights into their own customers, learning about their buying habits and being able to flexibly change their operations to suit trends. Cloud-based inventory software can also help implement personalised experiences in stores, whether that’s alongside an app or in virtual try-on rooms – and we know that customers are searching for new experiences in stores to keep their visits interesting.
Boosting Retail Performance with Cloud-Based Inventory Software
It’s clear that cloud-based inventory software can offer a solution to many of the issues plaguing retailers in 2022. In fact, many retailers are already aware of the benefits of the technology and have actively adopted it in their operations in recent years. Since then, they’ve reported significant benefits to using cloud-based inventory management technology.
47% of retail executives say that cloud adoption has improved their data access and analysis. The second and third most popular benefits are reducing costs and liabilities (42%) and improving efficiency (38%). Just 8% of executives say they have experienced no benefits of cloud adoption.
We know that cloud-based inventory software offers better supply chain visibility than other, outdated modes of inventory management. But instantaneous data can do more than just resolve supply chain issues – it can also help retailers implement omnichannel services like click-and-collect and ship-from-store. With full stock transparency, retailers can streamline all of their services, ensuring that customers can buy products when and how they wish to.
When combined with cloud-based inventory software, RFID for retail can also help transform the brick-and-mortar store, which we examined in a recent article. For example, 31% of customers want store employees to actively assist them with out-of-stocks. With a cloud-based inventory management portal, employees can assist customers on the ground in stores with just an app. They can check when new shipments of products are likely and also guide the customer to similar products in-store, boosting sales potential and leaving customers more satisfied with their store visit.
There is undoubtedly a wide range of benefits to implementing cloud-based inventory software. Whether you’re looking ahead to future prospects like digital stores or increased personalisation or just looking for a way to get ahead of supply chain disruption, this is the right time to invest in cloud-based inventory management.
Cloud-based RFID Inventory Software
Stock accuracy, on-floor availability, and omnichannel applications.
Book a demo with Detego to find out how our RFID cloud-based 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.
16. August 2023
19. July 2022
27. June 2022
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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.
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27. June 2022
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.
Omnichannel Retail
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.
Omnichannel Retailing
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.
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Detego and Microsoft partnered on this retail success story.
How an iconic British fashion brand and retail store chain successfully increased the availability of items in-store while improving the customer experience.
“It was also around gaining visibility for our omnichannel journey. If you look at those as different challenges, RFID provided a solution that enabled us to use technology to enhance all that.”
Complete the form below to download the case study.
This year’s Christmas period will be unlike the ones before. With retailers just recovering from or still grappling with supply chain issues and facing potential staff shortages caused by Coronavirus and other extenuating circumstances, it’s going to be more difficult to hit yearly KPIs.
However, the retail forecast for the final quarter of the year still looks promising. Deloitte predicts that holiday sales will grow by 7% to 9% compared with the same period last year, and retailers should focus on taking advantage of consumer demand this Christmas. While retailers can expect high demand for products this year, there are additional ways you can improve store performance.
Not only do physical retailers have to compete with online purchases in the run-up to Christmas, but there is also increased pressure to make up for any lost performance from earlier this year due to the dual crises of the pandemic and supply chain problems.
There are many retail solutions for improving store performance, ranging from implementing omnichannel marketing to improving customer service. Most store solutions come down to accurate inventory counts. Knowing the stock you have, where shipments are, and what products you can offer the consumer will inevitably improve the customer experience and your overall store performance this Christmas. For this reason, you should consider retail solutions like inventory software as part of a strategy to improve performance.
Our suggestions for store solutions are just a start. To successfully improve store performance this Christmas, retailers should take a 360-degree view of their operations, from their supply chain to stock replenishment and customer expectations of their store. Inventory software like RFID tags will go a long way to tackling some of these issues.
While a switch to digital inventory solutions will take time and training to implement successfully, it’s a long-term solution that will protect retailers against future supply chain issues and ensure optimal customer satisfaction in your stores.
A difficult Time for Retailers
If your store is struggling to reach its KPIs this year, you’re not alone. Supply chain issues – partly caused by the Coronavirus crisis – have made it more difficult for stores to get the stock they need this year, leading to reduced sales and performance.
These issues exist all the way through the supply chain and are not limited to one geographical region or country. Around 38% of ocean freight was delivered on time this year, half of last year’s total. Consequently, prices for raw materials and delivery are rising, on top of increased demand from retailers for their stock.
Stores experiencing a drop in their stock availability are already witnessing the effects on their total profits this year. Maternity wear retailer Seraphine reported lower stock holdings from July onwards, which meant they couldn’t satisfy customer demand in-store. Consequently, the retailer now predicts a 15% reduction in profits compared to last year.
As demand for products increases in the run-up to Christmas, many retailers are consequently over-ordering or placing retail orders too early to get their stock inventory back to normal levels. But this is far from an ideal retail solution and creates issues further up the supply chain for raw materials manufacturers.
Stores that can anticipate stock issues and respond to them quickly will have a better chance of weathering the supply chain crisis and improving their performance – which is more important than ever as the retail sector prepares for increased demand over Christmas. To do this, retailers should take advantage of inventory software.
The importance of inventory accuracy
There are many ways to improve store performance, from focusing on the overall customer experience to automation and omnichannel marketing. Most of these store solutions have in common, though, is the problem of accurate stock inventory. If retailers are going to recover from the ongoing supply chain crisis successfully, then a 360-degree view of operations and stock levels is crucial – and inventory software can help you do this.
Tracking and cataloguing store inventory isn’t limited to the shop floor. Retailers must have a broad view of their inventory from the end of the manufacturing process to when a shipment arrives at the store warehouse. Tracking such a large amount of stock – for some retailers, this can mean processing 70,000 items in just a few months – requires its own digital solutions, which can take time to implement. However, the impact of such inventory software is significant.
Missing stock on the shop floor is a massive problem for physical retailers, especially in the wake of supply chain issues. The digital age has transformed customer expectations, meaning that physical stores must compete with online retailers. Now, if customers are disappointed by product availability in-store, their solution is to order the same product online.
To put this into perspective, 75% of millennial shoppers leave a store without a purchase instead, buying that item online. The main reason for this? It’s encountering out-of-stock items in the store.
Accurate stock inventory is also key to providing a successful omnichannel customer experience. Especially in the busy Christmas period, customers will be looking for flexibility in the shopping process, including options to collect their products in-store, order online for in-store pick-up, and even in-store ordering to their home. This omnichannel approach to the shopping process inevitably increases the chance of a successful sale and makes the entire experience effortless for the customer.
In all of these cases, inventory software is the tool that will enable retailers to have a broad view of their entire stock inventory, from warehouse to shop floor. Technology like RFID can transform your strategy to retailing by making it easier to perform stock counts, track products across the shop floor, and make informed decisions about your retail strategy
Why RFID is thriving
Radio-frequency identification (RFID) has fast-evolved from a technology used at the fringes of retail, to a global technology that is delivering business results to retailers everywhere.
According to a recent study published by Accenture:
- The majority of retailers (80%) said the benefits of RFID cannot be replicated by another technology.
When fitted to a product at the manufacturing stage, an RFID tag will send continuous data to a reader as long as it is in range. This tag removes the need for laborious stock taking with a barcode scanner, as the reader will scan everything in range and catalogue it – even if the product is in a boxed shipment.
Used alongside inventory software, RFID can produce accurate stock counts, track stock from the factory to the warehouse, and work alongside other technology in-store to create a personalised experience for customers.
With accurate stock counts becoming more important as the busy Christmas period arrives, inventory software like RFID is a valuable store solution that can easily improve your store’s performance.
How Inventory Software Can Improve Store Performance
With a digital inventory solution like RFID, retailers can solve the problem of inaccurate stock counts, which become even more important during times of increased consumer demand. It can also improve the omnichannel customer experience by giving consumers more transparency about where products are and how they can purchase them – all of which will improve your store performance in the long run.
Keeping Shelves Fully-stocked
We know that one of the biggest problems for retailers is keeping shelves fully stocked and the consequences of out-of-stock products. While you can expect some stock disruption with supply chain problems, RFID can alleviate some customer pain by ensuring shop floors are as full as they can be under the circumstances.
This digital store solution will allow you to take frequent inventory counts – up to twice a day, compared to the average of once or twice a year. When used with inventory software, you can also get on-time recommendations for which products to refresh on the shop floor, ensuring that no customer ever leaves disappointed.
This digital store solution will allow you to take frequent inventory counts – up to twice a day, compared to the average of once or twice a year. When used with inventory software, you can also get on-time recommendations for which products to refresh on the shop floor, ensuring that no customer ever leaves disappointed.
Improving the In-store Customer Experience
Nowadays, customers want more from their physical stores. Whether that’s more personalised recommendations from staff, virtual shop assistants, or interactivity in-store, RFID can help you do this.
RFID tags can work with other innovative technology like smart fitting room mirrors to offer personalised product recommendations for customers while shopping in your store. When a customer takes a product fitted with an RFID tag to a fitting room, the product’s unique code is read, and the product is displayed on the smart mirror, alongside similar products that the customer may like to try. There may also be the option to request products while in the fitting room, making the shopping experience more seamless for the consumer.
Producing Accurate Data
For retailers to successfully navigate the increased demands of the Christmas period and ultimately improve performance, accurate data is crucial. RFID is a digital tool that provides real-time data about stock levels and makes suggestions about managing inventory better.
Instead of relying on historical data for your in-store stock decisions, RFID gives you the tools to make informed decisions about your store. From stock availability to automated refills and data on dwell times, this inventory software will improve performance in your store through more accurate insights.
Offering Omnichannel Retailing
It’s no longer a battle between brick-and-mortar stores versus online, but most retailers are a hybrid of both. This means that your stock inventory needs to be more precise and accurate, reflecting both your in-store availability as well as online, so customers can get exactly what they want whether they’re in-store or at home. The key to omnichannel retailing is ensuring there are enough options for your customers – whether they want to pick their product up in-store, order it to their home, or return it to a different store, there should be a retail solution for that. For this to work, retailers need an accurate view of their stock counts and where stock is at all times. By utilising RFID with all-in-one inventory software, you can achieve up to 99% stock accuracy, meaning the customer is never disappointed by out-of-stock notices or unavailable shipping.
Why You Should Invest in Inventory Software now
Retailers gear up for increased consumer demand, inventory software and RFID can be a valuable retail solution in the run-up to Christmas by eliminating labour-intensive stock counts and improving stock visibility from warehouse to shop floor.
Retailers are increasingly investing in inventory software like RFID to streamline their supply chains. In the US, investment in retail technology has reached $8.6 billion, reflecting its value as a store performance solution. It’s a similar story in the UK, where technology like inventory software could uplift £21 billion to the retail sector.
Not only will more accurate inventory information make your operations more effortless and reduce labour requirements, but it will inevitably improve store performance. You can use a store solution like RFID to strengthen omnichannel retailing and provide increased personalisation in-store, leading to more opportunities for sales. Ultimately, RFID is an ideal retail solution for periods of increased demand, such as the run-up to Christmas.
Detego is the only all-in-one retail solution on the market, utilising RFID alongside a complete end-to-end SaaS platform to improve your inventory accuracy. From stocktaking and stock replenishment to tagging, our inventory software can handle it all, reducing the chances of human error and increasing opportunities for sales in your stores
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.
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27. June 2022
Managing inventory levels is more vital now than ever before.
At the same time that out-of-season stagnant stock sits untouched in warehouses, desirable inventory is increasingly becoming short in supply on shopfloors. In fact, when slow-moving stock can still make up to 40% of a retailers inventory, it seems strange that the current shortage of goods is reportedly here to stay. But taking this juxtaposition into account, it’s not hard to predict that many more retailers will be feeling the strain of simultaneously being overstocked and out-of-stocked as the holiday season approaches.
At a time when struggling businesses could stand to increase revenue drastically, they will have to be more strategically minded, optimising the distribution of limited inventory and harnessing emerging opportunities to turn obsolete stock into profit. In order to do this, however, retailers will need to actively seek to improve their loss prevention processes as every item of stock – even obsolete inventory – becomes increasingly more vital to lifting the bottom line.
The Impact of Inventory Loss in the Post-Pandemic Environment
Due to the heightening imbalance of desirable and undesirable stock, it is no exaggeration to say that within the grand scheme of a retailer’s operation, even a single piece of inventory can drastically impact a business’s opportunity to make money or lose it.
For instance, with the circular economy booming, the slow-moving stock is increasingly being repurposed to recuperate costs, while inaccurate real-time product availability of popular goods could negatively hinder a retailer’s ability to build omnichannel relationships with customers.
That is why shrinkage – when a business loses inventory for reasons other than sales – is a driving issue for retailers and one that looks to exasperate the inventory challenges already at play.
Last year, shrinkage cost the US retail market $61.7 billion, and as supply chain disruptions continue, retailers will increasingly need to tighten their control over assets at an item-level scope, especially now that their distribution strategies are influenced by localised demand for particular product categories, styles, and sizes as customers continue to expect personalised and immediate services.
But to facilitate this level of customer service, improvements to inventory management must be made that prioritises precise inventory tracking and agile loss prevention.
Causes of Shrinkage are Becoming Increasingly Complex
To improve their loss prevention strategies, retailers must get to the root of the current shrinkage causes that are growing more wicked in nature due to inventory touch-points multiplying at speed. Here we explore the most coming reasons for stock loss in retail and why they are challenging businesses today:
- Returns Fraud
Social media has contentiously given rise to the trend that it’s “unfashionable” to be photographed in the same outfit twice, leading to a growing community of serial returners who consistently purchase fashion products, wear them once or twice and then return them. And as social commerce grows –generating more and more omnichannel touchpoints – so do the opportunities for fraudulent returns within this growing trend. Last year, scams involving the returns of products already cost retailers $43 billion, and in this year’s National Retail Security Survey 2021, retail companies reported that multichannel sales had created the most significant increase in fraud this year.
As customers continue to purchase online and then pick up orders in-store and vice-versa, the challenge for retailers is that they must cater to the growing demographic of digitally literate consumers who now move between online and physical touchpoints whilst implementing inventory traceability. Because if not adequately managed, omnichannel can open up opportunities for stock loss, with fraudsters taking advantage of any discontinuity between online and offline returns processes.
2. Shoplifting
Even with mandated closures for much of the year, 2020 saw UK retailers lose over £770 million from shoplifting alone. So now, with physical stores firmly back open, shoplifting has re-emerged as a critical challenge of retailers who are hoping to turn these spaces from loss-leaders to optimal environments for customer engagement.
Criminal activity in stores, however, not only poses a threat to the bottom lines of these operations but can also negatively impact the experiences of customers and employees. Especially now that many companies have begun to take a stronger social stance towards the wellness of their workforces. Retailers must from now on empower employees to handle shoplifting efficiently, confidently, and safely.
3. Employee Theft
Global employee theft is predicted to cost retailers 2.9 trillion annually and accounts for 28% of inventory loss, with physical goods most likely to be stolen from the workplace. Viewed as an epidemic within the retail ecosystem, there are many diverse existing approaches to loss prevention, from behavioural focused strategies such as staff recruitment and training processes to physical deterrents such as CCTV and POS data mining.
Product visibility is non-negotiable for retailers embracing omnichannel
The challenge for retailers who are tackling employee theft, however, is in how to build a connected and holistic solution that improves workforce attitudes and culture towards stealing, reduces opportunities for theft and at the same time incentivises them to become active players in inventory protection.
- Damages
It goes without saying that damages to inventory are inevitable. As goods that are often journeying to far-reaching locations, wear and tear in transit is to be expected and – although not ideal – retailers commonly anticipate this reality and reflect it within their financial accounting. At a time, however, where in-demand stock is in short supply, damages to assets is being viewed as a growing nuisance that, whilst wholly unavoidable, should be dramatically reduced.
But it is the reporting of damaged goods that should be a significant concern for businesses. Again, as consumer sentiments move towards fast fulfilment, retailers will need to have precise real-time insight into stock availability, and its location, yet unaccounted for damaged items can sabotage a business’s ability to carry out effective customer services.
- Administrative and Supplier Error or Fraud
Error or fraud in the reporting of inventory levels is a severe problem that multiple stakeholders can enact at any given time. It is vital to a retailer’s bottom-line that delivery of goods from vendors is 100% correct at the time of receipt. Whether intentional or not, incorrect data from suppliers could have knock-on effects throughout the supply chain down to stocktake on a shop-floor and incorrect e-commerce order fulfilment.
At the same time, what could seem like minor mistakes such as pricing or labelling errors can snowball into significantly lost profit, lapses in customer satisfaction, and employee frustration. And in fact, administrative and paperwork errors can account for 18.8% of annual shrinkage. In order to mitigate these errors, retailers must begin to explore how inventory data can be communicated correctly and consistently throughout these various internal touchpoints
Why Current Methods of Loss Prevention can Lack Long-Lasting Results
Loss prevention has to date, been an issue of high importance for the retail sector. Still, the recent acceleration of technology adoption has provided a window into the efficiency that digital-driven supply chain management presents. While current loss prevention methods are year-on-year, reducing the cost of lost goods, these solutions can often lack depth and breadth as they operate in silos from one another.
Additionally, many of these existing strategies, such as alarms and armoured cars – while effective – predominantly focus on mitigating the loss of large quantities of stock rather than at the item-level that is becoming increasingly important. At the same time, they often do not account for reducing back-end administrative fraud and errors such as incorrect delivery dockets.
It is, therefore, critical that continuity of information is built into future loss prevention strategies so that goods are traced throughout the entire supply chain, and long-term improvements can be implemented.
How RFID Can Prevent Shrinkage in One Simple Solution
Smart-Shelving
RFID’s ability to help retailers monitor how customers interact with their products to improve personalisation and recommendation in stores can subsequently work in favour of loss prevention. For example, RFID enabled smart shelving sends a trigger to employees whenever stock is low and can help report real-time anomalies of inventory movement and location tracking.
The technology’s ability to send stock quantities and location information to multiple stakeholders in stores, head-office and warehouses could act as a significant dissuade employees hoping to isolate incidents of theft. Additionally, the simple existence of an item-level RFID tag can act as an effective deterrent to shoplifters.
Returns Processing
Due to RFID being able to trace inventory throughout the entire supply chain, this software can act as a journal for any product, providing evidence of where it has been before being returned into a retailer’s ecosystem. In turn, this can allow businesses to identify where returns fraud is happening and assess where the weaknesses are in their returns process.
Data collected can also provide insight into the kinds of products experiencing serial returns and investigate if this is down to poor quality, fit, or even if the item is highly “Instagramable” rather than wearable. These are all essential datasets that can be fed back to designers, marketers and manufacturers who can, in turn, look to reduce the reason for returns within their roles.
Automated Real-Time Updates
The automated updates that RFID provides allow companies to manage inventory with more connectivity within their operations. Unfortunately, inconsistent communication between the complex and isolated processes within retail operations has for a long time provided the opportunity for administrative, human errors and fraud.
RFID simplifies communication and allows warehouses, distribution centres, and stores to correlate physical stock against digital information at the item level. Additionally, RFID removes chances for vendors and employees to tamper with data and falsify information.
RFID Can Makes Data-Driven Loss Prevention a Reality
Not only can RFID act as a deterrent, but it can also help businesses to build resilient future strategies that reduce the causes of inventory loss at the source.
As an offshoot of the all-important supply chain transparency we discussed last month and item-level visibility the retail sector still struggles to enforce, RFID’s ability to deliver data-driven insights and pinpoint precisely where inventory loss occurs is highly valuable for highlighting areas for improvement within the supply chain and possibly uncovering reasons for the unattributed loss.
Book a demo with Detego today to see how our inventory transparency software can help you tackle loss prevention challenges.
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.