Tag: Inventory management

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

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

Due to the ease and accuracy of RFID stock counts, retailers using the technology can reliably achieve full item-level inventory visibility across their stores and supply chains. Crucially, due to the speed of RFID inventory counts, this can be achieved whilst actively reducing the labour intensity of operational processes. This accurate and up-to-the-minute inventory information is the backbone of so many of RFID’s uses in retail (including many of the points discussed below).

One crucial aspect of modern retail that relies on having accurate inventory visibility is Omnichannel retailing. With a complete and up-to-date view of stock across all channels, it is possible to open up the inventory of your entire store network to customers, providing a better customer experience and increasing sales.

Benefits of item-level inventory visibility

• Improved shipping accuracy
• Excellent baseline for advanced omnichannel retailing
• Produces more data for better insights
• Reduces inventory size (and therefore working capital) significantly
• Increased customer satisfaction from reduced out-of-stocks and a more connected experience

Ensuring a high product availability is vital to maintaining retail sales. Despite this, low on-floor product availability and out-of-stocks are an alarmingly common problem in the industry, causing unnecessary lost sales as a result of inefficient replenishment processes and stock inaccuracy. This latter cause is practically removed completely by RFID, with typical stock accuracy being increased to 99% from the standard 60-80%.

Additionally, RFID platforms provide an unbeatable basis for efficient and reliable replenishment processes. The main advantage these platforms have is the item-level and real-time inventory visibility gained from regular 99% accuracy stock counts.

How does RFID increase product availability?

• Makes regular cycle counts possible with efficient RFID stock reads
• Removes stock inaccuracy (from 70-80% to 99%)
• Creates complete item-level view of stock between both backroom and sales floor
• Item visibility makes replenishment easier and more accurate
• Real-time view allows for replenishment alerts for when items/sizes are running low
• Item-level data from RFID allows for advanced, even AI-assisted planograms for individual stores

We’ve discussed the difference item-level visibility makes for stores, but when it comes to supply chains the benefits are just as great. With RFID, inbound and outbound reads become far easier, and are done on an individual item level rather than SKU (stock keeping unit). This means each item is accounted for at each step of the supply chain, rather than just shipments or boxes.

This level of stock visibility also drastically reduces the rate of shipping errors or picking mistakes as they are detected by RFID readers and corrected by warehouse staff during exception handling or outbound reads.

Additionally, the location or status of items and shipments are visible in real-time, so stores and DC’s can easily track shipments and know exactly what they will be receiving. This makes any individual item fully traceable, as time and dates of when the item passed each read point in the supply process can be stored.

Benefits of RFID in the supply chain:

• Item-level visibility across entire supply chain
• Trace items against individual shipments
• Smoother operational processes
• Track shipments for delivery
• 100% inbound and outbound shipping accuracy

The difference in process efficiency from using RFID in retail is extensive, at every end of retail, be it the factory or the shop floor. An RFID reader, regardless of whether its fixed or a handheld, can read hundreds of individual items at once. Crucially though, as each item has a unique ID, they can never be read more than once. The signals also do not require line of sight to be read.

Naturally, this makes RFID inventory counts and inbound/outbound checks incredibly fast and reliable. In the case of store inventories, RFID has been found to reduce cycle count times by a staggering 96%.  This therefore means they are far more convenient to perform and can be done multiple times in a week rather than a year.

Processes transformed by RFID:

• Cycle counts/inventories
• Fast & Efficient Inbound & Outbound reads
• RFID-enabled picking and packing
• Mobile guided replenishment from backroom to salesfloor

Analytics and data is one area that e-commerce is ahead of physical retail. This is largely due to the fact that everything online can be measured, whereas retailers don’t really know what’s happening with their stores and customers in any specific detail, and the stats and data they do collect are often historical and at risk of being outdated.

However, with RFID this can all change. The simplest and most effective use of the data allows retailers to better leverage their greatest assets; their products and their stores. Quality data and analytics can allow retailers to ensure merchandise is in the right place to be sold. Information on which stores are performing better or worse is a basic retail KPI, but with specific item data, RFID produces far more detailed insights. This includes how well individual items are doing in specific stores, right down to specifics such as which sizes of items are selling better where. Insights such as these are naturally actionable, meaning retailers can take steps to move or reinforce stock at specific stores.

Data insights and results possible with RFID:

• KPI based performance tracking
• Detailed merchandise data & Analytics
• Operational excellence
• Actionable recommendations
• Compliance tracking
• Eliminates reliance on historical data
• Predictive capabilities for inventory counts and merchandise management

There are many effects of RFID in retail that go beyond simple operational benefits to actively improve the customer experience. At the most basic level, this includes things already mentioned like increasing product availability, offering convenient omnichannel services and freeing up store associates to spend more time assisting customers.

However, because of the real-time inventory visibility it provides, RFID can go way beyond this in terms of improving the customer experience. For example, with reliable and up-to-the-minute stock information stores can utilise technologies like chatbots or smart fitting rooms to assist customers with their queries, supply information about other items or sizes available and even cross-sell to customers in the store.

What ways does RFID improve the customer experience?

• High product availability
• Store associates have more time for their customers
• Convenient omnichannel services
• A connected experience between online and offline
• AI-powered chatbots delivering assistance and product information via mobile.
• Smart fitting rooms providing a hugely improved fitting room experience.
• RFID-enabled Point of Sale – including self-checkout services