Beauty retail is an industry at a crossroads. A sector resilient to crisis and change compared to other retail categories, cosmetic brands are beginning to feel the effects of the pandemic and ongoing industry changes.

 In recent years, apparel and sports retailers have undergone digital transformations to stay competitive, and now beauty brands have an opportunity to follow suit. Read this eBook to discover how and why beauty retailing is set to transform into the industry of the future. 

Beauty retail: An industry at a Crossroads

The apparel and sports retail industry have undergone mass change over recent years. Such retailers have undertaken digital transformation journeys in their store and distribution networks to adapt to digital-first customers and eCommerce competition. The beauty sector, however, is still behind the curve.

In most major beauty-industry markets, in-store shopping accounted for up to 85 per cent of beauty product purchases before the COVID-19 crisis – (McKinsey&Co) making the level of eCommerce penetration lower than in other retail sectors. While retailers in other categories have been forced to innovate and adapt in the face of falling brick-and-mortar sales, competition from eCommerce and direct-to-consumer models, brick-and-mortar beauty sales were more resilient.

But this is changing. Not only are eCommerce levels steadily increasing year-on-year, but the COVID-19 pandemic has accelerated this drastically, driving five years of change in a single year, according to
IBM. This leaves brick-and-mortar beauty retailers on unsteady ground. Beyond this, brands will have to navigate a more digital-centric environment and optimise margins to cope with reduced sales.

The good news is many of the challenges that are now facing beauty have been facing apparel or CPG for years. The digital solutions and strategies that have allowed apparel to adapt are well established and ready to deploy to the sector. The digital transformations that many apparel and sports retailers were forced to undergo will not only fit beauty retailers but will also help them solve older challenges. Beauty retailers may need to go on a similar journey to apparel, but the tracks are there to follow.

What is in the eBook?

  1. Beauty retailing at a crossroads
  2. Bringing beauty operations up-to-speed
  3. Accuracy redefining margins
  4. Fixing beauty’s shrinkage problem
  5. Catching up with the omnichannel trend
  6. Countering the Gray Market
  7. Becoming digital and analytics leaders
beauty retailing ebook pages

Radio frequency identification (RFID) is one of the leading technologies in retail, helping brands transform their business while maximizing revenue. With COVID-19 accelerating the digitization of retail and meaning stores need to be as profitable as possible to survive, RFID is a must.   

Most retailers know this, but the real question is where to start. Hear from the leaders in retail RFID solutions, Detego, and the experts in retail IT integrations, Spencer technologies, to find out!  Join a panel of retail specialists as they layout the simplest and most effective path to success with RFID.

We are a year on from the start of the global Coronavirus (COVID-19) pandemic, and the world is still firmly in the grips of the crisis. But with vaccinations being rolled out globally things are certainly improving, and the end may well be in sight.

For retail, the outlook is similar. While more than 30 major retailers filed for bankruptcy last year (almost double that of 2019), the first green shoots are starting to appear. Most major brands have successfully pivoted to stay afloat during the crisis, and across both the US and Europe the rebound of the brick-and-mortar store seems imminent.

But what will post-pandemic retailing look like? How has the industry shifted in both the long and short term, and what can brands do to prepare for and capitalise on the beginning of retail’s recovery?

Early Signs of Retail’s Recovery from the USA and Europe

While nothing is for certain, most signs point towards this current period being the latter/final stage of the pandemic, particularly for Europe and the USA. With vaccinations beginning to roll-out at scale and many European countries beginning to ease restrictions and lockdowns, many experts are hopeful regarding the outlook for retail over the next few months.

Europe’s recovery: a mixed bag

Across Europe, the outlook is mixed. According to analysis from Business of Fashion and McKinsey & Co, whilst demand for struggling categories like fashion is predicted to increase, the ongoing effect of lockdowns is cause for concern. So, whilst recovery is expected, it will likely be to a lesser extent than other markets.

However, we have seen some encouraging signs despite lockdowns, as the BRC-KPMG retail sales monitor found that in February UK sales increased by 1% year-on-year. As stores are allowed to open back up the numbers will continue to improve, H&M said sales in the March 1st to March 13th period were up 10 per cent in local currencies as many countries, including single-biggest market Germany, began allowing some stores to reopen.

US recovery: encouraging signs for fashion and brick-and-mortar stores

For the United States, the signs are fairly positive, with retail sales in 2021 expected to perform significantly better than in 2020, according to McKinsey and BoF. Additionally, recent findings from Coresight Research’s US Consumer Tracker found that, for fashion retail, the proportion of consumers that are purchasing clothing and footwear in-store was higher than those buying online for the first time since the pandemic – a major milestone for the sector’s recovery.

The report found several reasons for the US apparel industry to be optimistic, as 13% of respondents reported buying more clothing and footwear than pre-crisis, the highest level surveyed so far this year. Meanwhile, the apparel category witnessed the largest decline, of almost 6%, in consumers that are buying less than pre-crisis. Sales in apparel and other ‘discretionary’ categories were the worst affected by the pandemic, so these early signs of recovery are encouraging.

Graph depicting US in-store purchases v online sales

How have brands have shifted in the last year?

It’s been well reported how the global pandemic has affected shopping habits and caused a major increase in eCommerce penetration. According to data from IBM’s U.S. Retail Index (2020), the pandemic accelerated the growth of digital shopping by roughly five years.

This paradigm shift is reflected in the strategies of major retailers since the pandemic. With online becoming, at least temporarily, the primary shopping channel many retailers leant into and reinforced their eCommerce operations. But for the majority of retailers with significant physical store footprints, this was not enough, and the most successful brands developed their omnichannel offerings to better leverage their stores in the new digital-first world:

 

Buy Online, Pick Up in Store (BOPIS) is here to stay

Many retailers were investing in omnichannel services like BOPIS/Click and Collect well before the pandemic, but since then it has become something of a must-have and may remain so well beyond the pandemic. Retailers that had invested in Omnichannel before last year have reaped the benefits, as BOPIS saw YoY growth of 130% in June 2020. These retailers include US powerhouse Target who saw their curbside delivery service grow 500% year-on-year.

 

Stores as fulfilment centres

Similarly, brands with the infrastructure and agility to do so have been investing and leaning into in-store fulfilment throughout the pandemic. The advantages of this are considerable as it allows retailers to leverage their stores to service online customers. Target again made massive gains from this last year, reporting fulfilling 90% of their online orders directly from their stores, cutting fulfilment costs by 90% and contributing to a 100% increase in online sales compared to 2019.

 

Major fashion retailers are betting on Direct to Consumer (DTC)

Another major strategic shift that we have seen accelerated by the pandemic is the direct-to-consumer model. Although this model is nothing new, the fact that major global fashion retailers like Nike, adidas and Levi’s are evolving their strategy to become DTC-first is hugely significant. At the height of the pandemic, adidas saw their eCommerce sales increase by 93% but don’t think of this as a temporary shift – adidas recently announced that they’re aiming for DTC to account for 50% of their sales by 2025.

Long-term strategies taking shape?

So, what can we learn from these changes? Are these simply temporary shifts to navigate unprecedented times, or are they indicative of long-term industry change? The answer seems somewhere in the middle. Although the huge increase in digital sales that were seen at the height of the pandemic is already starting to fall away, the consensus is that a proportion of this change will be ‘sticky’ and digital sales will permanently remain higher than pre-pandemic levels.

As for brands exploring new models like DTC and Omnichannel, there is no doubt that these strategies will continue and remain relevant well beyond the pandemic. The demand and benefits of such models were there pre-COVID, and these changes have simply been accelerated.

The fact that many of these examples of omnichannel success come from the US is no accident. With the states having had fewer full lockdowns than their European counterparts, the success of these strategies could make a valuable lesson for European retailers looking to navigate the coming year – as consumer sentiment remains unstable and may well be signs of a more long-term shift in retail globally.

Preparing for Retail’s recovery: Short-term priorities

Taking Stock: Inventory Control will be Vital for Reopening Stores

As stores come out of lockdown across Europe, taking control of inventory will be a top priority. The first step will be taking stock and ensuring brands know exactly what they have in their inventories. For some stores, inventory management may have broken down due to lockdowns, particularly if stores have been used to fulfil online orders but do not have the IT infrastructure to keep effectively manage this.

Beyond this, the question of older or out-of-season products will present a challenge. Stores will already be dealing with bloated inventories due to lower sales and shutdowns, so maintaining optimal inventory levels and potentially selling marked-down products to make room for new stock will be a priority.

 

Continue to leverage online

Retailers should have invested in their digital channels at the start of the pandemic (and ideally before this). Even with stores opening back up, the increase in digital sales will remain high initially, and some will be sticky post-pandemic – just how much remains to be seen.

Retailers who continue to invest and develop in their digital and omnichannel offerings will profit post-pandemic. We have seen plenty of evidence supporting this from both the US and Chinese markets, so European retailers should follow suit and continue to offer flexible options to customers, many of whom may remain sceptical about returning to stores for some months to come.

 

Mastering fulfilment

With this consumer uncertainty and ongoing eCommerce penetration – making sure retailers deliver on fulfilment remains a priority. We can again look to target as an example, their same-day delivery sales went up 218% this quarter, showing the opportunity is there for retailers who can go the extra mile with their fulfilment, and even dare to compete with the eCommerce powerhouse of Amazon.

Detego Retail Store Application

Cloud-hosted RFID software

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

Detego Store is a cloud-hosted RFID solution which digitises stock management processes, making them more efficient and more accurate. Implemented within hours, our multi-user app can provide intelligent stock takes and a smart in-store replenishment process. Later, you can scale the solution to offer omnichannel services and effectively manage your entire store operations with real-time, item-level inventory visibility and analytics.

Beauty retail is an industry at a crossroads. Read this eBook to discover how and why beauty retailing is set to transform into the industry of the future.
Hear from the leaders in retail RFID solutions, Detego, and the experts in retail IT integrations, Spencer technologies as they layout the simplest and most effective path to success with RFID.
It’s not another buzzword – How item-level data has changed retail for good.

If you’re always reading about item-level data or item-level inventories but aren’t sure what all the fuss is about, we’re here to explain. It’s not just another retail tech buzzword, it tells the story of an industry transforming, the first step in a global shift from analogue to digital retailing (and we aren’t just talking about Ecommerce here).

When a retailer’s IT systems work on an item-level, they can identify, count, track and trace each individual product. While it sounds simple enough, in theory, it’s harder to do in practice and has only recently been made possible by new technology like RFID.

The benefits are huge, and while we will explore them in more detail, they include running leaner and more efficient stores, stronger supply chains and powerful data and insights.

Before we do that, lets briefly cover the current (or old, arguably) alternative to this: a stock keeping unit or (SKU).

What is a stock keeping unit?

A Stock Keeping Unit uses a basic code that specifies the identity of a product – for example, a plain white t-shirt, size L.

One of the main differences here is that an SKU can (and should be) logged and counted multiple times, for example, if you are counting those 10 white t-shirts, you are counting the same SKU 10 times.

Barcodes tend to operate on SKU’s, and you can scan the same barcode over and over.

  • Specifies the product type and size
  • Is counted multiple times

What does item-level data mean?

For retailers, working on an item-level simply means treating each item as a unique, identifiable piece of merchandise.

On the technical side, that means each item must have a unique code – called an Electronic Product Code (EPC).

Effectively, item-level data means being able to tell the difference between 10 medium white t-shirts. With EPCs, you could replace one of those 10 with another of the same item and be able to identify the new one from its unique code.

This might seem arbitrary, but it is one of the key drivers of transformation and change in the way retailers manage their stores and supply chains in recent years. Removing the human error element is one thing, but the unique ID’s open the door to much more.

These unique product codes are what makes RFID possible, as hundreds of radio signals can be emitted and read at once. Since each item has a unique ID there is never any risk of counting something twice. This means its possible to do store stocktakes in a matter of minutes, and verify items going through the supply chain without even opening up the box!

Additionally, the item-level data makes the world of difference when it comes to the supply chain.

If you were to track items on an SKU level within the supply chain, it would only tell you how much of each product passes through. Even this is too time-consuming, however, as it would require opening boxes and scanning individual bar codes, so instead DC’s and factories scan boxes, and operate on a carton level.

With item-level verification inbound and outbound at DCs, the individual contents can be counted and checked (via radiofrequency). These unique product IDs mean another whole layer of data, individual items can be tracked and traced from source to store.

  • Can’t count items more than once
  • Makes rapid inventory counts possible
  • Individual product codes mean you can track and trace items across the supply chain
  • More accurate data across the supply chain

The benefits of item-level retailing

 The Detego Platform – Delivering item-level data to retail

The Detego platform is the definitive solution for delivering and utilising item-level data for retailers. The RFID platform covers every step of the item journey, from factories to distribution centres, to stores. Track and trace individual products across the supply chain, perform store stocktakes in minutes and take the guesswork out of retail. If you’re a retailer with several or even hundreds of stores, the Detego platform is purpose-built to get the most out of your stores and supply chain.

Detego Retail Store Application

Cloud-hosted RFID software

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

Detego Store is a cloud-hosted RFID solution which digitises stock management processes, making them more efficient and more accurate. Implemented within hours, our multi-user app can provide intelligent stock takes and a smart in-store replenishment process. Later, you can scale the solution to offer omnichannel services and effectively manage your entire store operations with real-time, item-level inventory visibility and analytics.

Beauty retail is an industry at a crossroads. Read this eBook to discover how and why beauty retailing is set to transform into the industry of the future.
Hear from the leaders in retail RFID solutions, Detego, and the experts in retail IT integrations, Spencer technologies as they layout the simplest and most effective path to success with RFID.
For many retailers, stocktaking is considered a necessary evil. But physical inventories come at great cost: time, money, and overall efficiency. As a result, many stores only perform an annual or bi-annual stocktake,but is there a better way?

Knowing what’s in your store is essential to running a profitable retail business, whether it’s an independent boutique or a store in a chain of thousands. There are two things that keep stores ‘In the know’ when it comes to their inventory, stocktakes and their inventory management systems. A stocktake allows you to establish your view of inventory (at reasonable expense and effort) whereas the better your inventory management system is, the longer that view of stock stays accurate.

Even if your inventory management is top quality, without regular stocktakes accuracy will begin to slip. Factors like theft, admin errors and stock movement will mean that before too long the stock file and the physical inventory become increasingly out of sync.

This problem is multiplied the bigger a retailer’s footprint is. When looking at hundreds or even thousands of stores, stock inaccuracy can add up to unthinkable amounts of capital. Just look at British retailer Ted Baker who last year discovered a £58M hole in their business, entirely due to inventory mismanagement!

For many retailers then, stocktaking is considered a necessary evil. But doing a wall-to-wall count of every individual product in a store is no mean feat. Physical inventories come at great cost: time, money, and overall efficiency. As a result, many stores only perform an annual or bi-annual stocktake, but these leave a lot to be desired.

Let’s go through how and why annual stocktakes can be so expensive to perform and even ask, can retailers afford to go on like this?

The cost of annual stocktakes

The upfront cost  

Physical inventory counts are big operations that are expensive to perform. Doing a wall-to-wall stocktake of everything in a store (backroom and salesfloor) takes a lot of time and manhours. To perform a physical inventory count, retailers have two options:

 

Carry out the stocktake internally

One option is for a store to carry out the inventory itself. This is tricky but not impossible, provided the staff are organised, attentive and know what they’re doing. The major downside is how labour intensive it is, requiring a lot of store staff, making working around opening hours difficult (more on this later).

For independent or particularly well-staffed stores, internal stocktakes can work. The issue is it does not scale. For a retailer with hundreds of stores, asking every one of them to perform such an operation once or twice a year puts a lot of pressure on store management – and the results will be inconsistent at best

 

Use a third-party service

Using a specialist service to perform the physical inventory does have its advantages. First off, the accuracy of the stocktake is likely to be more reliable, and it is easier to scale up the use of such a service to more and more stores. The major downside is the considerable cost. Whilst it depends on the service used and the size of the store, these stocktakes can cost around $2000 – $3000 per store. Assuming each store only performs such a count once a year, when scaled across tens or hundreds of stores, the cost becomes immense.

The disruption to stores

Regardless of who you have performing the physical stocktake, the other question is when. A full inventory takes time, whilst it naturally depends on the size of the store and the team, it will likely take half a day at a minimum.

If the store is closed once a week, then this is the obvious choice. However, larger brands can often operate seven days a week…

So that leaves retailers with another difficult choice – close the store, or perform the stocktake overnight? Naturally, closing the store means losing sales and disrupting customers. While performing the inventory count overnight can make for a tight schedule.

An overnight inventory count is more doable (and common) when using a third-party, but it is not always feasible if you are using internal staff. Not only are you asking (and paying) for staff to come in out of hours, but you also will not be able to use that set of staff of either day either side of the overnight stocktake – making it incredibly difficult for smaller teams.

The suboptimal results

So those are the implications for actually performing annual/bi-annual stocktakes for retail stores, but there is something else to consider…

The fact is manual inventory counts give you subpar results. Even with supporting technology like barcode scanners, the margin for manual error is still significant meaning right from the outset you will still have errors and discrepancies. A much bigger factor – performing stock counts once or twice a year is simply not enough anymore. Sure, you may have 90% accuracy every 6 months, but what about the time in-between?

Typically store inventories run at 60-80% Item Level accuracy. However, stores will rarely report such low numbers because:

 

A) They only calculate accuracy after a stocktake

 

B) They are working on an SKU (stock-keeping Unit) level, and not an item-level.

 

C) Errors in stocktaking procedures mean stock file and actual inventory do not match, i.e., the accuracy quoted is not accurate

 

This level of stock inaccuracy also comes at a cost – and it’s a steep one. Stock inaccuracy causes three problems for stores.

Overstock – Excess stock, a result of the inventory list not showing items that are present in the store. Often compounded by stores carrying ‘safety stock’ for key products.

UnderstockA lack of product, a result of the store inventory showing items that aren’t really there. Also called ‘phantom stock’, one of the main causes of this is theft. Understock leads to products becoming out-of-stock altogether, meaning lost sales and revenue.

Dead StockFor perishable products, dead stock means products that can no longer be sold. While sectors like fashion don’t have this problem having stock sat unsold in backrooms can lead to products falling out of season, resulting in mark-downs and profit loss.

The bottom line of this inaccuracy? 10-15% higher working capital in stores, as a result of bloated inventories, and 5-10% of sales being lost simply due to stock not being available for customers to buy.

The alternatives to annual stocktakes

Cycle counts

A cycle count is where a store performs a partial count of a specific portion of store stock. Instead of performing an annual stock take once or twice a year, you might perform a cycle count several times a quarter. Essentially, you are breaking down the annual count into several mini stocktakes.

This has many benefits over annual stocktake – less disruption to the store, less labour intensive and (since it can be done by store staff) it’s cheaper. It can also help avoid the large variation that you get when there is a larger gap between takes.

While this is certainly better, cycle counts require a lot of coordination and still have the same problem as all manual stock counts: they are time-consuming and inaccurate. So, whilst cycle counts will reduce the costs compared to annual stocktakes, the cost of the inaccuracy will stay the same.

 

RFID   

Having looked at the costs and problems associated with manual yearly stocktakes, you’d be forgiven for thinking successful large-scale brands don’t operate like this – and they don’t.

Radiofrequency Identification (RFID) is a technology that allows stores to perform rapid inventory counts, via product tags that emit a small radiofrequency. Stores that have implemented RFID can perform weekly or even daily stocktakes, as a single member of staff with an RFID reader can count thousands of items in minutes. The result of this is RFID stores have typical inventory accuracy of 99%, and no more need of annual stock takes.

Installing RFID in stores is a reasonably big project and requires some upfront investment. However, if you look at the cost of performing third-party stocktakes every year alone that money could be used to fund the RFID project and it delivers a stronger return of investment than regular physical inventories. This without mentioning the various other benefits of the technology, which you can read about here.

Detego Retail Store Application

Cloud-hosted RFID software

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

Detego Store is a cloud-hosted RFID solution which digitises stock management processes, making them more efficient and more accurate. Implemented within hours, our multi-user app can provide intelligent stock takes and a smart in-store replenishment process. Later, you can scale the solution to offer omnichannel services and effectively manage your entire store operations with real-time, item-level inventory visibility and analytics.

Beauty retail is an industry at a crossroads. Read this eBook to discover how and why beauty retailing is set to transform into the industry of the future.
Hear from the leaders in retail RFID solutions, Detego, and the experts in retail IT integrations, Spencer technologies as they layout the simplest and most effective path to success with RFID.
It's been a year like no other; we recap an eventful year for retail by looking through our best content from the year. From COVID-19 to retail's ongoing digital transformation, and our major updates along the way.

Hear from Detego’s implementation experts and BESTSELLERS’s RFID project leader on how retailers should approach digital transformation with RFID.

Radiofrequency identification (RFID) has become a vital technology in retail, particularly for larger brands. Leading retailers use the technology to achieve high stock accuracy, supply chain visibility and to gain the real-time data required for strong digital offerings such as omnichannel.

These are no longer optional for retailers and undergoing digital transformation with RFID is on the agenda for more and more brands.

Join Detego’s delivery specialists with years of experience implementing RFID in retail stores, and supply chains as they go take you through a best-practise approach to implementation.

Hear about the journey from a retailer’s perspective as BESTSELLER talk through their RFID journey which included an initial rollout to just under 200 stores in 3 months!

  • Determine the key things to consider when implementing RFID
  • Gain insight on the priorities to focus on, things to look out for, and lessons learnt
  • Learn about each stage of the journey with specific insight and advice for both stores and distribution centres
  • Hear a retailer’s experience of a large rollout covering hundreds of stores.

2020 has been an incredibly difficult year for people, countries, and businesses. We have covered the effects of COVID-19 on retail in great detail, so let’s begin to look ahead at 2021 and what the key trends are likely to be in the increasingly-familiar ‘new normal’ and beyond. Starting with a key priority for retailers both for now and next year: Reducing labour costs in stores.

Introduction

With the financial impact of this year, as well as the reduced sales in brick-and-mortar stores as more customers opt to shop online, retailers need to cut costs in innovative ways to stay profitable. Cutting costs negatively, by getting rid of staff or stores or putting pressure on employees over scheduling, time theft etc all harm staff, customers, and sales. However, there is a more positive or proactive way to achieve this – improving store processes by implementing technology in stores. In this article, we’ll cover where these improvements can be made and where RFID, in particular, can allow retailers to drastically lower labour costs.

Cutting labour cost at the expense of the customer is not an option

Before we get into what technology can do to cut labour costs across the board, let’s first establish why other forms of cost-cutting should only ever be a last resort for retailers, and even then are unlikely to produce positive results. To do that its helpful to establish the difference between optimising costs and cutting costs.

Optimising – not spending on excess staff or stores that are not needed (very rare)

Cutting – getting rid of staff or entire stores that are required as a cost-saving measure.

When it comes to large or global retailers with hundreds of stores, cutting labour costs at scale by reducing staff falls almost always into the latter category.

But this can have huge repercussions on a stores performance and their ability to serve customers. According to RetailDive a study of one apparel chain found that they were only achieving 85-95% of their potential sales due to its staffing levels. According to a separate report from Massachusetts Institute of Technology, 6% of all possible retail sales are lost because of lack of service, as customers are unable to locate help.

In short, cutting labour costs by reducing staff in stores simply doesn’t pay. So, what are the more positive and proactive ways retailers can cut labour costs in stores without harming staff, customers, or profits?

Faster checkouts and self-checkouts

When looking at the most staff-intensive areas of a store, you have to start with the checkout. While it does vary depending on the category, with grocery being particularly prevalent, cashiers and point-of-sale are a huge drain of staff and therefore a large source of labour cost. But removing staff from this area without offering any alternatives is not effective as long ques scare away customers and hurt sales. So, the options to reduce costs associated with the checkout are:

.

Offer self-service checkouts

It may seem like a no-brainer, and for some retailers it is. Since there is no need for a cashier at every register, one employee can easily monitor 6-10 self-service registers which free up staff to be available elsewhere in the store. However, outside of the food industry, self-service hasn’t really taken off mostly due to the higher price points of items making checkout theft a much bigger concern, in these cases, there is often also a need for staff to remove things like security tags (more on this later).

.

Implement technology at PoS that makes the checkout process faster

The other option that is available instead of or in tandem with self-checkouts is improving PoS technology to make it faster and more efficient, reducing the number of cashiers needed. Popular European food retailers, Aldi, who was described by CNN as a ‘brutally efficient grocery chain’ have barcodes all over their products, making their cashiers infamously fast. But for many retailers and sectors, this isn’t feasible, so what is the other option? An RFID tag can achieve the same purpose as the radio frequency it emits can be read at any angle. Even better, every item can be scanned/read at the same time! Having RFID-enabled checkouts can not only massively cut queue times but also reduce labour costs by having fewer staffed checkouts per store.

Automate stock management

What about the other process store staff spend the majority of their time on? Managing inventory and replenishing sold items can, depending on the retailer and the category, be a big drain on staff time. While automating the process entirely would require robots and eliminate the need for staff altogether (something we do suggest) automating the management of stock with intelligent software is our speciality. With in-store mobile applications that provide accurate and timely replenishment advice, shelf management becomes much easier for staff and cheaper for retailers. The Detego platform takes this even further and can even order replenishment advice so staff take the shortest and most efficient route possible!

Detego Replenishment Screenshots

Replace ‘hard’ security tags

Loss prevention is a key principle for most stores. When you are trying to maximise revenue, losing stock and sales eats into profits and makes thin margins even thinner. Naturally, the majority of retailers have systems and technology implemented to combat shoplifting in stores, with the most common being ‘hard’ security tags that need to be removed by staff before passing through the store’s EAS gates. But these tags come with a hidden cost: it’s estimated that a single security tag costs around $0.30 in labour costs to add and remove from each item. Added to the cost of tags themselves this can add up fast, particularly in sectors like apparel where this is done for every item. But since not having loss prevention in place is just as costly, what are the alternatives? RFID tags can be used with EAS gates, and provide a more cost-effective option. They are the ‘soft’ version of such security measures meaning they do not need to be removed before leaving the stores but are slightly less durable. If we are keeping score here, using RFID instead of hard tags have the following advantages:

  • The tags themselves are cheaper
  • They are tagged at source, meaning store staff don’t need to do it
  • They do not need to be removed by staff, as once confirmed as purchased by the PoS, they simply do not set off the EAS gate
  • They are multi-functional, meaning that tags can be used for stock management, PoS and loss prevention

Eliminate costly annual stocktakes

Finally, let’s move away from daily processes and labour costs and look at something that (most) retailers only do a handful of times a year but at great cost: The full store stocktake or cycle count. The cycle count is a necessary evil to know exactly what is in retailers stores to maintain stock accuracy and optimise working capital. However, without supporting technology these stocktakes are big undertakings – which is why they are done so rarely. Larger retailers often use third-parties to perform these stocktakes, which cost around $2000 per store (depending on size). When you do this for an entire store network – the costs add up fast.

The best alternative to this? Implement RFID in stores, meaning staff can regularly perform RFID stocktakes on a weekly or even daily basis. This removes the cost of the annual stocktakes, but are you just replacing it with the cost of RFID itself? The reason this works financially is the long list of benefits you gain from using RFID, most notably an increase in sales and a reduction in running costs (both from reduced labour and less running capital). This is not just us saying so as the list of retailers who use of RFID has grown hugely and more and more retailers are choosing to adopt the technology.

How the Detego platform can reduce labour costs by 20%

While covering the ways retailers can cut labour costs without affecting their staff or customers, we’ve touched on many brands can do so with RFID. Cutting labour costs in a proactive way requires investing in technology and upgrading store processes and RFID ticks a lot of boxes here. The Detego platform allows retailers to easily implement RFID in stores and start seeing a fast ROI. Implementing the platform also reduces general costs further by decreasing inventory sizes, reducing working capital by around 15%.

 

RFID in the store

Book your demo today to find out more about our solutions to reduce your labour costs at scale:

Beauty retail is an industry at a crossroads. Read this eBook to discover how and why beauty retailing is set to transform into the industry of the future.
Hear from the leaders in retail RFID solutions, Detego, and the experts in retail IT integrations, Spencer technologies as they layout the simplest and most effective path to success with RFID.
It's been a year like no other; we recap an eventful year for retail by looking through our best content from the year. From COVID-19 to retail's ongoing digital transformation, and our major updates along the way.

As we look to round off what has been an incredibly disrupting year with the all-important holiday season, how is the retail industry likely to fair? Will the usually busy holiday season provide some much-needed relief to retailers feeling the pinch of a tough year, or will sales and profits continue to struggle? We analyse the figures and identify the key trends that will rule this year’s holiday season.

Overview

In terms of general outlook, the majority of experts are predicting the coming season to be positive in general, but with less growth compared to previous years. ICSC and CBRE both predict less than 2% growth in sales for the period, compared to the average of 4.1% we typically see in the holiday season. Considering the economic and social disruption of the past year this lower than normal increase is to be expected, but ultimately will cap off what has been several months of steady growth in both the UK and the US. If we look at consumer polls, the outlook is similar, with a survey from Maybe* finding that its ‘Christmas as usual’ for 71% meaning they plan on spending the same as in ‘normal’ years.  But the way customers, and indeed retailers, go about this holiday season looks to be very different from previous years.

Let’s take a look at some of the key trends for the upcoming holiday season:

An extended season

Black Friday is the event that kicks off the holiday season, typically meaning high discounts, crammed shop floors and long ques outside of stores. Due to the realities of the pandemic many retailers have extended their Black Friday offerings to cover several days or even weeks, in an attempt to prevent overcrowding in stores. COVID may have moved the starting line of the season altogether however with prime day, typically taking place in July, pushed back to earlier in October. If ever there was a retailer big enough to move the needle by themselves, it was Amazon – and several retailers in the US including Target and Walmart launched their own deals at the same time to compete with the online giant. Customers will be keen to take advantage of these deals this year more than ever, and according to AlixPartners, 49% of consumers plan to start their holiday shopping by Halloween or earlier in the US, and in the UK Maybe*’s survey found that 65% of respondents have already started their Christmas shopping this year.

ECommerce will continue to run the show

It’s a statement everyone in the industry is very familiar with this year, but the defining feature of this holiday season will be a major preference for online shopping and eCommerce. While this trend has been steadily increasing over the years, the coronavirus pandemic has caused a huge spike in eCommerce as many consumers avoid stores and practise social distancing. As a result, Deloitte’s Annual Holiday Retail Forecast predicts eCommerce sales will grow between 25-35% year-on-year, compared to 14.7% in 2019. Similarly, the Maybe* consumer survey found a whopping 58% of customers plan to do their Christmas shopping online this year. This will be a test for many retailers, both pure-play and multichannel models, as the increased demand will test the capacity and strength of both their online channels and their fulfilment capabilities.

How will Brick and Mortar stores fare?

But what of the brick-and-mortar store? It’s no secret that physical retail has taken the brunt of the impact on sales and revenue this year, but will the holiday season offer some respite? Retailers hoping to make the most of the period will need to focus on ensuring safety and customer confidence in their stores, with 55% of consumers saying that COVID-19 safety tops their list of holiday shopping concerns according to a survey by PwC. Even with these measures in place, in-store holiday traffic is expected to drop by up to 25% this year in the US. For the UK, it may be even worse, with only 30% of shoppers heading to their local high street for Christmas, according to Maybe*. Black Friday specifically is where store traffic is likely to fall more than ever, with more than a third of US shoppers planning to avoid stores for Black Friday in the US, and a massive 91% said the same for the UK.

Bigger discounts for Black Friday?

So how are retailers planning to approach this year’s Black Friday to account for this? Alongside the extension of the event and the repositioning online, it seems many retailers are planning on discounting deeper and earlier this year. According to data analytics experts Edited, the most common advertised discount this year is 40-50% for apparel products compared to an average of 20-30% the previous year. For fashion retailers, in particular, this makes sense as the goal is to not only try and drive sales but is, perhaps, more importantly, an opportunity to sell older and slow-moving seasonal stock collected throughout this challenging year.

Store fulfilment will be vital for many

With the continued dominance of eCommerce, non-pure-play retailers are being challenged to keep up with the pace as their online channels have been, at least temporarily, promoted from supporting operations to the heart of the business. Two of the biggest retailers in the US have invested heavily in their ship-from-store capabilities this year,  with Walmart expanded theirs to 2,500 locations, whilst target reported fulfilling 90% of their online orders from store cutting the cost of fulfilment by 30%. Adopting such a strategy not only allows for such operational benefits but it makes the existing eCommerce arm much more durable – which is exactly what they’ll need to be this season.

Click-and-collect / Curbside continue to be popular purchase options 

Similarly, click-and-collect and Curbside services will be more important than ever for many retailers this season. Macy’s CEO called the use of Curbside a ‘big secret weapon’ for the upcoming holiday season. Just how secret it is may be up for some debate, according to customer surveys, 80% of shoppers expect to increase their use of these services over the next six months, and 85% have already significantly increased their use of curbside since the year began. The reason for this is clear as such services tick all the boxes of being convenient, safe and online-first.

‘The season will ultimately cap off what has been several months of steady growth in both the UK and the US.’

‘COVID may have moved the starting line of the season altogether however…’

‘eCommerce sales (are predicted to) grow between 25-35% year-on-year, compared to 14.7% in 2019.’

‘Retailers hoping to make the most of the period will need to focus on ensuring safety and customer confidence in their stores’

‘it seems many retailers are planning on discounting deeper and earlier this year’

‘online channels have been, at least temporarily, promoted from supporting operations to the heart of the business.’

‘80% of shoppers expect to increase their use of these services over the next six months’

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Beauty retail is an industry at a crossroads. Read this eBook to discover how and why beauty retailing is set to transform into the industry of the future.
Hear from the leaders in retail RFID solutions, Detego, and the experts in retail IT integrations, Spencer technologies as they layout the simplest and most effective path to success with RFID.
It's been a year like no other; we recap an eventful year for retail by looking through our best content from the year. From COVID-19 to retail's ongoing digital transformation, and our major updates along the way.

Omnichannel retailing, offering customers a unified and convenient experience across and between shopping channels, has exploded back into relevance this year. For those in the industry, it might feel like it’s been around for ages – and it has. So long in fact that omnichannel grew into a buzzword that was thrown around relentlessly to the point that the term was declared ‘dead’ by many. The reports of Omnichannel’s death have been greatly exaggerated, however, with the ability to serve customers across multiple channels becoming a life raft for many retailers this year. While the conditions faced this year will be once-in-a-lifetime, many of the effects and trends may be long-term.

What exactly is Omnichannel retailing?

In short, omnichannel is the perfect connection and interplay between a brand’s physical and digital channels. A pie in the sky omnichannel experience is one where the differences or barriers between shopping in-store, online or on a brands app do not exist. You can check a physical stores stock levels on an app, the webshop remembers what you purchased in-store and uses it to recommend you more relevant products and so on. More grounded and familiar examples of this type of retailing are services like click-and-collect (Buy-online-pick-up-in-store) or ship-from-store (buy-online-ship-from-store).

Omnichannel was born from the need for (traditionally) brick-and-mortar brands to compete with online shopping. When retailers tried (and failed) to compete with established eCommerce giants such as Amazon or ASOS by simply launching webshops of their own (Multichannel retailing), they took it one step further. Rather than beat the likes of Amazon at their own game, retailers began doing something Amazon (at the time at least) couldn’t do – leveraging both their physical and digital channels, not in tandem but in unison. For this to work the connection between these channels should be as seamless as possible, so that it stops being the brand’s online experience bleeding into the physical, or vice versa, and it simply becomes the single brand experience.

This move towards omnichannel can come from both directions, as in recent years we have seen pure-play eCommerce brands expand into stores. Amazon for example is building futuristic stores which use customers’ existing amazon accounts instead of checkouts, and are filled with advanced retail technology, blurring the line between physical and digital. Not only is this a unique example of an omnichannel offering but it shows the fact that an omnichannel approach is not just for brick-and-mortar retailers trying to stay competitive, even the ‘disruptor’ e-tailers are repositioning to an omnichannel offering.

Omnichannel Retail

2020 and the Omnichannel revival

The effect of COVID-19 on retail has been well reported so we won’t delve into that here. The key conditions for the relevance of omnichannel are the huge spike in eCommerce and customers reluctance to return to stores. A report from Nosto claims at the height of lockdowns online channels spiked 66%, and a separate report from Klarna found that 71% of shoppers are putting off doing their Christmas shopping in-store this year due to COVID concerns. Whilst brick-and-mortar sales struggling or stopping entirely was bad news for any retailer, brands that have more advanced digital and omnichannel capabilities have weathered the storm far better. They have done this by being flexible and serving the customer wherever is more convenient and comfortable for them. Whilst for many this is online for others it is a mixture of both. This is where the interplay between channels with services like curbside can make a real impact.

Omnichannel Retail in the new normal

The demand for click-and-collect & curbside is higher than ever

As stores have re-opened, many customers want to purchase products from their local stores but are still cautious about fully returning to in-store shopping. Buy-online-pick-up-from-store (BOPIS) offers a convenient and safe solution to these concerns. Customers can check online what stock their local store has available; purchase items online and then collect from the store the same day. This offers a convenient and contact-free alternative to shopping in-store, with Curbside pickup the same concept except customer don’t even have to enter the store. According to customer surveys, 80% of shoppers expect to increase their use of these services over the next six months, and 85% have already significantly increased their use of curbside since the year began. Whilst the initial spike in demand for these services was due to COVID-19, as customers grow accustomed to the convenience, the demand for BOPIS will continue well beyond the pandemic.

Ship-from-store is proving decisive in the online-centric New Normal

On the other side of the omnichannel coin, we’ve seen many retailers absorb the eCommerce bump through the use of ship-from-store. Simply put, ship-from-store involves fulfilling online orders using store stock, effectively leveraging stores as miniature distribution centres. The benefits of this under normal circumstances are already significant, such as cutting down on last-mile fulfilment and offering customers more stock. During the pandemic, however, ship-from-store was a lifesaver for many, allowing brands to not only capitalise on increased online orders but to leverage quiet or even closed stores to prevent unsold inventory piling up. Two of the largest retailers in the USA have been betting heavily on ship-from-store this year, not only as a way to ride the wave of the pandemic but to even compete with the power of Amazon. Walmart expanded their ship-from-store capabilities to 2,500 locations earlier in the year, whilst target reported fulfilling 90% of their online orders from store cutting the cost of fulfilment by 30% and overseeing 100% increase in digital sales YoY.

A temporary blip, or a permanent shift?

The key question is of course, how temporary is this change? As things start to get better around the world, will brands who have bent over backwards to reposition to the ‘new normal’ only find themselves at a loss if things completely revert back to normal? While the drastic increases to eCommerce will fall off a certain extent, in the long-term it will remain higher than pre-pandemic levels. The report from Nosto suggests that this is now levelling off to an average increase of 7%. Not only does this mean the business case for omnichannel services is still stronger than it was at the start of the year, but as customers have relied on services like online and curbside out of necessity, in the future they will continue to demand it of a preference for convenience.

Graph showing how customers expect to shop after COVID

What do retailers need in order to offer a strong omnichannel experience?

So, what are the requirements for retailers attempting to offer their customers these services and experience? Whilst it does depend on how advanced the offering is, the fundamentals are digitisation and integration across all channels.

Expert Chris Walton says there are three foundations to omnichannel retailing:

  1. Cloud commerce
  2. Real-time Data Capture and Applications
  3. Location and Context Analytics

For services like click-and-collect and ship-from-store, the first two points are key. The cloud is needed for the sharing of information, both between the retailers two channels (the store and webshop) and between the retailer and the customer. The data capture is vital for these services to be accurate as to sell products in-store to online customers, retailers need to know exactly what is in stock in their stores to an individual item level. This is why RFID is a key component of omnichannel retailing as it offers the real-time visibility of the products and the high 99% stock accuracy so retailers can offer omnichannel services with confidence.

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Beauty retail is an industry at a crossroads. Read this eBook to discover how and why beauty retailing is set to transform into the industry of the future.
Hear from the leaders in retail RFID solutions, Detego, and the experts in retail IT integrations, Spencer technologies as they layout the simplest and most effective path to success with RFID.
It's been a year like no other; we recap an eventful year for retail by looking through our best content from the year. From COVID-19 to retail's ongoing digital transformation, and our major updates along the way.

What is the replenishment Feature?

Replenishment is a key feature of the Detego platform for retail stores. Via the mobile application, it guides staff through the process by determining what items need to be replenished on the sales floor, by comparing the salesfloor stock to either a ruleset or a planogram. Staff then go through the replenishment process moving items to the sales floor and confirming the transfer by swiping on the mobile app. This feature increases the OFA (on floor availability) of products in the store, and the application displays the exact OFA as a percentage.

Detego Replenishment

What problem does it solve?

Not finding the right product in the right size is a pain point all too common when shopping in stores. How many times have you not purchased something from a store simply because it wasn’t available, or you couldn’t find it in your size? Use of the Detego replenishment feature improves the availability of products in stores to over 95%. Product availability means having at least one of each product on the sales floor ready to purchase at all times – down to each specific size and colour. So, this means that customers looking for a particular product have at least a 95% chance of finding what they’re looking for, increasing both sales and customer satisfaction.

All stores will have processes for replenishment. It’s a core operational function for retailers that’s vital to maintain sales and keep stores running. Like many operational processes, however, there is great variance in how effective a stores replenishment might be. The two key factors to look at are the accuracy and the timeliness of replenishment. If stock information is incorrect, then any replenishment list created from it will be inaccurate, meaning items that aren’t available on the sales floor are not replenished and therefore can’t be sold. Similarly, if items aren’t replenished in a timely manner, then they will be unavailable to purchase even though they are sat in the backroom of the very same store!

How does replenishment work with the Detego platform?

The Detego platform delivers reliable and accurate replenishment through the use of the Detego mobile application and goes hand-in-hand with the application’s stocktake feature. With the 99% accurate view of both the backroom and the salesfloor achieved by performing daily stocktakes, the Detego replenishment feature compares the inventory on the sales floor to either the store’s planograms or the ruleset of inventory for the store. It then lists all the products that need to be replenished from the backroom on to the salesfloor – providing staff with a pick list. Stores may also have additional capabilities for replenishment depending on which features they have enabled.

Let’s explore the different options for replenishment with the Detego platform:

 ‘Standard Replenishment’: Replenishing after a full stocktake

After an associate completes a full RFID stocktake, the Detego platform has an accurate view of the items on the sales floor and in the backrooms. It then creates replenishment advice to ensure that products either out-of-stock or running low on the sales floor are moved there from the backroom to maintain a high On-Floor Availability (OFA).

  1. The Detego platform uses the results of the latest stocktake and creates a list of items that need replenishing from the backroom to the sales floor.
  2. Staff use a hand-held reader with the mobile app to see the replenishment advice.
  3. As staff move an item to the sales floor, they confirm the transfer by swiping on the mobile app.
Detego Replenishment Screenshots

Replenishing sold goods – ‘intraday replenishment’

With an integrated Point of Sales (POS) system, the Detego platform can update the replenishment advice whenever an item is sold. This ensures that the item is replaced on the sales floor if there is stock available in a backroom.

  1. When an item is sold, the Detego platform checks if that product is now out-of-stock or below the set thresholds.
  2. If this is true, a notification about the need to replenish the article is sent.
  3. Staff use a hand-held reader with the mobile app to see the replenishment advice.
  4. As staff move an item to the sales floor, they confirm the transfer by swiping on the mobile app.

Additional ‘smart’ replenishment features:

Smart Replenishment: AI Picklists

For larger stores, the Detego platform takes replenishment advice to the next level.  The system utilises the RFID tags on every product alongside machine learning algorithms to can determine the relative location of items in the backroom. It then presents the replenishment list to staff in a particular order, grouping items that are near each other in the backroom. The result is that staff picking items to be replenished save time and energy thanks to intelligent assistance from the mobile app.

Read more on Smart Replenishment with AI pick paths here

AI Pick Lists

AI planograms

So, replenishment work by comparing the stock that is on the sales floor to a list or ruleset that determines what should be there. But where do these lists or rules come from, and is there room for improvement? Typically, stores will either have a basic ruleset for all stock, or more complex planograms for specific items. While rulesets are simple, they are sometimes suboptimal, but planograms for individual products are hard to maintain. With the Detego platform, stores can run Artificial Intelligence planograms which constantly learn and adapt what the optimal quantities and size distribution is for every single product in the store

Read more on AI planograms here

AI Planograms - Merchandising

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Book an online demo with us today:

Beauty retail is an industry at a crossroads. Read this eBook to discover how and why beauty retailing is set to transform into the industry of the future.
Hear from the leaders in retail RFID solutions, Detego, and the experts in retail IT integrations, Spencer technologies as they layout the simplest and most effective path to success with RFID.
It's been a year like no other; we recap an eventful year for retail by looking through our best content from the year. From COVID-19 to retail's ongoing digital transformation, and our major updates along the way.