Apparel Retail’s New Normal: COVID-19 Impact and Future Trends

16th June 4 pm BST / 11 am EDT 

As apparel retail begins to get back to its feet, how are retailers preparing in the short-term, and what lasting effects will there be? The pandemic will cause the rapid acceleration of ongoing changes in the industry, and entirely new ones that could never have been expected.

Now stores are facing new social distancing guidelines, the formula for customer experience has changed. With reduced foot traffic and higher levels of eCommerce, the digital evolution of the retail store is now or never.  Join us on the 16th of June as we dive into the physical and digital transformations behind retail’s ‘new normal’.

 

This webinar will cover:

  • The impact of the COVID-19 crisis on the apparel retail industry
  • How retailers are adapting retail stores to social distancing measures
  • How a shift in the balance between eCommerce and brick-and-mortar is driving retailers to adopt digital-enabled stores
  • How retailers can utilise digital and analytics to optimise operations and solve key challenges

Data by nature: Why eCommerce analytics are steps ahead

Online retailing not only created a new way of shopping, but it also changed the game when it comes to tracking and analysing the shopping journey. There is almost nothing that is not being evaluated while surfing the webshop. Digital-heat-maps of individual online sessions are analysed, showing every click and scroll through the online store. Every possible KPI is monitored: Conversion rate, click-through rate, average order value, the relation between new and returning visitors, bounce rate and retention to name a few. The really powerful thing about this is that analysis is always followed by action, to improve both the effectiveness of the webshop and the experience of its customers.

Data by design? Time for brick and mortar to take some lessons

Naturally, eCommerce has a significant advantage when it comes to analytics, a digital channel is always going to produce more data. Brick-and-mortar stores need to adapt to compete however, and technology is trying to bridge this gap between the physical and digital. Some of the more hardware-heavy options include AI-powered cameras, smart shelves or even aisle-roaming robots.

While hardware-intensive solutions like customer-tracking smart cameras are available, with the right software supporting it, a technology that simply tracks products (such as RFID) and leverages the IoT (Internet of Things) can revolutionise analytics for stores. These technologies and their supporting platforms are a big driver of ‘Digital transformation’ which delivers the analytics and data that brick-and-mortar stores are desperate for.

Here are 3 lessons from eCommerce for improving analytics in retail stores….

The need for real-time data

For years, brick-and-mortar retailers have been complaining about imprecise stock-figures and unreliable historical data. Unhappy with its purchasing decisions based on last year’s sales figures, retailers would prefer to have real-time data and inventories that allow for reliable and economically viable decisions. After all, it is important to avoid high-security stocks in order to reduce capital tie-up.

But why do we actually have this problem? Are the data points offered by the ERP systems not enough? Unfortunately not – it is not unusual that the ERP system shows higher stock than actually available on the sales floor. This so-called “ghost stock” is the cause for various problems in sales, e.g. the ERP system says a certain article, for example, a red skirt in size S, is in stock, but in reality, it is not. It can neither be sold nor refilled from the central warehouse – a classical out-of-stock situation. Or vice-versa, the ERP displays a lower inventory level than is actually available. The reason for these deviations is insufficient accuracy in individual processes that dangerously sum up over time.

Today’s intelligent article management is based on three pillars: fast, RFID-based article identification on item-level, tracking of every movement in real-time and proactive analysis with concrete recommendations for actions to take for the sales personnel. This is the foundation for optimum customer service and efficient processes.

What does real-time data mean for Brick and Mortar Stores?

  • High Stock accuracy
  • Increases product availability of the shop floor from accurate replenishment
  • Allows for convenient omnichannel services like click-and-collect
  • Equips store staff with up-to-the-minute stock information – allowing them to assist customers better

Meaningful KPIs in the store

When measuring KPIs, the practical benefits for retailers are paramount. Three areas of data in the store can be distinguished:

KPIs for Store performance

 

Inventory Accuracy

Whether five or 800 stores, KPIs for measuring inventory accuracy are significant for every retailer and still represent one of the main challenges in today’s business. Retailers, on average, can actually make accurate statements on just about 75% of their inventory (based on SKU level). However, this is not enough to meet customers’ expectations for omnichannel services. Therefore, inventory transparency and corresponding KPIs are essential for retailers´ success.

 

Product availability

Product availability on the sales floor, also known as on-floor availability, is the second central parameter. Initially, it is less about the exact position and more about the fact that the articles are on the sales floor – after all, only items that are actually available can be sold. This key figure can be combined with an alert system that makes sure not to fall short of the defined minimum availability. Complementary to classical ERP-systems, RFID-based merchandise management takes the data granularity to the next level, by knowing exactly at each moment in time if products are really on the salesfloor or still lingering in the backroom of a store.

Detego RFID Software Dashboard

KPIs for individual product & campaign performance

 

Product dwell-time on salesfloor

Having data on item level, store managers are also given important information on the dwell times of articles on the sales floor. This information is more valuable than simple sales data, as it tells us the average time individual products spend on the sales floor before being sold. This can be used to gauge whether products are performing & corresponding with the sales plan. Common recommendations made from this data include moving items do a different location on the salesfloor (i.e. adjusting the planogram)  or relocating excess inventory to another store – both of these measures reduce profit-sapping inventory bloat and end-of-season markdowns.

 

Fitting room conversion rate

One of the most famous KPIs in e-commerce is the conversion rate that describes the ratio between purchases and website visitors and also provides information on certain items that were already in the shopping cart, but for some reason have not been purchased in the end. Specifically, this aspect was incredibly difficult to measure in the store for a long time but can now be measured in fitting rooms using IoT and RFID technologies. This provides meaningful insights into how many, and above all, which articles does a customer take into the fitting room and which one does she/he actually buy?

Detego Reports - Fitting Room Conversions

KPIs on customer engagement and service quality

On an operational side, KPIs can also be used to manage service quality. We’ve already covered product-availability and stock accuracy, which affect the customer just as much as the store with out-of-stocks or unavailable sizes being all-too-common pain points. The replenishment rate provides another angle to combat this, as it shows how quickly articles are replenished on the sales floor.  On the other hand, the fitting room response time describes how quickly sales personnel handle customer requests coming from the fitting room. The KPI “Conversion rate per campaign” shows the success of a campaign and if campaign-specific countermeasures are necessary.

Detego Retail Analytics Dashboard

Turning data into actions

The final lesson brick-and-mortar retail should learn from the webshop? Turning data into actions. Since nobody needs a data graveyard, any analysis needs the goal of creating immediate actions to improve. Today’s systems help the management team as well as the store personnel with concrete and automated recommendations for actions to take. This saves time in the decision-making process, unburdens the sales personnel, and enables them to do the right things at the right time.

KPIs should be suitable for everyday business use. Presented visually and self-explanatory, they need to be linked to clear recommendations for actions to take. This frees up store personnel time and provides a data-driven way of optimization. Examples range from simple in-store replenishment advice, i.e. “The minimum stock for article #47699-0010 has been reached – please refill three pieces” to more advanced topics, e.g. to choose a different placement in the store for a specific article when the dwell time on the sales floor is too high compared to other stores. Advanced systems can even utilise AI and Machine learning to automate and refine certain processes, like adjusting store planograms and creating optimal pick paths when replenishing stock.

Detego Instore Edition Refill Advice

Conclusion

Brick-and-mortar retail needs support and an update to the toolbox when it comes to analysis and measures. Not only does the sales personnel benefit from intelligent recommendations for action, but the management team also gains efficient control mechanisms across the entire store network. Decisions are made based on real-time data and therefore allow timely action. Ultimately, the end customer is pleased about a first-class service, which – thanks to the individual and informed advice through the sales personnel – even exceeds the standards of the online retail.

Webinar

Item-level Reporting from
Source-to-Store

Register for this webinar where we outline the impact of digitisation on supply chain analytics and operational efficiency. Covering the wealth of item-level data unlocked by RFID, the presentation will explain the new KPI’s available for modern supply chains and their impact on retail operations.

🏪 What is in-store fulfilment?  

In-store fulfilment, also known as ship-from-store, is an Omnichannel retail strategy that essentially involves utilising retail stores as miniature distribution centres. This allows eCommerce orders to be fulfilled and shipped to customers from either the primary DC or a nearby store. Having multiple options for fulfilment available means retailers can take some pressure off DC’s and offer customers more stock and faster delivery by utilising nearby stores.

Detego Ship-from-store

📦 Could ship-from-store be a viable strategy during the COVID-19 pandemic?

The use of in-store fulfilment and ‘mini DC’s’ has been steadily growing for years, due to both the continued growth of eCommerce as well as the inherent business benefits listed below. In the current climate of COVID-19, with stores closed and the immediate-future uncertain, leveraging closed stores as DC’s could potentially help alleviate the increased pressure on eCommerce operations and help brands achieve business continuity during this time. The practicality of this will vary between brands and even countries, but its possible a reduced small team of staff could run as an effective warehouse during the coming months.

🚚 What are the advantages of using stores as miniature Distribution Centres?

  • Takes some pressure off DC’s, meaning a brand can handle increasing eCommerce orders without needing to invest in additional DC’s
  • Reduces shipping costs by moving distribution points closer to destination
  • Increases delivery speed as orders are shipped from nearby stores
  • Idle inventory that is sitting in stores can instead be sold through eCommerce – increases margins by preventing seasonal mark-downs.
  • Ship-from-store is an effective and profitable way to prevent inventory stockpiling up at the wrong locations
  • Retailers can offer customers more products i.e. not just inventory available at the DC
  • Alternative ‘mini-DC’s’ offer fulfilment options if the primary DC is temporarily shut down or disrupted.
  • Leverages staff during slow periods for stores or if stores are temporarily closed
  • Offers more products/sizes to customers (see figure below)
Product availability increase from ship from store

☑️ What is required to leverage stores as DC’s?

Whilst the benefits are huge, getting in-store fulfilment right is a fine balance and requires a certain amount of technology and digital integration across the supply chain. Retailers who attempt to offer ship-from-store (or any omnichannel capability) without these prerequisites will struggle. According to the Accenture study ‘Transforming Modern Retail’, Survey respondents that offer ship-from-store claimed that 31 percent of such orders triggered a split shipment, a result of not having the right foundations in place.
So, what do retailers need in order to utilise in-store fulfilment?

  1. Inventory Visibility – First and foremost, for cooperation across and between shopping channels, (i.e. for eCommerce to leverage inventory outside of their primary DC) brands need to have inventory visibility across their supply chain and stores. This view of stock needs to be unified between all channels and be as up to date as possible in order to achieve a ‘single point of truth’ for a brands merchandise.
  2. High Stock AccuracyHaving visibility over all of a brands merchandise is a start, but if this information is not highly accurate, cross-channel initiatives like this one will be fairly ineffective. Retail store inventories can be as low as 70% accurate when it comes to item-level product information. If this is the baseline for ship-from-store, it will result in either split shipments or cancelled orders – resulting in high costs and disappointed customers. For Omnichannel options like this, accuracy needs to be near 99% to confidently offer advanced purchasing options to customers.
  3. Investment in StoresTo facilitate in-store fulfilment a certain amount of investment needs to be made for stores. This may involve slightly altering the layout of a store, or hiring extra staff, depending on the business. More crucially, investment may need to be made in technology to achieve the accurate inventory visibility required to offer ship-from-store. This may include advanced inventory management technology like RFID.
  4. Maintained Store Inventory levelsOnce this is in place and retailers are utilising in-store fulfilment, care needs to be taken to maintain the balance of store inventory between stock available to be used for eCommerce fulfilment and stock that is available for sale in the store. This is a fine balance to maximise sales between both channels. Retailers must ensure ship-from-store orders do not cause out-of-stocks for the brick-and-mortar store that is fulfilling them.
Challenges of offering ship-from-store
Solving Retail's top 10 needs with RFID

eBook

Solving Retail's Top 10 Needs with RFID

Discover how retail RFID is changing the industry for good. This eBook will guide you through the top 10 needs identified by retailers to ensure sustainable success in the modern environment. Explore the common challenges preventing retailers from achieving their goals and learn how applying smart RFID-based solutions delivers consistently good results.

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

The Current Impact of COVID-19 on Retail

Supply Chain Chaos

Retail manufacturing and production have been heavily disrupted by COVID-19, particularly in China. In apparel and textiles, China is still the world’s biggest exporter. Even apparel manufacturers based elsewhere are often reliant on textiles imported from China. China being hit by COVID-19 and having to shut down factories and production has caused huge supply chain and production disruption around the world, with luxury retailers like Burberry and Prada being hit particularly hard.

As more and more countries are affected, supply chains may be disrupted further downstream. Larger distribution centres that service multiple countries could be most problematic, not only for fears of contamination but stores in countries that aren’t as heavily affected could have their product supply disrupted. On the other hand, since China was affected by the pandemic first they may recover first, so by the time other countries are beginning to come out of lockdown and preventative measures, this supply bottleneck may well be clearing further upstream.

Shutting of physical stores & reduced footfall

Across the globe  brick and mortar sales are suffering. Stores are either being closed on government orders or simply being closed by the retailer to protect staff and public. The stores that remain open are being hit by the heavily reduced footfall as the majority of the public attempt to avoid unnecessary social contact.

The effects of this on revenue have the potential to be fatal. Lost sales are damaging enough, but when you factor in continued overheads for stores like rent, wages and inventory, it is a dangerous situation. Only time will tell how damaging these effects will be on retailers across the globes, with the main variables being:

  • How long areas remain affected & stores are closed for.
  • To what extent a retailer’s eCommerce operation can pick up the slack (more on this below)
  • How big or financially stable the retailer is prior to the epidemic – large tier 1 & 2 retailers may be able to shoulder the burden for longer than their smaller or independent counterparts.

Spike in Online Sales

With many stores closing and consumers avoiding most of the ones that remain, it’s no surprise there has been a spike in online shopping due to COVID-19. This is exemplified by the eCommerce kings Amazon who are taking on 100,000 extra staff across the US as it tries to keep up with a surge in orders sparked by the pandemic.

Whilst its good for both the retailer and the consumer that most brands now operate both on and offline, the sudden shift in proportion between online and offline sales may cause retailers problems if they struggle to keep up with demand. These issues include fulfilment centres not coping with increased demand and the amount of returns that come alongside online orders. 

 The other major consideration for many retailers is the typically smaller margins on eCommerce orders compared to brick and mortar sales, meaning that they may not be able to rely on their eCommerce branch to survive for too long.

Future Considerations

So, what might a post-COVID-19 retail landscape look like? Will retailers take lessons from the crisis and bolster their infrastructure so they are more prepared for similar events in the future? Or once the dust settles will this be counted as a freak event and forgotten about? Here are possible considerations for retail life after COVID-19.

Continued advancement of e-commerce

This was bound to happen even without the pandemic, but COVID-19 may just have accelerated, or at the very least highlighted, the growth of online shopping and its advantages over physical retail. It is likely that retailers with a strong eCommerce offering will come out of the slump in a much better position. 

For multi-channel retailers who had to rely on their online sales more than ever during COVID-19, evaluation into their eCommerce operations, particularly at their efficiency and smaller margins, are very likely. This may take the form of bolstering their supply chain technology and distribution centres, to increase efficiency and reduce running costs to see better margins in the future.

Diversifying manufacturing facilities

Steps have been gradually made in this area even before COVID-19, but in the aftermath of the pandemic, this may be a real concern for retailers and manufacturers. The problem isn’t China, or anywhere in particular. The problem is having such a heavy reliance on a single market, which then becomes a single point of failure for the business. Profit margins will always be a priority, but more cautious retailers and manufactures may look to diversify their production operations to be less reliant on a single region in the future.

Source-to-consumer traceability in supply chains

This is another area that was already a growing priority for many retailers. In the aftermath of COVID-19, it is likely to be even more of a concern, for both retailers and consumers. Not only does traceability help create smoother operations in the supply process, but it can offer assurances to consumers who may have growing concerns about where their products are sourced. With item-level traceability being where the industry is headed, consumers will be able to judge for themselves that their food, clothing and other things they bring into their homes is safely made and transported.

Automated warehouses and supply chains

The other element of the retail supply chain and distribution process that may change in the future is a heavier reliance on automation. This will make supply chains and distribution centres more robust, so able to withstand increased pressure. Automating processes like exception handling also means DC’s can run faster and with a leaner workforce.

Why may retailers look at automating supply chain operations in the future?

  •       More efficient – can deal with larger quantities of goods
  •       More accurate can deal with larger demand without creating bottlenecks
  •       Takes the reliance away from human resource constraints

Self-service stores and cashierless checkout 

Finally, could the coronavirus be a catalyst for increased investment in self-service technology like cashier-less stores? We’ve seen retail giants like Amazon and Sainsbury’s explore these initiatives, but they have yet to be adopted on a large scale. Could that change? It may feel like a knee-jerk reaction to invest in technology that supports reduced human interaction but, particularly for supermarkets, solutions like Marks and Spencers’ mobile scan & pay could alleviate pressurised checkout lines.

Conclusion

We’ve gone over the major concerns for retail, the possible impact they could have, and the potential knock-on effects of the COVID-19 pandemic on the retail industry. But the fact is no one really knows. We are in uncharted waters, and for now, retailers are just struggling to ride the wave to the other side.

What we do know is this will pass. The main question for retailers that will determine the severity of the pandemic’s impact is when. Whilst this isn’t the second ‘retail apocalypse’, it is more than likely that the retail landscape that comes out of the coronavirus crisis may be very different from the one that went into it.

Want to learn more?

Retail's New Normal

Apparel Retail’s New Normal: COVID-19 Impact and Future Trends

Webinar

Now stores are facing new social distancing guidelines, the formula for customer experience has changed. With reduced foot traffic and higher levels of eCommerce, the digital evolution of the retail store is now or never.  Join us on the 16th of June as we dive into the physical and digital transformations behind retail’s ‘new normal’.

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

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

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

1) RFID has Lowered in Cost

 

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

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

Handheld RFID reader performing a stock take

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

 

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

 

How has RFID become more feasible for retailers over time?

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

3) RFID Implementation has Become Easier

 

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

 

How has RFID implementation changed for retailers?

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

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

 

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

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

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

An example of a scalable RFID solution: Divided into features

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

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

Summary

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

Want the latest retail and retail tech insights directly to your inbox?

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

(For an introduction to combining AI and RFID see this article)

When it comes to using Artificial intelligence (AI) and Radio Frequency Identification (RFID) in retail for process optimisation, the majority of use cases involve management or ‘HQ’ level decision making. These include automating functions such as store planograms and stock optimisation between stores.

However, AI can also impact retail on a much more micro and everyday level, actively assisting store staff in one of their most common daily routines –stock replenishment.

Using RFID and the information it collects from stock reads, we can produce AI pick lists to optimise and guide staff through the replenishment process. Not only are we combining RFID technology and AI algorithms to produce these pick lists, but existing RFID processes are already assisting staff. When you put all this together, replenishment become a walk in the park.

Let’s start at the beginning…

RFID-based Stocktake and Replenishment – The backbone of modern stock management

With RFID, store staff can do regular (often daily) cycle counts of the entire store quickly and easily. This is simply done by walking around the backroom and salesfloor with a handheld reader that counts items that are several feet away, using radio frequency. An RFID application or software, like the Detego platform, will then compare the actual stock levels of the shop floor with the desired counts (i.e., planogram), and tell staff exactly what needs to be replenished from the backroom.

Stock Take and Replenishment
Detego Store application screenshots

So far, what has just been described has been entirely RFID-based and is the standard process for RFID in retail. This is already far easier and more accurate than traditional methods, not to mention the actual effect of the technology like higher stock accuracy and product availability. But why stop there?

Taking it one step further – AI pick lists for ‘mapping’ the perfect replenishment path

Normally, even with the support of RFID, the store staff are then left to fulfil replenishment by themselves, using the list provided by the application. These pick lists are often only sorted by product features such as name or price. Because back rooms can be quite large in bigger stores, or densely packed in smaller ones, the staff’s ‘pick path’ can be incredibly sporadic. This is made even worse in the case of new staff who don’t know the layout of the backroom by heart, or even experienced staff if stock has simply been moved around and updated with the start of a new season.

Current Pick Paths

By utilising new tag localisation techniques, it is now possible to locate where items are in the backroom in relation to each other. This is done during the regular RFID stocktakes that are already taking place, utilising data mining and machine learning pipelines without any need for additional hardware or specialist tags. Using this information, we can create automated AI pick-paths that, using a mobile application, guide staff through replenishment and present the most efficient order to collect items in.

AI Pick Paths

The above example is designed to present the quickest possible replenishment route for staff, so is solely using items’ distance from one another to calculate a pick list. However, AI pick lists can process the replenishment list in a number of ways, depending on what the store wants to focus on.

Replenishment paths could take additional factors such as product value or expiry date into account, alongside the location of the items. It would then look for items that fit this rule and are nearby one another in the backroom. For example, a pick list targeting on-floor-availability would group nearby items that are running low on the sales floor, so that these items are refilled first to speed up the replenishment process whilst also combatting loss of sales from out of stocks.

Benefits of AI-pick lists

Did we spark your interest?

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

Webinar Recording: Combining AI and RFID Taking Retail Inventory to the Next Level

 

Artificial intelligence (AI) is becoming increasingly utilised within the retail industry. One of the main challenges with the technology is having enough relevant data to be utilised or ‘fed into’ an AI system. With Radio Frequency Identification (RFID) providing huge amounts of accurate item-level data for merchandise, the two are a match made in heaven.

This webinar cover AI’s applications for stock optimisation and how machine-learning can ensure products are always in the right place at the right time, including:

  • AI-driven, automated planograms for optimised product availability
  • Visual merchandising and ‘Money mapping’ in stores to monitor and increase sales.
  • How RFID stock-takes and AI pick-lists combine to make replenishment faster and more accurate than ever
  • How machine learning smart fitting rooms are bringing accurate cross-selling into the physical store
  • Using AI for demand prediction and stock optimisation across store networks

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

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

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

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

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

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

What is a single stock view?

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

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

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

A single view of stock must be:

A single point of truth for retail inventory must be:

Single Stock View Diagram

What are the benefits of a single stock view?

How do you achieve a single view of stock?

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

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

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

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

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

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

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

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

Diagram of RFID tracking across a retail supply chain

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

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

Want to see how RFID can transform your business?

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

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

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

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

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

 

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

Fun retail

 

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

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

 

Augmented reality

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

 

Smart Fitting Rooms

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

Smart Fitting Room

Virtual & Robotic store assistants

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

Fast retail

 

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

 

Advanced Points of Sale 

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

 

RFID’s smart inventory

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

 

Omnichannel services

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

Good customer experience does both

 

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

Did we spark your interest?

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

The UK’s first completely Cashier-less grocery store 

The British supermarket Sainsbury’s has recently announced the end of its cashier-less store trial, concluding that ‘it’s clear that not all our customers are ready for a totally till-free store.’

The initiative involved the UK’s first till-free grocery store, utilising a mobile app with smartshop scan, a pay & go technology where customers can scan items with their mobile’s cameras as they move through the store.

Whilst there is huge potential in this technology which Sainsbury’s are trailblazing for, the trial did certainly have some initial setbacks. The pilot store experienced long lines at the help kiosk, due to many customers wanting to pay with cards and cash.

In response to this, Sainsbury’s have added a manned till and two traditional self-checkout tills to support the store’s mobile payments. Whilst this does mean the concept of a completely cashier-less store has been shelved for now, the mobile-scan option was clearly a sucess, with Sainsbury’s  adding the payment option to eight additional stores.

Convenience isn’t one-size-fits-all

The first thing this technology-project highlights is the necessity of piloting new solutions before rolling them out on a larger scale. Sainsbury’s not only got this right, but they clearly paid attention to their customers during their pilot.

Whilst it’s possible Sainsbury’s were partly-motivated about the possibility of totally cashier-less stores (and the operational benefits those would bring), they rightly put their customers first and acknowledged an important truth: Convenience isn’t one-size-fits-all.

Improving customer experience is typically one of the main targets for technology investments in the retail industry. But doing this effectively is often about giving the customer more options, rather than just replacing the existing ones with something more modern and innovative.

Ultimately, solutions like this are designed to make shopping faster (One half of a strong customer experience). However, if you take options away from customers, especially ones they will naturally expect to have, you can slow the experience down and inadvertently add a friction point to your store.       

Key Takeaways:

  • When releasing new technologies, piloting the solution first in a small number of stores is crucial.
  • When evaluating the success of pilots, it’s important to be unbiased and measure the full range of impact of the technology – This includes qualitative results as well as the regular measurable statistics.
  • When improving customer experience, technology should look to give customers more options rather than replace existing ones that they may have grown to expect.

Did we spark your interest?

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