Webinar: Item-level reporting from source-to store
Digitisation and data go hand-in-hand. As retail supply chains continue to go digital, a wealth of item-level data on the flow of merchandise through the supply chain is unlocked. In the future, the winners and losers of supply chain management will be determined by who leverages this information more effectively.
Join Detego’s Chief Data Scientist, Simon Walk, as he presents the cutting edge of supply chain analytics and how digitisation is taking the guesswork out of retail logistics.
This webinar covers:
• Item-level tracking of Items along the Supply Chain to deliver accountability, visibility & traceability
• Effective traceability which combats supply chain shrinkage and counterfeit products.
• Using heuristic & Machine Learning based Algorithms to detect supply chain irregularities.
• Using dwell-time data to optimise operational & Supply Chain processes
• Analysing throughput data across factories, DCs and stores
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.
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)
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?
- 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.
- High Stock Accuracy – Having 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.
- Investment in Stores – To 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.
- Maintained Store Inventory levels – Once 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.
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Complete Supply chain visibility was once an optional bonus for retailers, but in the modern industry it is becoming more and more of a necessity.
Whilst in the past, limited tracking of shipments in the supply chain was commonplace, in the modern environment with its more complex supply chains, delivery options and increasing customer expectations, retailers need to do more.
This isn’t just us saying so, retailers recognise this too. According to a report by Zebra Technologies, 72% of retailers are working on digitizing their supply chains in order to achieve real-time visibility.
What Is Supply Chain Visibility?
Having visibility means being able to accurately track products and shipments throughout the supply chain, from the manufacturer, to the distribution centre and finally to the store. Having this visibility prevents shipping errors, improves operational efficiency and allows retailers to leverage products to service their customers better.
Why Do Retailers Need Visibility?
Managing supply chains effectively is always a priority for retailers. But as these supply chains get bigger the challenge becomes more daunting. Visibility is needed to align such large operations, and this is before you add new pressures like omnichannel, traceability and online orders.
Additionally, supply chain visibility is arguably even more important in ecommerce than for pure-play brick and mortar retailers. Not only do you need to know exactly what stock the fulfilment centre has, but what stock it is due to receive and when. And since pure-play brick and mortar retailers are now few and far between , this now means that most retailers’ supply chains need to be more advanced and transparent than previously required.
This is before mentioning the divisive omnichannel word, which often requires even greater transparency and synergy between stores and distribution centres and includes multiple delivery options.
There are also more classic supply chain challenges that can be helped by achieving visibility. General inefficiencies and inaccuracies can be reduced by adding more checkpoints throughout the supply chain – particularly when these are done at an item level, and not shipment or carton level.
Adding this visibility also makes better communication between different stages of the chain possible, which leads to smoother operations. Having visibility at an item-level also makes traceability of items through the supply chain possible. This can make a massive difference in combatting supply chain shrinkage, and in some cases the grey market.
The ‘New’ Challenges:
Multi/omni-channel businesses – It seems like an age ago, but traditional retail supply chains went in one direction and to one place – stores. Now almost all retailers also run their businesses online meaning their they operate on multiple sales channels, therefore, their supply chains service far more destinations than before.
Multiple delivery options – A relatively recent challenge created by the growth of online and the already mentioned omnichannel purchasing options. Retailers want to offer their customers as much stock and as many purchasing options as possible, but without the technology to support it, this can cause problems. In an Accenture survey, respondents claimed that 31 percent of their Ship from Store orders triggered a split shipment.
Customer expectations – Customer expectations has shifted. In a 2019 report, it was found that Half of shoppers reported abandoning a purchase due to a lack of cross-channel buying options. This is a major impact on sales, and many retailers are starting to adapt to the change in expectations.
The Old Challenges:
Supply chain inefficiency – Supply chain inefficiencies and miscommunication through “Chinese Whispers” are costing UK businesses over £1.5bn in lost productivity according to analysis of industry data from Zencargo.
Supply chain shrinkage – According to the National Security Survey, businesses in the United States lose $45.2 billion through inventory shrinkage a year. Whilst retail stores make up the majority of this, supply chains still experience large amounts of inventory shrink, particularly when they have no visibility of products.
What are the benefits of having supply chain visibility?
Better customer service
Improved inventory control
Shorter cycle times
Smoother operational processes between stores and DC’s
Better data for more intelligent business decisions
Reduce out of stocks
Track and trace products
Offer effective omnichannel services and delivery options
How Do You Achieve Supply Chain Visibility?
Implement a system that works at an item-level (not whole cartons)
Accurately track products at as many points as possible during shipping
Inbound and outbound counts at every stage of shipping
Implement effective exception handling
Use a cloud-based system to integrate all stages of the supply chain and achieve as close to a real-time view of merchandise movement as possible
Send advanced shipping notices (ASN’s) so warehouses and stores now exactly what they’ll receive
Use this visibility to enable traceability of each item throughout its journey
The Detego Platform allows retailers to gain complete visibility over their operations
If you’re looking for a solution or partner to help achieve better supply chain visibility, consider our platform!
Using RFID item level-tagging, the cloud-based Detego platform gives each individual item a unique digital identity. Items are then tracked from factory to shop floor using radio frequency identification (RFID) methods. RFID makes this possible as inbound, outbound and even exception handling can then be done through RFID reads – which are fast, accurate and can be done without opening cartons.
Since RFID works on the individual item-level, the result of this is complete visibility of the supply chain. The platform utilises the IoT to create a complete overview of every single product in the supply chain, as its cloud hosted this can be close to real-time and is the ‘single point of truth’ for the entire business.
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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.
A single point of truth for retail inventory must be:
What is gained from having a single stock view?
Delivering a single stock view with RFID
So how do you achieve this reliable and complete view of stock? A single view of inventory starts with the single item. By giving each item an RFID tag, you’re 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.
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. 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.
‘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
The retail environment has never been more demanding than it is today, thanks to fierce competition, the growth of e-commerce, and consumers’ high expectations for seamless shopping experiences. It’s a situation made even more difficult by a lack of inventory visibility, the complexity of supply chains and the sheer variety of products brands are faced with.
While retailers have access to a growing number of solutions to these issues, RFID (Radio Frequency Identification) is the only one that’s proven to consistently meet retailers’ needs for leaner processes, accurate inventory and real-time data analytics.
This webinar covers:
• The five most important needs identified by retailers and their effect on business
• How RFID-based systems and processes can be applied to solve each need
• What financial and operational benefits can be gained by doing so
• How retailers can further unlock the power of RFID to offer a truly seamless and connected shopping experience
The 6 Key Benefits of RFID in Retail
RFID (Radio Frequency Identification) uses radio waves to track and identify tags attached to objects. The tags contain electronically stored information and are counted or ‘read’ by either handheld or fixed RFID readers.
In many ways RFID is used in retail as an alternative to a barcode system (although it doesn’t have to replace barcodes entirely). The more advanced technology involved in RFID mean it has a far greater level of accuracy and efficiency when it comes to counting inventory. As a result of this it has far broader applications in retail, most of which are built of off the back of this reliable inventory visibility.
By implementing RFID retailers can on average increase their revenue from 5-15% depending on the business. This on top of a margin increase of up to 1% and 10-15% lower working capital due to optimised inventory levels.
According to research in 2018, 69% of retailers cite a significant level of adoption, and this number is continuing to rise.
Due to the ease and accuracy of RFID stock counts, retailers using the technology can reliably achieve full item-level inventory visibility across their stores and supply chains. Crucially, due to the speed of RFID inventory counts, this can be achieved whilst actively reducing the labour intensity of operational processes. This accurate and up-to-the-minute inventory information is the backbone of so many of RFID’s uses in retail (including many of the points discussed below).
One crucial aspect of modern retail that relies on having accurate inventory visibility is Omnichannel retailing. With a complete and up-to-date view of stock across all channels, it is possible to open up the inventory of your entire store network to customers, providing a better customer experience and increasing sales.
Benefits of item-level inventory visibility
- Improved shipping accuracy
- Excellent baseline for advanced omnichannel retailing
- Produces more data for better insights
- Reduces inventory size (and therefore working capital) significantly
- Increased customer satisfaction from reduced out-of-stocks and a more connected experience
Increasing Product Availability
Ensuring a high product availability is vital to maintaining retail sales. Despite this, low on-floor product availability and out-of-stocks are an alarmingly common problem in the industry, causing unnecessary lost sales as a result of inefficient replenishment processes and stock inaccuracy. This latter cause is practically removed completely by RFID, with typical stock accuracy being increased to 99% from the standard 60-80%.
Additionally, RFID platforms provide an unbeatable basis for efficient and reliable replenishment processes. The main advantage these platforms have is the item-level and real-time inventory visibility gained from regular 99% accuracy stock counts.
How does RFID increase product availability?
- Makes regular cycle counts possible with efficient RFID stock reads
- Removes stock inaccuracy (from 70-80% to 99%)
- Creates complete item-level view of stock between both backroom and sales floor
- Item visibility makes replenishment easier and more accurate
- Real-time view allows for replenishment alerts for when items/sizes are running low
- Item-level data from RFID allows for advanced, even AI-assisted planograms for individual stores
Supply Chain Traceability
We’ve discussed the difference item-level visibility makes for stores, but when it comes to supply chains the benefits are just as great. With RFID, inbound and outbound reads become far easier, and are done on an individual item level rather than SKU (stock keeping unit). This means each item is accounted for at each step of the supply chain, rather than just shipments or boxes.
This level of stock visibility also drastically reduces the rate of shipping errors or picking mistakes as they are detected by RFID readers and corrected by warehouse staff during exception handling or outbound reads.
Additionally, the location or status of items and shipments are visible in real-time, so stores and DC’s can easily track shipments and know exactly what they will be receiving. This makes any individual item fully traceable, as time and dates of when the item passed each read point in the supply process can be stored.
Benefits of RFID in the supply chain:
- Item-level visibility across entire supply chain
- Trace items against individual shipments
- Smoother operational processes
- Track shipments for delivery
- 100% inbound and outbound shipping accuracy
Increasing Process Efficiency
The difference in process efficiency from using RFID in retail is extensive, at every end of retail, be it the factory or the shop floor. An RFID reader, regardless of whether its fixed or a handheld, can read hundreds of individual items at once. Crucially though, as each item has a unique ID, they can never be read more than once. The signals also do not require line of sight to be read.
Naturally, this makes RFID inventory counts and inbound/outbound checks incredibly fast and reliable. In the case of store inventories, RFID has been found to reduce cycle count times by a staggering 96%. This therefore means they are far more convenient to perform and can be done multiple times in a week rather than a year.
Processes transformed by RFID:
- Cycle counts/inventories
- Fast & Efficient Inbound & Outbound reads
- RFID-enabled picking and packing
- Mobile guided replenishment from backroom to salesfloor
Providing Real-Time Data
Analytics and data is one area that e-commerce is ahead of physical retail. This is largely due to the fact that everything online can be measured, whereas retailers don’t really know what’s happening with their stores and customers in any specific detail, and the stats and data they do collect are often historical and at risk of being outdated.
However, with RFID this can all change. The simplest and most effective use of the data allows retailers to better leverage their greatest assets; their products and their stores. Quality data and analytics can allow retailers to ensure merchandise is in the right place to be sold. Information on which stores are performing better or worse is a basic retail KPI, but with specific item data, RFID produces far more detailed insights. This includes how well individual items are doing in specific stores, right down to specifics such as which sizes of items are selling better where. Insights such as these are naturally actionable, meaning retailers can take steps to move or reinforce stock at specific stores.
Data insights and results possible with RFID:
- KPI based performance tracking
- Detailed merchandise data & Analytics
- Operational excellence
- Actionable recommendations
- Compliance tracking
- Eliminates reliance on historical data
- Predictive capabilities for inventory counts and merchandise management
Transforming Customer Experience
There are many effects of RFID in retail that go beyond simple operational benefits to actively improve the customer experience. At the most basic level, this includes things already mentioned like increasing product availability, offering convenient omnichannel services and freeing up store associates to spend more time assisting customers.
However, because of the real-time inventory visibility it provides, RFID can go way beyond this in terms of improving the customer experience. For example, with reliable and up-to-the-minute stock information stores can utilise technologies like chatbots or smart fitting rooms to assist customers with their queries, supply information about other items or sizes available and even cross-sell to customers in the store.
What ways does RFID improve the customer experience?
- High product availability
- Store associates have more time for their customers
- Convenient omnichannel services
- A connected experience between online and offline
- AI-powered chatbots delivering assistance and product information via mobile.
- Smart fitting rooms providing a hugely improved fitting room experience.
- RFID-enabled Point of Sale – including self-checkout services
Just a moment, I have to check…
Making a great shopping experience can happen in seconds, but can also fail just as quickly. The customer who is ready to buy a desired article is often left standing in the aisle, being asked by the shop assistant to wait. He/she goes off to search for the article in the stockroom, perhaps call another location or check with the manager. If the article cannot be found, the sales interaction usually comes to an end with something like “Sorry, we don’t have it.”
The possibility that the desired item, say a skirt in size S, could be available in another store is something that the customer has to find out for themself. Of course they could try their luck online, and maybe even order it in the online shop if it’s still in stock.
That’s a shame. All that just happened because the shop assistant did not have the right information.
Lacking item visibility is a massive problem in the fashion industry, and almost all retailers suffer with lost profits because of it:
- If the article is not on the sales floor, it cannot be sold
- If no one knows that the article is in the stockroom, on display in the shop window or in the changing room, it cannot be sold
- If the sales person cannot give the customer information on the availability of an article immediately, a sale is missed and the customer is disappointed
- If the click & reserve inventory is not kept in sync with the store inventory, the reserved article cannot be sold
- If the article surprisingly “reappears” during inventory, for example someone finds it in an unopened box, it’s too late
- If there’s no item visibility in the individual channels, then flexible redistribution will not work
Getting the merchandise to where it is needed most
It’s the dream of every retailer: the merchandise offered is presented to precisely the customer who would like to buy it. With 5,000 articles in 700 stores in a variety of sizes, even the most experienced retailer can no longer make decisions by gut feeling.
- Sizes should not be evenly distributed among all stores
- Buffer stock should not clog up the stockroom
- Excess inventory that later has to be written off should simply not exist
Intelligent Merchandise Distribution
One is always wiser after the fact, for example at the end of the fiscal year or of a collection season, retailers know which items sold well in different stores and which did not. But then it’s too late. The merchandise ends up in the factory outlet store and eventually sold at discounted prices, the amount written off remains high, sales stagnate, etc.
However, retailers should immediately know which articles are sold well in which locations. Also, information on items that need to be reordered as well as the prevailing aging structure of articles at item-level per store is needed. To take the right decisions, it would be wise to have access to reliable real-time data in forms of dependable analysis and clear recommendations.
Actively manage your network of stores using real-time data:
- Real-time control over inventory and more efficient replenishment
- Quicker reordering
- Reduction in reserve stock
- Less merchandise in the channels, combined with greater inventory accuracy
- Smaller lot sizes, more precise control over the flow of merchandise
- Selling out collection merchandise at the planned margin, not via outlet sales
- Fast recommendations for activities to optimise the store
- Real-time dashboards promote the right decisions being made
- Rapid relocation of sale merchandise between the stores
Due to lack of an overall stock view, retailers and in particular, their sales personnel are not able to provide customers with reliable information e.g. on article availability. This results in disappointed customers who eventually buy somewhere else, which in turn leads to an enormous loss of revenues for retailers.
Get new insights on how a single stock view significantly changes the fashion retail industry and what positive effects come with it.