Managing the flow of merchandise in retail supply chains has always been a challenge.

Traditionally, the large quantities being dealt with meant that visibility of merchandise was poor. Items were tracked and accounted for in rough quantities, not consistently or accurately enough to hold suppliers and distribution centres accountable for mistakes and inaccuracies. This meant a fair amount of leakage, either of efficiency or directly in the form of physical shrinkage as items become ‘lost’, damaged or shipped incorrectly.

Fast forward to the present day, with advanced technology like RFID and the IoT, and the standard for retail supply chain management has changed. ‘Supply chain 4.0’ can effectively track and trace individual items from source to store, utilising RFID technology to track individual products and the Internet of Things to store and leverage this information on a digital platform or cloud.

The data and visibility provided by such digital supply chains are extremely valuable, allowing retailers to:

●Quantify the performance of the supply chain (visibility),

●Identify “the last known location of items” (accountability),

●Inspect the history of items and even raw materials (traceability).

Here are the 3 fundamentals of retail supply chain optimisation using item-level data:

Visibility

“To be able to see…”

Supply chain visibility is a growing priority for retailers. According to a report by Zebra Technologies, 72% of retailers are working on digitizing their supply chains in order to achieve real-time visibility. Knowing exactly what is in the pipeline allows retailers to control inventory more efficiently, improve operations between stores and DC’s as well as offer effective omnichannel services and delivery options.

However, the majority of supply chains don’t have anywhere near this level of visibility, as 62% of supply chains operate with a limited view over merchandise flow. This is because goods move along the supply chain in such large quantities, and most supply chains only account for cartons of items, rather than the items themselves.

For example, cartons of T-Shirts with quantities of around 50 are commonly sent out, but without RFID accounting for individual products, you can’t know if the quantities are correct. In other words, you are guessing what should be there as you do not have the visibility to know what is there. This may result in a store believing they have less or more products than they actually do. If however, they do identify the mistake, without visibility over the supply chain there is no way of knowing where the error occurred.

RFID technology can make every step along the supply chain visible while also providing a meaningful context, using digital ‘touchpoints’ to track items throughout their journey. RFID Tunnel installations can even automatically process these cartons, to identify shortages and surpluses all without opening the box. This way large inbound and outbound shipments can be processed quickly, accurately and down to the item-level.

Traceability

“To be able to verify the history…”

If supply chain visibility allows us to know where items are right now, traceability means being able to look back at where they have come from. As items are tracked through the supply chain with RFID, a record of all read events is stored on the cloud. Not only this, but the data from the product journey can be combined with similar data from materials used in each product. This information means retailers can not only see the last locations and events of items but they can also:

  • Inspect their history (inception to sale)
  • Change layers of abstraction (e.g., from item to carton)
  • Go back to the source (materials sourced from cotton farms)

Having the ability to trace individual items back through the supply chain allows retailers to identify where shrinkage occurs and trace products back to the source in the case of a product recall. The traceability is also key as it involves keeping a permanent record of supply chain flow, not only does this mean valuable data, it also gives supply chain leaders the concrete evidence to hold suppliers accountable…

Detego Track and Trace Screenshot

Accountability

“To be responsible…”

With digital track and trace technology in place, retailers will have access to the all-important last known location of items.

This means it is possible to identify where errors occur and hold supply chain and retail partners accountable. On the other hand, it can also serve as proof of service.

This information is also invaluable when it comes to brand protection. Not only can RFID technology easily identify counterfeit products but using the last known location of products allows retailers to identify how legitimate products end up on the grey-market. This is achieved by tracing them back to their last known location in the supply chain.

Knowledge of when and where an item was last seen/did not show up also dramatically speeds up clarification and accountability processes.

These 3 building blocks allow the extraction of KPIs and models to:

  • Monitor shrinkage
  • Identify grey imports
  • Minimize counterfeits
  • Automate re-ordering via dwell times and throughput
  • Identify bottlenecks.

Looking to optimise your retail supply chain? The Detego platform is the end-to-end track and trace solution

Achieving complete supply chain transparency requires implementing an RFID system across your entire value chain, preserving detailed information about each RFID read event of each individual item (such as inbound verification, stocktake or sale). Thanks to that, knowing an item’s EPC (Electronic Product Code) number is enough to find out what, where and when happened to it. This capability is most useful when stores, distribution centres and factories are all integrated with one system – that system is Detego.

With efficient RFID processes from source-to-store, retailers not only gain new levels of accuracy and efficiency but achieve unprecedented transparency of the supply chain. Detego’s Global Track and Trace feature deliver the visibility, traceability and accountability to optimise retail supply chains for sustainable retail success.

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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

Webinar Recording: Best Practice RFID for Retail Supply Chains

 

Retail has evolved dramatically in recent years, driven by changing customer expectations, online disruption, and the ongoing digitisation of the industry. Whilst many stores are embracing technology to wow customers and deliver seamless experiences across multiple channels, behind the scenes supply chains are evolving too.

In this webinar we outline how Radio Frequency Identification (RFID) technology is strengthening supply chains and delivering the accuracy and transparency that modern retail demands. Covering the item-level journey from source to store, the presentation will explain how and why major retailers are choosing RFID to digitise and future-proof their supply chains.

This webinar covers:

  • The business case and benefits which RFID technology can bring to the retail supply chain
  • Key RFID processes and use cases in factories and distribution centres/warehouses
  • Best-practice approach and strategy for implementing RFID across the supply chain
  • Examples of successful customer implementations and learnings
  • Critical insights to successfully manage new supply chain challenges during COVID-19 pandemic

Summary of Reiss and Detego’s UK project

 

Luxury high-street brand, Reiss, has been operating in the UK for almost 50 years with 160 stores globally. Their reputation for quality and service is what sets them apart, and they recognised that in the modern environment, serving their customers to the highest possible standard requires strong digital foundations.

To achieve this, Reiss has initially implemented the Detego platform across its 50 UK stores. Digitising their view of stock as well as increasing their stock accuracy across all stores were priorities, as these would provide an important baseline for future projects as well as allowing them to continue to serve their customers with a high level of service.

The rollout was completed in 8 months and has since seen results of 99% stock accuracy in stores and a consequent 4% uplift in sales.

 

The Challenge:

Responding to shifting customer expectations, Reiss looked to begin a ‘digital transformation’ of their inventory to secure stock accuracy, efficiency and stock visibility for their growing omnichannel portfolio.

The Solution:

Reiss began RFID tagging individual products at source, giving every item a unique digital ID that is readable via radio waves from several feet away. They then implemented Detego’s cloud-hosted inventory management software across their store network to digitise store processes with fast and efficient RFID methods. This meant they could perform accurate, daily stocktakes of their stores, rather than doing a just a few each year.

The Result:

Reiss saw their stock accuracy increase to 99% in their stores with a 4% sales uplift as a direct result of this. Additionally, they now have a complete and accurate digital view of stock across their store network. Not only does this mean Reiss staff know exactly what is in their stores at all times, but it is a solid foundation for future expansion into the digital arena.

4% Increase in Sales

99% Stock accuracy

Reiss store

The Steps to RFID success

Best Practise Implementation

Detego worked alongside Reiss to understand their business goals and implement a phased approach to the use of RFID. An initial pilot project involving 5 stores allowed Reiss to understand the implications on process change whilst proving the business case to their stakeholders. Following that, an efficient rollout of the remaining UK stores was enabled by our professional services team and cloud-hosted solution. Reiss chose to focus on the fundamentals of stock accuracy and product availability for their customers first. This allows them to set the foundations for new services and feature additions following the success of this initial implementation.

Transforming stock takes

With the application live in stores, Reiss staff now perform stock takes daily, rather than a handful of times a year. This can be done due to the speed and ease of a Detego stocktake. Because RFID reads can be done without direct line of sight and at a distance of several feet, Reiss staff can do a cycle count of their entire stores in around 30 minutes. Naturally, daily stock takes will drive accuracy but the fact that the Detego stocktake removes human error and is displayed on a user-friendly mobile app means Reiss achieve near-perfect levels of inventory accuracy.

‘The use of the Detego app has really improved our daily processes. Having a stock take every day as opposed to only twice a year really streamlines the accuracy of our stock file and the replenishment process.’

Giorgio Leone-Mazza, Reiss Store Manager

Stock accuracy

As a result of implementing the Detego platform, Reiss now have on average 98% inventory accuracy in their stores. This has a huge impact on Reiss and their customers. Reiss stores’ backroom inventories are very lean and they replenish directly from their central DC. Having an accurate view of stock is crucial in such a system, as inaccuracies mean incorrect replenishment which in turn creates out-of-stocks and unsatisfied customers. With accuracy close to a 100%, Reiss can be confident that their merchandise is leveraged with total precision.

With very few inaccuracies, customers are rarely disappointed by items being unavailable and they can continue to serve their clientele with the same level of service that they’ve been renowned for almost 50 years.

Reiss’ merchandise itself is their second most valuable asset, behind only their customers, so it is important to leverage it as effectively as possible. Having an accurate view of stock is the only place to start this and ensures that they can prevent end-of-season markdowns as a result of ‘losing’ stock for a season due to inaccuracy.

‘We scan every day, giving us the accuracy of the exact stock we have in the store, in roughly 35 minutes’

Manisha Hassan, Reiss Store Manager

The road to Omnichannel

One of Reiss’ main long-term goals for their technology investments was to offer a top-class omnichannel experience, opening up more inventory for their customers to choose from and utilising their stores as miniature distribution centres. Having a highly accurate view of stock is a non-negotiable requirement to offering good omnichannel services, inaccurate stock means inaccurate omnichannel. With an accuracy of near 99%, Reiss will be able to deliver services like click and collect and ship-from-store with confidence.

Reiss’ merchandise itself is their second most valuable asset, behind only their customers, so it is important to leverage it as effectively as possible. Having an accurate view of stock is the only place to start this and ensures that they can prevent end-of-season markdowns as a result of ‘losing’ stock for a season due to inaccuracy.

‘The RFID project at Reiss has focussed on simplicity, driving accuracy very early in the cycle, using software as the base level.’

Martin Schofield, CEO of Retail 247

Reiss RFID with Detego

Did we spark your interest?

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.

Inventory Visibility

Inventory Visibility

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

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

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

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

Real-time Data Insights

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

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

Did we spark your interest?

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99% Stock accuracy

98.5% product availability

750+ stores

2000+ sales employees trained

An extraordinary four-month project sprint for 500 adidas stores in Russia has been successfully completed. The goal: Boost store KPIs such as inventory accuracy, article availability and consumer service to the highest levels. The means to achieve that: Extremely fast, error-free stock taking of 45 million articles per year through real-time in-store processes that are more efficient and intuitively managed, using decision-relevant analytics. The end-to-end integration was accomplished in just four months. The interdisciplinary project team consisted of business, IT, logistics and retail experts coming from five different countries – all working together across ten different time zones. The result: 99% inventory accuracy and the highest on-floor availability that adidas wanted for its stores. The winner: The adidas end customer.

The future? Athletic.

Customers drive retail strategies with their various and versatile demands. They want the ability to shop anytime, anywhere while expecting a consistent brand experience in the store, on the web and using mobile apps. Customers anticipate immediate access on an article’s availability across all channels – and fast delivery! Failure means losing a customer to a competitor. They’re only a click away. Meeting these expectations requires a digital transformation of the stores and efficient omni-channel retailing. But how to implement these strategies successfully? With an intelligent business base.

The implementation of an omni-channel strategy is a major undertaking. Regardless of whether your company is just at the starting point, in the middle of the project implementation, or already in a more advanced stage, if the foundation for omni-channel retailing is not well laid, the project is doomed to fail. This whitepaper provides 5-basics-checks for the fundamentals of efficient omni-channel retailing. It helps to build a solid foundation for a successful implementation of omni-channel retailing – regardless of the stage your company has already reached in the realisation of its omni-channel strategy. It is aimed to reach practitioners responsible for the omni-channel initiative and therefore those with clear expectations on the cost-benefit aspects of any omni-channel investment. It provides C-levels, Omni-channel-, eCommerce- and Marketing Executives with reflective and feasible recommendations for actions to take for more efficient omni-channel retailing. The Whitepaper focuses on the following omni-channel-services, expected by consumers: availability checks, click & collect, ship-from-store, return-to-store and instore-ordering.