Customers today do not only shop by visiting online or physical stores, but everywhere. They want to make a purchase with the phone on a bus, receive it an hour later in your store, and take it back to another place in case it does not fit right. That is what omnichannel retail is really like, and it all goes back to a single crucial question: Do you really carry the thing that they just bought?
The painful answer is that there are too many retailers. This guide will address the most pressing questions regarding the reasons why the traditional inventory processes are being unsuccessful and how RFID (Radio Frequency Identification) will give real-time accuracy to win the omnichannel age.
What exactly is omnichannel retail?
Omnichannel retailing is the customer-focused strategy that offers a coherent and smooth buying experience across all channels and touchpoints. It is the silo busting between your physical and digital stores.
Important services in the omnichannel that customers currently expect are:
- BOPIS (Buy Online, Pick Up In-Store): This is the possibility of ordering a product online and picking it up in a real shop.
- Ship-from-Store: Delivery of ordered products online directly through the merchandise of that very nearby retail outlet, rather than through a central warehouse, in order to accelerate the delivery.
- Endless Aisle: An ability given to the customers in a brick-and-mortar store to order goods that are out of stock and have them delivered home.
- BORIS (Buy Online, Return In-Store): It offers convenience in making returns of an online product, and the item can be returned at any store.
It is not that simple to provide these services, but rather to perform them right, all the time.
Why is my current barcode-based inventory system failing to support these services?
The traditional method of inventory management is doomed to failure, as it has one major value: it is inaccurate. The counts are done manually, and barcode scans are made once a week, which makes the data pretty outdated and not always correct. Leaders, such as Zebra Technologies, cite research results stating that average inventory accuracy in a retailer lies in the 65-75% range.
The falseness on which this is based entails two great troubles:
- Ghost Inventory: You will have an inventory system that reports that a product is in stock when in reality it is nowhere to be found on the shelf or in the stockroom. When an online customer places the order and intends to pick it up in the store, the order is doomed to be cancelled, leading to a nightmare customer experience.
- Hidden Inventory: The product is physically present in-store, yet it is unknown to the system. This implies that it cannot be seen by online shoppers, therefore making them lose a sale.
To be able to meet omnichannel orders, you need to be able to get a real-time, accurate view of your stock; otherwise, you are gambling and losing a lot.
How does RFID technology create a single, accurate view of my inventory?
RFID offers the much-needed single source of truth that omnichannel retail requires. It operates by affixing a tiny tag that has an exclusive digital identity to each product. Readers generated by RFID can then scan hundreds of them per second at a distance; there is no direct line of sight requirement.
Such ability makes inventory management a quicker activity, as opposed to being manual and slow. A blanket store inventory can be accomplished in less than an hour with 99%+ accuracy, where it used to take days.
What are the tangible benefits of using RFID for my omnichannel strategy?
RFID is not merely an issue of technology upgrading; they are strategic business decisions that bear measurable business results.
- Effective Order Fulfillment: You can reassure customers with 99%+ accuracy that the product that they ordered online is ready and waiting to be picked up. This lowers the order cancellation rate significantly, and it creates trust in the customers.
- Greater Sales and Revenue: Displaying all your inventory items so they are visible and can be sold anywhere is key to preventing lost sales. According to authorities such as Avery Dennison, studies and case studies over the years have been consistent in showing an increase of up to 20% in sales when the retailer engages the RFID.
- Increased Customer Loyalty: A greater omnichannel experience makes a big difference among buyers. Customers tend to become repeat, loyal shoppers when they are able to shop at the times they want, in the way they prefer, and where they want to.
- Enhanced Process Efficiency: This will provide your team with enhanced process efficiency since they will waste much less time on the search for lost objects or managing inventory shortages. This also allows them to concentrate on what really matters, i.e., serving customers.
Concisely, RFID converts your inventory into your most potent asset in competing in contemporary retail.
FAQs
We already use barcodes at checkout. Isn’t that enough for inventory?
Although barcodes are efficient in use in the context of point-of-sale operations, it is inefficient in application in the context of inventory management. Barcodes need a clear path of visibility and have to be read individually. This renders a frequent and correct count of stocks inadvisable. RFID enables reading of hundreds of items per second at a distance, offering the speed and accuracy necessary to have a reliable, real-time inventory picture needed to succeed with an omnichannel environment.
What is the typical Return on Investment (ROI) for an RFID implementation in retail?
The ROI of RFID is convincing and also quicker as will be expected. It is motivated by a combination of interests, namely, more sales due to better stocking levels (no more walkouts), lower labour costs due to automated inventory counts, and less loss to shrinkage. Most of the retailers have full repayment of their investment in 6- 18 months.
Do we have to tag 100% of our products to get started?
You don’t have to do it all at once. Another useful and practicable approach is to launch a pilot program. Going after a particular high-value or high-volume product group with which you can demonstrate the business case is a good start. This enables you to quantify the short-term upside in inventory accuracy and sales lift, and will serve as a good basis to roll out to other stores in the whole chain.