The retail marketplace has become increasingly competitive over the past decade.
With the steadily growing availability of online retailers, ongoing supply chain issues, and inflation, retailers face significant obstacles to making sales. Furthermore, the popularity of "buy online, pick up in store" (BOPIS), curbside pickup, and other new fulfillment models has shifted shoppers' expectations around convenience.
Gone are the days when shoppers headed to a store and hoped the item they needed was in stock. Now, more often than not, shoppers are heading to specific stores because they know the item they want is there—and, in many cases, they've already purchased it. So, what happens if the item isn't there when they arrive? Well, that's a lost sale and a disappointed customer.
The financial repercussions of inadequate inventory tracking alone illustrate the importance of prioritizing this aspect of a business in the current market. However, managing a growing technological ecosystem's complexity, performance, and resources can be challenging to retailers.
Luckily, investing in the right analytics tools and identifying the right partners can set retailers up for success. Below are four steps every retailer should take to help ensure inventory availability throughout the year.
Design a pilot that tests tagging integration
Tagging integration is a key component of inventory intelligence, but tagging can be time-consuming. Starting with a limited pilot program can help ensure the RFID tags work with existing inventory systems. To design an effective pilot program, retailers should:
- Consider the specific problem the intelligent inventory system will be solving. Is it shrink? Replenishment? Something else? Understanding the use case is the only way to demonstrate the program's efficacy and tailor the approach to fit the retailer's unique needs.
- Tag a diverse set of products that come in different shapes and sizes. Doing so will help demonstrate the accuracy of RFID tags and the item-level inventory program in place.
- Run the pilot for at least 30-90 days. Retailers can only evaluate the efficacy of a program when they have sufficient data. Running the pilot over an extended period provides a more detailed look at the effectiveness of the tagging.
Implement RFID across the enterprise
After a successful pilot, retailers can implement RFID from supply chain to storefront—and everywhere in between. Moving from pilot to full implementation comes with its own set of considerations, like:
- Will the program use source tagging recirculation or will associates tag items in-stores? Source tagging recirculation provides retailers the opportunity to return used tags to manufacturers to be cleaned, sorted, and reused. Doing so can reduce plastic waste and reduces labor costs while minimizing shrink.
- Are omnichannel platforms synced with the inventory intelligence data? Linking these systems will facilitate more effective online shopping and allow customers to check that items they need are in stock. If those systems are accurate, the positive impact on the customer experience can help improve customer loyalty and trust—especially during busy seasons.
- How might we need to change our approach to prepare for busy seasons? Leaders will need to monitor supply chain workflows to ensure retail locations get the right items in the right quantities to meet changing demands.
Train associates on new workflow processes and technologies
Once the system is implemented throughout the enterprise, retailers must invest in robust training programs so all employees—seasonal and year-round—know how to use these systems effectively. Holding all-hands trainings will help everyone understand how source tagging and inventory intelligence impact their work and the shopper experience. After all, associates and managers are retailers' best brand ambassadors, so it's essential they're set up for success.
Consider other uses for new systems
Retailers can use RFID technology to address other pain points in the enterprise. Existing tags and pedestals can be integrated into easy-to-navigate dashboards that can help inform everything from floor plans and ordering to displays, labor allocation, and more. Retailers can even combine the data taken in by multiple IoT-connected sensors—like tags, pedestals, and video—with other insights to bolster loss prevention programs. These data sets can analyze shrink patterns to inform operational changes that prevent incidents before they occur, rather than reacting to crime events already in progress.
Looking to the future
Retailers may have viewed the most recent operational shifts as temporary measures at the onset of the pandemic. However, these trends began before COVID-19 started making headlines—and they're here to stay. Shoppers have become used to frictionless shopping experiences, and they're unlikely to settle for anything less in years to come.
As such, retail decision-makers who want to compete can future-proof their businesses by investing in fully integrated item-level inventory solutions that meet their enterprises' unique needs, their customer’s expectations, and the demands of the current retail landscape.