Retailers are about to enter the busiest, and most defining sales months of the year. Historically, November and December can account for as much as 40 percent of annual sales. For example, Macy’s saw 28 percent of its total sales in the final tw
o months of 2010.
On the eve of “Black Friday” 2011, an uncertain economy still has consumers worried about spending, while higher fuel costs, the growth of e-commerce and a worldwide increase in retail theft and fraud threaten to erode profits for many stores. At this critical moment, before the Black Friday frenzy kicks off, savvy retailers are counting the hundreds of reasons to be thankful for RFID. Here are a few:
Rapid Cycle Counts: RFID counts hundreds of items per second with near perfect accuracy. This means you can execute cycle counts as often as needed during the holiday crunch. RFID is so fast, it only takes minutes to count and correct inventory before, after or during extended holiday store hours.
Unprecedented Visibility: With RFID, you are able to see where each item is at any moment, in “real time.” Such 360-degree visibility into inventory and what’s happening
to it, lets you take immediate action to correct errors, return misplaced items to their proper location or reorder fast-selling merchandise as needed.
End to Distortion: Even under the best circumstances, inaccuracy rates for inventory can be as high as 65 percent. Periods of intense activity, such as the holidays, are big contributors to distortion. There’s too much to do; an overload of things to manage, and an increase in customers to service. RFID not only keeps the distortion OUT by delivering near perfect data about inventory and inventory-related processes (99+% accuracy), the technology also removes a huge number of operational inefficiencies, which are compounded during the holiday “rush”.
Increased Agility: Throngs of holiday shoppers searching through merchandise can leave your sales floor in disarray with your staff struggling to reconcile inventory and restock. RFID’s rapid, accurate counting and tracking enables quick recovery and replenishment for the next cycles of holiday shopping.
More “Perfect” Sales Floor: Mobile shopping and the increase in e-commerce (up 14 percent since 2010) have raised consumer expectations for finding what they want, when they want it. For omni-channel retailers, RFID makes it easier to keep all inventories in balance, with your e-store and your bricks and mortar stores properly stocked. RFID Lets you “see” in granular detail what’s missing from the shelf or sales floor and what’s waiting to be moved from the back room to the shelf. The exact size and color is always ready for purchase when the customer comes in to buy.
Increased Loss Intelligence: The superior capabilities of Item-level RFID for counting, tracking and capturing data at the item level gives you high quality intelligence about loss. This includes the WHAT, WHEN and WHERE data of a lost, stolen or misplaced item, leading to the WHO.
Reduced Shrink: Retail statistics show that 90 percent of retail shrink is attributable to processing errors and internal theft. During November and December, the accelerated pace of ordering, stocking and documentation multiplies the opportunities for errors and employee theft to occur. RFID alerts you to processing errors and theft as they happen, for fast correction.
End to Fraud: Large retailers like Wal-Mart can have thousands of stores to stock with millions of SKU’s to manage and account for. A store like Macy’s must keep track of 300,000 pairs of shoes. The opportunities for retail fraud, from organized theft to counterfeit product are broad. RFID helps control fraud and end counterfeiting with SKU data that is impossible for criminals to tamper with or replicate. With RFID, merchandise is secure. Those Prada handbags or Coach belts your customer wants to buy will always be authentic, not rip-offs, and the shipments will be accurate, with no items missing in action.
Less Stress for Sales Staff: RFID-enabled stores report that RFID reduces labor for all inventory-related processes by 90 percent, leaving sales personnel more time to focus on customer service. At the same time, the sales staff can feel more relaxed and confident when telling customers an item in the color and size requested is, in fact, “in stock” —and
knowing exactly where that item is located. I’ve seen first hand how just knowing inventory data is accurate can remove sales floor stress.
Sales Lift: Having the right item in the right place can increase sales by 2 to 7 percent—giving a significant boost to the end-of-year bottom line. For most retailers, a 3 percent increase makes for positive ROI within the first year for retailers rolling out RFID.
Smoother, Easier Receiving Processes for Replenishment: With RFID, there are fewer processing delays, so merchandise moves from point to point more rapidly, getting to the sales floor in time to satisfy customer demand.
Happier Customers: They found what they wanted to buy.
A key advantage for retailers using RFID is ability to “load up” for a major sales event such as Black Friday or other big shopping weekend utilizing RFID’s item-level receive and speed. I recall when working with American Apparel that many retail stores “overload” in anticipation of holiday sales. The real-time, accurate reporting enabled by RFID allows you to be so efficient that there’s no longer a need to overload; an activity that can result in ordering items that fail to sell, and adding extra work and chaos to the weeks prior to the holiday.
If you want to know more about RFID, call for a complimentary consultation 1-800-403-7118 x1 or email success@truecount.com.
What are your biggest concerns as the holiday shopping season kicks-off? What problems has RFID solved for you, or do you expect RFID to solve?