One of my favorite sources for cutting edge industry news, Retail TouchPoints, recently released their annual survey, “Taking the Pulse of Store Operations”. Among the findings, retailers are becoming “smarter” about making investments in their store operations. As a result, the number of retail firms who report they will downsize their overall store operations budget this year dropped to 32.4%. That’s 14.5% fewer than 2012. Many retailers plan to increase their operations budgets in critical areas, including mobile technology, product merchandising and staff training.
The survey contains plenty of excellent data, but what really caught my attention was the section on omni-channel retailing. This information confirms the accelerated movement towards omni-channel as the new normal for retail operations. If we haven’t already reached that tipping point, we are certainly close.
As the survey points out, “the omni channel arena is all about options; and not the retailer’s options — the shoppers’ options.” As we noted in one of our earlier blogs, today’s consumers want speed, ease and rich product information…and plenty of choices. They expect to be able to shop anytime, anywhere and from any device, and find and receive exactly what they want.
Retailers are working vigorously to respond to customer expectations, delivering a seamless experience across all available channels. Based on the Retail TouchPoints survey, here’s a quick look at the options savvy retailers are offering now, or planning to implement soon.
CONSUMER OPTIONS OFFERING NOW PLANNING TO OFFER
Purchase online; pick-up at store 48% 12%
Purchase online; return at store 50% 7%
Buy in-store; return to another store 68% 4%
Buy via mobile, website or in-store; ship to home 46% 13%
Buy via mobile, website on in-store; pick up in store 41% 17%
With five different methods for ordering, delivering and returning merchandise—and more options to come—retailers must work harder than ever to track inventory with precision. No matter how many variations you offer customers, you still have to deliver the goods on time in the correct style, color and size. For seamless store operations in the omni-channel sector, Out-of-Stocks, misplaced merchandise, shipping errors, wrong SKUs, delays and other missteps are not an option.
I have been working with both RFID and retail for almost a decade, and as one of the earliest proponents of RFID, I am compelled to think that item-level RFID was “made” to address the myriad challenges of omni-channel retail. For starters, RFID enables complete visibility and control of merchandise wherever it moves: from the manufacturer’s floor, to the D.C., to your backroom, to the sales floor, to the warehouse, on the shelf, off the shelf and throughout shipping to its final destination, the customer. This is the level of visibility and accurate tracking required to provide a great shopping experience for customers who want to shop in one channel, order in another and pick-up or receive via a third.
With competition within the retail sector fiercer than ever, you simply cannot afford to disappoint customers who find what they are looking for online, order and arrange for store pick-up, then arrive at the store to discover that the item is Out-of-Stock. One research study reveals that roughly 20% of customers who ordered a product online or on the phone for in-store pickup actually left the store empty-handed because the item could not be found. Each time this happens, you’ve lost a sale, and that customer has walked away with a negative impression of your store and its operational efficiency.
The American Apparel & Footwear Association (AAFA) reports that at any one time, a typical retailer’s inventory is only about 65%-70% accurate. Such a high degree of inaccuracy is costly and wasteful under any circumstances, but even more so in today’s fast-paced retail environment where the customers wants it “now” across multiple channels.
With item-level RFID in place, your operations team and sales staff can keep tight control on inventory, ensuring the right items are where they should be for customer viewing, purchase, shipping or pick-up. In fact, RFID can even allow your customers to see your inventory counts online, confirming that what they want is in-stock before they initiate the purchase transaction.
Inventory management is only one piece of store operations, but it’s a large, critical piece. RFID can make it easier, more efficient and more cost effective, especially as the industry moves closer to omni-channel as new standard.
If you are engaged in omni-channel retail now, or planning to enter that arena in the future, we’d like to hear about your challenges, and your success stories. Use the comment area below, or email success@truecount.com.
Contact Truecount’s RFID experts for more information success@truecount.com, and download our complimentary White Paper, “The Perfect Sales Floor” from our site, www.truecount.com.