Modern Retail

3 RETAIL FRICTION POINTS THAT ARE BEING ELIMINATED BY RFID

The age of digital disruption has caused a shift in consumer expectations and the retail landscape as a whole. Naturally, many retailers have looked towards implementing new retail technologies in an attempt to either adapt to or capitalise on these changes. When researching such technologies, the focus should be on transforming the customer’s experience.

The question needs to be asked; is this directly solving a major problem for retail customers? In other words: Is there a demand for it? Focusing on the comparatively mundane details first needs to be a priority, as attention on what drives customer experience at the most basic level can be the difference between success and failure in the age of digital disruption. 

One technology that consistently meets these demands is RFID (Radio Frequency identification). RFID is a growing force in retail, with 69% of retailers around the world citing a significant level of RFID adoption. The technology involves tagging individual items of merchandise, like a barcode but entirely unique to the individual item that can be ‘read’ and tracked with ease. One of the most common business cases for the technology is the inventory visibility and process efficiency that it delivers, but the difference that RFID can make to the customer is not to be overlooked. 

Out-of-stock situations 

Empty shelves are a simple problem and yet are still a painfully common occurrence in retail.  In a survey by Elastic Path, it was found that 55% of shoppers surveyed had experienced an issue with out of stock inventory. Is it then any wonder then that eCommerce is putting pressure on brick-and-mortar stores?

As obvious as it might sound, a product can only be bought if it’s on the shop-floor. If replenishment isn’t automated or falls victim to human error, stores can be temporarily faced with unnecessary out of stock situations that can damage both sales and reputation. This problem is often a subtle one, with stores and retailers having no way of observing the true level of item availability.

With a cloud-based RFID platform that utilises the Internet of Things, on-floor availability becomes much easier to manage, significantly reducing out-of-stock situations by up to 50%. The main way this is achieved is through fast and accurate stocktakes and automated replenishment processes. With RFID, store staff can now perform stock takes from an entire store (50,000 items) in just 25 minutes to a level of 99% accuracy.

This complete and accurate view of inventory combats out-of-stocks in two ways. Firstly, the visibility of stock allows store staff to easily monitor stock levels on both the shop floor and in the backroom. Whilst more advanced RFID systems, such as the Detego platform, can not only operate in real-time to provide replenishment alerts but can also use machine learning to suggest AI-optimised planograms per individual store.

Disconnect between online & offline

The increasing influence of online and ecommerce is arguably the biggest driver of digital disruption in retail. The convenience and choice that shopping online offers has resulted in highly demanding modern customers. Whilst most brick-and-mortar retailers have expanded into e-commerce to meet these consumer demands, there is still a noticeable disconnect between many retailer’s online and offline shopping channels. 

The key to a good ‘omnichannel’ shopping experience is not to necessarily be everywhere, but to be seamless and flexible at every step of the shopping journey. Non pure-play retailers that can do this will have a competitive advantage, not least because of the choice they offer customers, but with features like click-and-collect and ship-from-store, they can offer an unmatchable level of flexibility whilst opening up their entire inventory network to all channels. 

To be able to do this, retailers need a complete and real-time view of inventory across their store network in all channels. RFID provides this through digitising inventory (utilising the IoT) and tracing the movement of individual items in real-time. With this foundation, it is possible to build extensive and reliable omnichannel services, blending shopping channels and providing a flexible and convenient experience for customers. RFID is the backbone of strong omnichannel services such as this. In fact, 83% of RFID adopters offer three or more omnichannel fulfilment options compared to only 24% of non-adopters.

At its most basic level, this can include opening up stock transparency to customers so they can check availability of items online before coming into a store. The more advanced features include click-and-collect and ship-from-store, both of which provide a competitive edge against pure-play ecommerce, as customers get a more convenient and flexible shopping experience regardless of which ‘channels’ they shop through. 

Lack of customer service 

When discussing disruption and new technologies, its easy to forget about core principles and traditional strengths, but technology should be built with these in mind. For retail stores, that means customer service. This remains a key part of physical stores’ USP today, but with the demand for store associates’ time being severe, these traditional strengths can sometimes be left behind.

In studies by Elastic path, it was found that 42% of shoppers surveyed said they’d had an issue with long wait times for customer service, suggesting that something new is required for the old strengths of retail to keep up in the modern environment.

RFID platforms meet this demand in two different ways. First and foremost, is simply the fact that RFID operations are much leaner and less labour intensive. For example, it cuts cycle count times by up to 96%. This has the simple yet effective result of drastically decreasing the amount of time retail staff have to spend on manual processes like replenishment, therefore freeing up a significant amount of staff time to be spent elsewhere with customers.

The other significant way RFID can assist customer service are the platforms and features that can be built around the technology. Mobile chatbots can assist customers with queries about item availability and available sizes, thanks to the real-time item transparency produced by RFID. In the fashion industry, Smart-Mirrors can do this whilst also reducing the friction points associated with changing rooms, as they can provide information from within the fitting room and can also be fitted with features to call store assistants to bring any items required to the fitting room. 

Detego develops and delivers a cloud-hosted software platform for retailers, providing real-time inventory visibility, superior process efficiency, omnichannel services and AI powered analytics. Purpose-built with flexibility and user experience in mind, retailers can utilise Detego’s software and industry expertise to unlock the power of RFID, from the factory through to the store.’

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