Comment: RFID enabling omnichannel processes

Research has shown that about 10.4 billion RFID tags are expected to be sold in 2016 globally – in apparel tagging alone, they’re expected to reach 4.6 billion. In the UK, a recent survey we conducted with the top 20 UK retailers, showed that more than 25% of them – including Marks and Spencer, John Lewis, Tesco F&F, ASDA George – are already using RFID, 20% are currently trailing and 15% are investigating, due to pilot the technology in the next few months.

The often cited reason – and indeed the primary business case driver – for adopting RFID is to get better inventory accuracy. Retailers and brands are recognising a need to change how they manage their inventory data. To get access to accurate data in real time, there needs to be a shift in mind set: retailers need to stop thinking about SKUs and start thinking about items. With the confidence in their inventory data, retailers can begin to become truly omnichannel.

But in this article I’d like to move the conversation on a little, and look at some great case examples of what can be done when a retailer has total confidence in their stock information that RFID delivers.

1. Pick to the last item

The first example is one from the US, Macy’s is a well-known user and advocate of RFID technology, having deployed it across all of its 350 stores. Item level identification is a key programme in its long term omnichannel strategy.

With confidence in the accuracy of their inventory Macy’s now pick to the very last item – opening up an additional 15% of their inventory for sale. Which is helping to ensure sales are made at the maximum value instead of being left to be sold at a reduced rate on a last item rail or during a sale period.

2. Fulfil from store

The next case is Moods, a Norwegian brand with 14 stores – a relatively large player in a small market. They piloted RFID back in 2013 and today have more than 90% of their products tagged.

In 2014 Moods launched an online store – which is now their biggest sales channel. With orders being dispatched from their main distribution centre, they found as the season progressed that orders would be displayed as out of stock online when in fact they would have plenty of stock in stores.

With greater control of their inventory and better quality data about what stock they have and where it is, Moods have been able to offer their online customers stock from their stores – with each store now acting as a mini-distribution centre.

3. Buy online and pick up in store

My third example is American Apparel, who like Moods of Norway, are enabling shoppers to purchase products from their store inventories online. On many basic items they now offer a 60 minute local fulfilment service from store – in the US.

But what I want to focus on here is the different mechanism of a click & collect order – the buy online and pick up instore, model. An item purchased from the American Apparel website, is then allocated from the store’s stock and is available to be picked up from the store of the customer’s choice. By not using an expensive shipping method from a distribution centre, they are reducing costs and allowing customers to get their product sooner. And they’re improving their service – as customers can try it before they take away or return the item, hassle free.

4. Enhance the in-store experience

The final example is another US retailer, Lucky Brand. They’re using RFID to improve the store experience with some familiar digital tactics, integrated using a wide range of in-store tablets, smart mirrors and information kiosks.

The digital tech they’ve brought in-store can easily identify an item of clothing using RFID tags. Lucky Brand’s customers can then find out more information about their product, find other variations, order different sizes directly to their fitting rooms, view related products to complete their look, share the item on social media platforms, access product reviews and order products online or from other stores.

Many of these are tried and tested ways of increasing conversion online, and when implemented in store have led to similar results as many digital marketers have already seen on their websites – with sales conversion being boosted by 40% to 60%.

Key takeaway

To fulfil the three customer wants that are at the heart of retail today – what they want, where they want to shop and when they want it – retailers and brands need to change how they manage their inventory data and have much more certainty about what stock they have and where it is.  RFID is the technology that can enable them to do this effectively and efficiently – and with the certainty and confidence in their inventory data, retailers and brands can begin to become truly omnichannel.

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