News networking Tyco Retail Solutions, a world leader in security solutions and performance to the retail, has partnered with several groups in the industry with the purpose of analyzing the value of RFID technology to ensure inventory accuracy and to ensure the efficiency of the store. News networking
These investigations confirm the use of RFID technology as the best way to combat inventory deviation, increase its accuracy and allow greater visibility. With this, shops respond to the new challenges of unified trade.
Assessing the problem
IHL Group conducted a study focusing on the problem of inventory diversion within the retail sector. The combination of out-of-stocks and excess inventory is a problem that reaches $1.1 billion in the industry (1). Because of this problem, retailers cannot rely entirely on the availability of their stock, which leads to a reserved attitude when exposing the items to online sale and offering the option “Buy online and collect in store” (BOPIS). This can jeopardize customer experience, resulting in an average loss of 8.7% of total sales
Identify the solution
The key to achieving efficiency is to have full and real-time visibility of all store items, using RFID technology. Adopting this technology and conducting regular counting processes helps retailers prevent inventory deviation, increasing accuracy to 99% and keeping it at 95-99%(4). With greater inventory accuracy, the number of buyers who find the desired product increases and sales can grow between 5% and 25%.
Brent Brown, vice president and general director of Inventory Intelligence and the Internet of Things (IoT) at Tyco Retail Solutions comments: “since current consumers look for products where and when they want, retailers must prioritize the implementation of a technology that supports a unified trade strategy. RFID technology-based solutions enable retailers to accurately deliver real-time stock items and meet customer expectations as sales increase.”
In addition, getting all the products in the store on sale resulted in an increase in sales, pick-up units and order efficiency. For Macy’s this is very important as 20% of its inventory was composed of items of which only the last unit remains. They also managed to save on transport costs, offers and inventory level. Platt’s study details the extensive research that was carried out in 4 different stores of the company. In each of the cases, the shops pilot with RFID technology significantly outperformed the stores without a program of RFID implanted