As 2021 starts winding down (is it really September already?) we’re setting our sights on next year, thinking about the challenges our customers will face and what opportunities are in store for them. So if you’re reading this post to learn what it is you must be aware of in 2022, here it is: omnichannel retailing.
During the COVID-19 pandemic, consumers were forced to explore their buying options—and they liked what they found: buying products in-store, via mobile, and online; deliveries made to their homes, at curbside, and for in-store pickup. Retailers responded by introducing a number of convenient options, and today ecommerce sales and delivery has skyrocketed.
Our nation’s biggest retailers experienced remarkable ecommerce growth following the declaration of a global pandemic. Here are some impressive stats reported by Target early this year:
- Ecommerce sales grew 145% in its fiscal year ending January 30
- Online orders picked up at stores jumped 70% from 2019
- 95% of all sales (in stores and online) were fulfilled from the chain’s brick-and-mortar stores
- Curbside pickup sales grew 600% year over year; same-day delivery grew 300%
But the other side of the coin, so to speak, is that all these great new options available to consumers make fulfillment a real challenge for retailers. The pandemic accelerated the need for them to perfect their channel strategies and roll-out supply chain infrastructure and process changes to answer the growing consumer demand for flexibility.
According to Nielsen, “...retailers that view the retail landscape through an omnichannel lens are succeeding where others aren’t.” Walmart and Target, for example, grew their online customer bases over the past years by at least 90% more than Amazon did. Retailers that can’t fulfill consumers’ expectations will fall behind.
How RFID Is Used To Keep Up With Consumers
Omnichannel inventory management isn’t easy because it requires visibility into something that’s very fluid and complex, with far more variables than retailers operating only brick-and-mortar stores. Fortunately, radio frequency identification (RFID) provides a complete, integrated, and real-time picture of inventory throughout the supply chain—right through to the final consumer purchase.
A complete picture isn’t the only benefit: that picture is also far more accurate than other methods. Statistics vary, but according to Auburn University RFID Lab, the average retail inventory accuracy rate is around 65%; with RFID, that skyrockets to 99.9% in some cases.
Here are some of the operational benefits enabled by gains in accuracy:
- When orders get placed—whether online, in-store, or via mobile device—inventory gets updated in real-time, giving everyone in the organization “one version of the truth,” and one that’s accurate
- With accurate inventory levels, stockouts are minimized and there are fewer split shipments (orders fulfilled from multiple locations). Sales associates can be prepared to offer substitutes because they’ll know which are in stock and where they’re located
- Customers can return products they bought online at a brick-and-mortar location. An RFID scan tells your online fulfillment center which product was returned, and refunds and replacements can be issued more quickly. Issues with the stock inventory are addressed immediately, rather than having to wait for the product to return to its original point of purchase
- Data captured during the sales transaction can be sent to all relevant groups in the company. Product buyers can see which materials will need to be replenished; Marketing can see which products are selling and which aren’t; Production can see what inventory is available for future orders and what new goods they need to produce
- Accurate, real-time inventory data tells customers which products are currently available for purchase. This eliminates situations in which the consumers go online and see that a product is available, but when arriving in the store they find that information was wrong
- RFID makes organizations very nimble, with data used to quickly reroute and track products to ensure that they’re delivered on time
RFID Requires Expertise To Deploy
It’s a whole new world out there, and to thrive—or, really, to survive—organizations need to adopt new ways of thinking, new processes, and new technologies. As a warehouse inventory management tool, RFID will be critical to retailers’ strategies as they adapt to today’s consumers and pursue omnichannel opportunities—those already here, and others that may be on the horizon.
The right first step in taking advantage of this technology today—so you won’t be left behind tomorrow—is to work with a team that focuses first on learning about your processes, your people, and your goals...and only then helps identify the technologies needed to get you there. Reach out to our team to learn more about the RFID solutions available and the ways this technology could optimize your supply chain.
