Investments in RFID inventory tracking enables retailers to offer a flexible e-commerce fulfillment model and allows them to proactively manage inventory.
And with consumers resetting the expectations of fulfillment to fast and convenient, the COVID-19 pandemic marked a dramatic acceleration of the importance of supply chain visibility. Because of this, businesses cannot make fulfillment promises to their customers without an accurate view of their inventory. In the meantime, consumers are also becoming increasingly aware of the far-reaching implications of how they shop, consume and dispose everyday items.
In response to these shifts in consumer behavior, retailers and brands now need to break down their inventory silos and create a single view of stock across their entire supply chain. The best way to do this is by tracking every unique item's movement throughout the supply chain and collecting data in a cloud-based inventory repository. Whether it's in-store, a distribution center or through loss prevention efforts. This enables businesses to keep track of every single item using RFID technology, from the moment it leaves the production factory to the exact moment the item is shipped, sold or returned.
Through the breakdown of inventory silos, businesses can create a single view of stock across their entire supply chain, which allows items to move between stores, distribution centers and e-commerce without losing sight of a single product. This enables perfectly matched demand and supply anywhere and at any time.
RFID in action
Knowing what is in stock and where items are located at all times throughout the supply chain has become essential. This is the primary reason why major retailer G-Star RAW signed on to Nedap's new iD Cloud platform; to achieve full inventory visibility in support of their omnichannel strategy.
The iD Cloud platform is an integrated suite of SaaS solutions, purposefully built for RFID technology and gathers all EPC inventory data into one place to create perfect inventory visibility. With this in mind, G-Star RAW began using the platform to close the gap between online and in-store shopping. Stores now have a crucial role in the omnichannel shopping journey, with e-commerce orders being fulfilled via ship-from-store and BOPIS fulfillment options.
Similarly, contemporary apparel brand Superdry started investigating RFID a few years ago with the end goal of increasing inventory accuracy. This ultimately has led to an omnichannel strategy that aligned online and physical store sales. Superdry uses Nedap's iD Cloud platform throughout its network of nearly 500 stores and improved inventory accuracy from 72% pre-RFID to 100% accuracy on outbound stock and 99.5% accuracy on in-store stock with RFID technology.
RFID is helping drive sustainability in retail
The demand for sustainability from consumers is present throughout the supply chain. They want to know that the products they are purchasing are not having a negative impact on the environment before they reach their homes.
According to Tendam, one of Europe's leading omnichannel fashion retailers, known from brands such as Women'secret, Springfield, and Cortefiel, RFID is the key enabler towards a fully transparent supply chain, allowing for full item traceability from source to consumer. Tendam is implementing Nedap's iD Cloud platform in all 1,222 stores.
"By using RFID technology, we are taking a major step in our digitization strategy. Knowing exactly which items are in stock and where these are located in real-time enables us to always choose the most efficient fulfillment method. For example, if a customer lives just a few minutes away from the store, we think it is a waste to have a parcel sent from a distribution center. To us, it makes more sense to have this shipped from the nearest store or to have this picked up at a moment that suits the customer, as this is more efficient and more sustainable", said Manel Jimenez, Chief Operating Officer at Tendam.
Importance of item visibility due to COVID-19
Dutch fashion brand Scotch and Soda has also faced a dramatic shift in shopper behavior as a reaction to the pandemic. With stores in the world's biggest cities and shipping to over 70 countries, being informed of the dynamics of countries going in and out of lockdowns made it even more important for Scotch and Soda to optimize the view on stock levels within their supply chain. This way, the balance of stock in-store and distribution centers can be adjusted to the local situation.
"If you promise to have something, you have to keep up your promise, and that availability is provided by technology," said Rik Kok, Scotch and Soda's Global Director of Procurement and Real estate.
Inventory visibility and accuracy allows retailers to lessen their total stock holding while still selling more, which works alongside allocating products to stores which need them and lowering safety thresholds. Lowering safety thresholds increases digital merchandise availability and gives the product more chances to sell.
With the past 18 months opening the eyes of the industry to challenges and expectations that can occur overnight, technology has now progressed at a faster pace. While the industry-wide challenge of inventory excess is no secret, few know the best course of action to solve it as there are several reasons the excess can occur. Some of the key contributing factors include lack of visibility into what is present in stores, wanting to have the right product readily available to customers and insufficient retail store processes. Luckily, RFID can and does help retailers achieve this.