Enabling Next Generation Retail by Making Every Merchandise Smart
The retail industry is going through transformative changes. A growing number of retailers are taking big steps driven by the need to provide a differentiated customer experience, full Omni-channel integration, and improved margins. Many of them rely on new enabling technologies as mobile, cloud-based services, wireless in-store technologies, and RFID.
RFID is a key enabling technology as it can provide item-level visibility for almost any merchandise item. Visibility is the key foundation for new processes and applications being introduced in retail to optimize overall performance and enhance the shopper experience, such as factory to shelf asset tracking and inventory management, store optimization, self-checkout, loss prevention, returns management, smart mirrors and dressing rooms, location-based services, mobile shopping and promotions, and others.
Inventory Accuracy for Revenue Protection and Omni-channel Readiness
A barcoded stock file's accuracy ranges typically between 60% and 70% depending on the cycle of rectification. With RFID there is a real time 98% plus accuracy. A high degree of accuracy is important because it minimizes revenue loss due to out of stock situations and enables Omni-channel scenarios where customers could check item availability online prior to traveling to a store.
According to the Centre for Retail Research global financial losses due to retail shrinkage sum up to an average of 1.5 percent of sales representing a total value of more than 100 billion US$ annually. The three key causes ordered by magnitude are shoplifting, followed by employee theft and internal errors including mispricing, invoicing errors and administrative failure. RFID-based item-level tracking from factory to the store cashier can help to identify, monitor, and reduced shrinkage significantly.
Focusing on Customer Insights and Experience
Since the strong growth of online stores is driving more competitive shopping trends, the 'Know Your Individual Customer' is becoming more important to retailers in order to ensure customer satisfaction and loyalty. While the online world can analyze clicks and search entries very well a retail store has enormous potential to get insights into real world shopper behavior by leveraging RFID for in-store merchandise visibility as well as creating a superior customer experience through RFID assisted virtual mannequins or fitting rooms.