June 29 2021
Omnichannel is the holy grail within the retail space. Brick & mortar retailers are combining e-commerce efforts with their assets in the offline world. We see online retailers opening both stores, and urban fulfillment centers to offer the best customer experience and service possible. Omnichannel concepts like ‘Ship-from-Store’ and ‘Buy-Online-Pickup-In-Store’ (BOPIS) are becoming common ground and are adopted by some of the largest retailers out there. However, inventory accuracy remains a challenge that retailers need to overcome in order to optimize those omnichannel concepts. In this white paper we will connect those dots, explain how inventory accuracy easily enables omnichannel and why RFID is key to that success.
There are a variety of different motivations for retailers to fulfill their online orders from the store. the most common are:
- Expanding the range of available merchandise by virtually unifying the inventory of all physical stores.
- Reducing shipping times by fulfilling from a store location close to the customer instead of a centralized distribution center, often further away.
- Optimizing shipping by combining all items in a multi-item order from one location with all available items
But regardless of your motivation to move to ship-from-store an accurate stock information is key. When introducing ship-from-store with a low stock accuracy this either leads to a lot of cancelled orders or the need for a safety stock. Cancelling orders or bouncing them around from store to store will lead to an unhappy customer with the order being delayed or not delivered at all. Operating with a safety stock will exclude a range of the available products, which is combatting why you introduced ship-from-store in the first place.
As written in the report ‘20/20 In 2020 — Inventory Accuracy Takes Center Stage’ by JP Kamel, M Kay and K Munroe, customers are interested in BOPIS. According to this report, many retailers are reluctant to add BOPIS until they have improved their inventory accuracy.
Regardless of your motivation to move to ship-from-store or BOPIS, accurate inventory information is critical. Introducing these omnichannel concepts while having a low inventory accuracy will lead to a lot of cancelled orders or the need for an increased safety stock. Cancelling orders or bouncing them around from DC to store will lead to an unhappy customer with the order being delayed or not fulfilled at all. Operating with a safety stock will exclude a range of the available merchandise and will result in missed sales, which is combatting why you introduced omnichannel in the first place.
RFID to increase Inventory Accuracy
Many retailers have implemented RFID to increase their inventory accuracy. Retailers like Lululemon, Nike, Outdoor Voices, River Island, Macy’s and Adidas are examples of this (source RFIDJournal.com). RFID technology makes it possible to automate your in-store inventory management by frequently scanning inventory, resulting in optimal merchandise availability for your customers and an in-store inventory accuracy of over 98% and thereby creating the foundation for omnichannel initiatives like Ship-from-Store and BOPIS.