Stack of blue blouses

Unique identification is the key to inventory visibility

Why should retailers implement RFID?

February 26 2021

Omnichannel services require real-time stock visibility. At once, it is necessary that stock information is accurate and consistent. Here, RFID enables a high stock accuracy. Once products are equipped with RFID-labels, ideally applied during the production process (so-called source tagging), it is possible to seamlessly track and trace all movements through the entire supply network.
Using RFID technology in the supply chain enables error-free, real-time efficiency, and visibility throughout the operations. RFID read events are then synchronized with an EPCIS repository, which – as a consequence – acts as a (real-time) stock visibility platform.

Simplified overview of an omnichannel retail supply chain
Simplified overview of an omnichannel retail supply chain

The Single Point of Truth (SPoT) – Knowing the flow, the location and the status of merchandise

A stock visibility platform provides a standardized single point of integration to business and consumer applications for complete supply chain and inventory visibility in real-time. It monitors the inventory transactions and movements from all related sources in real-time and can provide (accurate) stock information to relevant backend systems, such as order management. This is of utmost importance with the increasing complexity of omnichannel retail supply chains.

RFID technology makes it possible to automate stock management – resulting in optimal merchandise availability

Stock accuracy

Major brands are adopting RFID to make sure inventory is accurate. This allows for accurate replenishment as the distribution centre knows exactly which products are needed in which stores. Online order fulfilment runs smoother as shoppers can actually see which items and sizes are in stock before placing the order.

Merchandise availability

RFID technology makes it possible to automate stock management – resulting in optimal merchandise availability.

In-store refill: With RFID, it is possible to differentiate stock on the sales floor from stock in the back room. Based on the RFID count per sub-location, retailers can efficiently and accurately start refilling.

To-store replenishment: RFID increases stock accuracy. As a consequence, (auto-) replenishment tools can work reliably and, thus, avoid further out-of-stock situations.

Added value

Sustainability

Since retailers typically know that their stock accuracy is low, they often hold high safety stocks in their stores. Those safety stocks are utilized to ensure merchandise availability, even if the stock information might be wrong.

However, safety stocks extend the actual demand, and thus those products must be reduced or even returned to outlets at the end of the season to clear the space. Here, RFID shall help to avoid such kind of waste. If stock information is accurate, and a retailer knows where the products are, they do not need such safety stocks: they are able to sell more with less stock.