2024 Edition

Did you have fun with your annual inventory count?

January 5 2024

As the new year begins, many retailers are emerging from a recent inventory audit, questioning whether manual stock counting still makes sense. Indeed, the annual stock audit is a mandatory ritual. Typically, retailers may audit their inventory once or twice a year. However, starting on the very first day after the audit, the accuracy of the stock file declines up to the next audit date. In response to these tedious and error-prone challenges, a growing number of retailers are turning to RFID technology. The time is right to automate processes and free up valuable time for customer service. 

By tagging individual items with RFID labels, retailers can track the movement of each product in real-time throughout their supply chain and stores. When RFID is adopted by retailers, they gain real-time insights into their stock positions and can increase inventory accuracy in stores to 98%; this enables brands to lower their target stock thresholds because they can trust what is listed in stores and, therefore, stock those sites in a more agile way. 

It's a numbers game: cutting unproductive costs 

Increasing costs have become a major problem in recent months, especially in times of volatile or even declining sales. At the same time, an aging workforce, demand for higher productivity, and the need to attract younger people are causing company leaders to seek various solutions, including investing in technology, more automation, and smart tools to support and attract a new generation of workers.    

It is essential to support store staff in their daily work and make their lives easier. While retail personnel must focus on the customer experience, technology can help them by taking over specific administrative tasks. RFID significantly reduces non-productive operations, especially for counting or searching for items in the store. In addition, store assistants can help customers using smart mobile devices and real-time data. For example, suppose you have accurate stock information from RFID counts separated into front-store and back-room. In that case, you can check if the desired item is just a few steps away.   

Out of Sight, Out of Stock: Breaking down the silos 

In the fast world of retail, sometimes it's hard to keep track of where products are: With thousands of different products in different options offered across multiple channels, many retailers have historically operated in silos. The ongoing increase in complexity and rapidly changing market conditions continue to make it challenging to plan ahead and, at the same time, operate with high flexibility. However, to ensure the availability of products on all channels, it is necessary to break down the silos and create a holistic view on stocks. Inventory visibility is important so that products can be allocated in a timely manner where they will generate sales without the risk of markdowns or leftovers.  

RFID provides us with valuable insights into shipment expectations, origins, and distribution channels, supporting our commitment to an exceptional brand experience while also operating more efficiently and sustainably. 

RFID provides us with valuable insights into shipment expectations, origins, and distribution channels, supporting our commitment to an exceptional brand experience while also operating more efficiently and sustainably. 

Craig Foster, Head of Technology at On Running

Fighting excess stock for a greener world 

Is it (still) right to purchase 150 t-shirts if you sell 100 of them just to be sure you have enough on hand? Wouldn't it be perfect to produce or procure only the amount that is actually sold? First and foremost, better inventory visibility empowers retailers to be more effective and efficient. The goal is to generate more sales with the existing stock or even with less products.  

In a world increasingly conscious of its environmental impact, businesses are under mounting pressure to adopt sustainable practices. For retailers, this often means taking a closer look at their inventory management processes. The improved accuracy that item-level RFID brings allows retailers to effectively manage their on-hand inventory and supply chains; significantly reducing the need for safety stocks. 

When retailers have precise data at their disposal, they can make informed decisions to pivot away from slow-moving products and allocate products to the place where they can be actually sold. Reducing excess inventory is not only good for retailers' profit margins; it's also a significant step towards sustainability. By decreasing overstock, retailers minimize the use of material resources and cut down on transport emissions. Additionally, they reduce the amount of unsold goods that ultimately end up in landfills, contributing to a greener planet. Retailers can simultaneously boost their environmental efforts and profitability by reducing excess inventory, optimizing supply chains, and making more informed decisions. 

RFID insights: Unmasking hidden losses 

A growing problem with poor inventory visibility is the increase in lost products. Losses can manifest at various stages of the supply chain journey, silently eroding profits and undermining the brand's integrity. To effectively safeguard inventory and, by extension, customers' satisfaction, it's crucial to pinpoint where and how these losses occur. Ultimately, every lost product represents more than just a financial setback. It's a potential source of customer dissatisfaction and disruption to your supply chain. 

This is where RFID-based tracking and tracing helps. Understanding the source of your inventory losses is the first step toward mitigating them. Here's a closer look at the key stages where losses often rear their costly heads: 

Inventory visibility serves as a powerful tool to detect and combat distribution fraud by shedding light on irregular sales channels and unauthorized resellers. With a clear view of your supply chain, you can take proactive measures to protect your brand's reputation and revenue streams. 

Conclusion: know your stuff 

The world is ever-changing – and so is retail. For a successful retail business, you have to know at all times: Where are my products? How much do I have in stock? How can I make merchandise simply available to my customers?  

Technology can help to support sustainable and profitable business models. When retailers use RFID technology to improve inventory accuracy, they gain more than just better data; they gain the ability to match supply and demand. Ultimately, it allows retailers to have complete visibility of their supply chain and shows in detail which products are available at which exact location. This makes it simple to have products available anywhere, anytime.    

Tom Vieweger
RFID business expert
Tom Vieweger