RFID: solving the shelf-stocking challenge

This article is brought to you by Retail Technology Review: RFID: solving the shelf-stocking challenge.

Customers today are savvier than ever before.  With time at a premium, and the rise of the Internet meaning consumers now have the ability to carry out price comparisons and research before they even reach the high street, the trend is towards shoppers making targeted shopping trips to snap up the latest bargains, before heading home to order any missing items on-line.

The changing patterns of consumption mean that store managers must do everything they can in order to keep their shelves well stocked, and their staff aware of the inventory status of all product lines.  It is a major challenge for retailers to keep top-selling products in stock whilst providing excellent customer service but it is a challenge that must be met in order to ensure that the most is made of every single customer interaction.

Most stores are fully re-stocked every morning before opening hours, but throughout the day as items get handled, unfolded, moved or purchased, shelves and racks become emptier and messier.  If a customer cannot find what they are looking for quickly and easily in a shop they may simply purchase it online and so, in order to maintain a stores competitive advantage, there needs to be more than just one size of that little black dress or smart pair of shoes. Moreover, if customers spend too long looking for the right item, the perceived waste of time can lead to frustration and in the long term, a reduction in repeat shopping visits, so items also need to be in the correct place.

One solution that retailers have seriously begun to consider to beat this situation is item-level RFID.  With no line of sight necessary in order to read tag information, real time stock location data is provided, allowing a faster and more efficient inventory management.  In turn, shelf replenishment can occur more quickly to make sure customers can find what they want. 

When an RFID tagged item is purchased and leaves its rightful place on the shop floor, the system could be configured to allow this movement to be displayed in both stockrooms and back offices, pointing staff at the shelves which need replenishing, thereby making sure that customers can find what they are looking for.  RFID readers can scan data on all inventory items within a certain space continuously, meaning that the same alert system could operate when clothes are left in changing rooms or shifted to other locations within a store. While this  helps with shelf replenishment it also contributes to the creation of an easier and more pleasant shopping experience, which is likely to improve customer loyalty to a store.

Customer loyalty relies both on the quality of goods and the service consumers experience.  RFID tagging eliminates the need for stock checkers to sort through each individual item on a rack, as they can instead scan a number at a time.  This means that not only is worker productivity increased, but any damage to delicate items through repeated handling is avoided.  In addition, the continuous replenishment of stock means that shelves are kept tidier and fully stocked, significantly reducing the number of queries from shoppers about product availability.  Thus, the productivity of shop-floor staff significantly increases and allows them to focus on what is the most important aspect of the jobs: selling to customers.  When customers find what they are looking for and can also count on store staff to be available to help them with purchasing decisions the overall shopping experience is improved considerably.

By maintaining optimal stock profile so customers can always find what they want and ensuring that the chance of damaging any items in-store is minimised, work processes, productivity and efficiency in-store can all be at their optimum.  Leading US clothing retailer American Apparel has recently rolled out item-level RFID tagging in some of its US stores and has found as a result that the on-floor availability of products now sits at over 99%.  In addition, with the weekly inventory processes now accomplished with just two people in two hours as opposed to the four people in eight hours that the process took previously[1][1], store workers have more time for shop floor activity and offering excellent customer service. 

By the simple action of putting RFID technology in place, retailers can create intelligent stores, with well stocked shelves and knowledgeable staff.  As such, they will be better equipped to tackle the competition created by consumer access to Internet retailers by ensuring that customers have the same access to top quality products as they would when shopping on-line.  This will not only help to maintain the value of the big retail brands, but can also help high street retailers differentiate themselves, grow profits, and stay competitive.  In the final analysts, customers will also benefit from frustration-free in-store experience with the added benefit of face-to-face service which they will never get when shopping online.