Improving Store Inventory with Technology, Processes

Compared to distribution or fulfillment centers, store inventory is often seen as the weakest link when it comes to SKU accuracy, with rates that can be as low as 65%. This leads to out-of-stocks and unhappy customers.

As omnichannel demand picks up, stores are playing an increasingly critical role in ecommerce order fulfillment, making inventory visibility and accuracy a must-have capability. So how do you store inventory accuracy?

One increasingly popular approach is the use of radio frequency identification (RFID) technology to allow for better tracking and managing of SKUs across channels. Store inventory accuracy figures in particular have been known to bump up to over 90% using RFID solutions.

Sharing their insights on this important topic at Ecommerce Operations Summit 2019 were:

  • Steve DeNunzio, director of business logistics engineering, Ohio State University
  • Steve Reade, director of distribution, DSW
  • Jonathan Aitken, director of digital and RFID partnerships, Avery Dennison
  • Hilbert Dijkstra, director of product management, Nedap Retail Inc.

Here is a summary of the tips they provided to attendees:

Considering RFID? Start with a Pilot

RFID can be a great tool to boost omnichannel accuracy and competitiveness, but don’t just dive straight in. Run a small pilot program for three months to make sure it’s a good fit and generates real ROI, then expand it from there. Identify exactly where it’s driving results, so you know where to put your focus when you scale up. When measuring, remember to cast a wide net; take into account the cost of dissatisfied customers, split shipments, order cancellations, etc.

Solve Systemic Issues Before Layering RFID On Top

If you have bad processes, no amount of technology will fix it. You need to get that right first, then scale up using technology. RFID forms the base layer to stack up omnichannel tactics like buy online pickup in store (BOPIS) and ship-from-store, so your foundation needs to be strong. A good rule of thumb: Cost per RFID chip is about 5-6 cents – and don’t trust the 1-cent chips from Alibaba. These days, RFID tags cost about the same as an Amazon transparency tag.

Automate Your Back-End Processes

This frees up your associates to focus more on delivering a great customer experience. Inventory accuracy still requires a combination of manpower and machine power. While robot assistants are in the not-too-distant future, they are still quite expensive and limited in their ability to maneuver backrooms and multi-story stores. In the meantime, there’s still technology you can use to cut down time in the backroom and get your associates out front helping the customer.

Prioritize Engagement from Store Associates

A technology is only as strong as the people using it. RFID can be a great way to make mundane tasks like inventory counting more manageable. You can also use staff incentives like store credit and a rotation schedule to prevent burnout and keep store inventory accuracy high. New solutions can come from anywhere; promote the flow of innovative ideas from all levels.

Be Patient and Resilient

True omnichannel technology integration takes a lot of time and work. Look for systems that allow you to achieve greater inventory visibility and accuracy without having to switch between applications. Also, important tactics like perfecting your in-store scarcity strategy using RFID will take time to perfect.