How Real-Time Visibility Improves Customer Fulfillment for Retailers

By Susan Flake

The consumer goods sector is no stranger to competition, and today’s multichannel retail landscape has created high consumer expectations. Retailers are challenged to implement omnichannel fulfillment strategies and adopt emerging technologies to meet these expectations.

A key source of customer dissatisfaction that continues to plague retailers of all sizes is out-of-stock (OOS) merchandise. Zebra's 10th Annual Global Shopper Study found that 70 percent of shoppers reported that they leave stores without the product they needed or went to find due to out-of-stocks. There are no signs that consumer demand will slow down, so it’s critical for retailers to take the right steps toward having deeper visibility into their inventory to ultimately prevent losing customers and meeting sales goals. One popular solution to retain customers is the adoption of RFID technology, which heightens merchandise visibility throughout the supply chain from the time inventory is shipped from the warehouse and received in a store’s back room, to when it’s stocked and replenished on the sales floor.

For today’s shoppers, creating an omnichannel experience is essential. A superior omnichannel experience is dependent on five factors: product availability; shipment speed; buy online, pick up in-store (BOPIS); click-and-collect programs; and product pricing. In recent years, new convenient fulfillment options have become increasingly popular and mutually beneficial for shoppers and retailers. If executed successfully, customers receive their orders often on the same day or within hours of ordering and retailers see an increase in foot traffic that can lead to auxiliary sales. It’s key to make sure these elements are touched upon as effortlessly as possible to maintain customer loyalty. If the retailer provides product availability at a competitive price, it will see a return on investment.

When retailers adapt and implement an omnichannel strategy, most begin by enabling their stores to ship product directly to customers near them. However, without RFID technology, the industry rate of those success averages was between 35 percent and 60 percent due to inaccurate inventory numbers. This is caused by a defective system of record that lacked regular updates.

On average, inventory levels degrade at a rate of 3 percent month-over-month between the system of record and what a store has in stock. On the contrary, stores can have inventory that’s never made available for sale online because the home office is unaware. Retailers face high consequences for each online order that goes unfulfilled due to inventory issues. For example, when an OOS order is placed, the margin of that product erodes with higher shipping costs. Furthermore, in-store labor costs increase as multiple stores scramble to locate the same product to fulfill the order. Finally, the customer’s experience takes a hit, increasing the chance of them canceling the order altogether, ultimately resulting in a lost sale.

Retailers around the globe are investing in new technologies to redefine their operations and the shopper experience. The benefits of knowing what you have and where it’s located drives more sales and customer satisfaction, increasing staff productivity and efficiency. Stores that implement RFID technology not only improve first pick rate success up to 95 percent, but also see a reduction of picking time. These gains enable more picks per hour and free up store associates to assist customers.

By reinventing a retailer’s supply chain, with upgrades that enable automated, real-time inventory visibility via IoT, such as RFID, merchants can boost inventory levels to as high as 95 percent. Zebra’s Future of Fulfillment Study found that in North America, 79 percent of retailers surveyed plan to invest in automated inventory verification and sensors on shelves. RFID solutions enable retailers to meet that consumer demand through heightened visibility across the store at an item level, allowing staff to accurately capture what products they have and don’t have.

Once deployed, RFID with IoT can provide a deeper understanding of how a store operates and performs. RFID also provides insights into the supply chain and the efficiency of product flow from distribution to stores. It can also provide insight into customer behavior, helping you make better decisions for your business with accurate data that's collected, including product availability, store efficiencies, customer experience, reverse logistics and customer insights. All of this comes full circle to create a destination with an immersive customer experience.

Achieving omnichannel excellence relies on data and visibility into that data provided by RFID technology. Once the foundation is built, the blending of online and brick-and-mortar can continue to evolve and transform to help retailers gain the upper edge in the age of intense competition.

Susan Flake is the director of RFID business development at Zebra Technologies, a company that builds enterprise-level data capture and automatic identification solutions that provide businesses with operational visibility.