RFID Talk Blog

RFID: a secret weapon for retailers on Black Friday

Consumers are expected to spend $602 billion during this year’s holiday shopping season. Retailers with real-time inventory visibility stand to gain a sizable portion of that pie.
A new study by Capgemini states that nearly three quarters of consumers will walk away from a retail store if a product is not on the store shelf when they are shopping. The research further demonstrates the danger that out-of-stocks represent to retailers, and the value of RFID when it comes to keeping products in stock.
Black Friday shopping

The National Retail Federation expects nearly 140 million people will shop during the Thanksgiving weekend.

“Our research raises concerns about the ability for large, global businesses to effectively adapt their supply chain processes to anticipate and manage the stress of major shopping seasons like the upcoming holidays, including the critical need to maintain the right items in stock and deliver products on time,” says Paul Cole, senior vice president and head of consumer products and retail for Capgemini’s Business Process Outsourcing Division.

The Capgemini report also says that 9 out of 10 shoppers are likely to shop with another retailer if items are delivered late, a strong message for retailers looking to deploy omnichannel strategies.

By deploying RFID technology at the item level, retailers can track products throughout the supply chain, to the distribution center and to the store shelf. Retailers like Macy’s and American Apparel rely heavily on RFID to improve inventory accuracy and reduce out-of-stocks. Strong inventory visibility at the store level helps retailers like Macy’s to use brick and mortar stores as fulfillment centers for online orders, enabling faster delivery.

The Capgemini study states that only 21 percent of the 150 supply chain executives polled believe that their systems do an excellent job of providing accurate and real-time insights into supply chain performance. However, 86 percent say their main challenge is having the right processes in place to respond in real-time to to volatile consumer demands, while 83 percent site the task of adequately planning for supply chain capacity to address peak demand needs during the holiday season.

“As supply chains become more complex and consumers grow ever more demanding, business executives and supply chain managers are increasingly feeling the pressure to improve their operational visibility and responsiveness to market demand,” says Cole.

American Apparel’s RFID-enabled stores operate at a 99.8 percent inventory accuracy rate, almost unheard of for an apparel chain with such varied SKUs. Last year, American Apparel credited RFID as contributing to very strong sales gains during the holiday shopping season.

American Apparel has significantly improved inventory accuracy and on-shelf availability with a fully automated Senitron inventory visibility solution powered by Impinj. The wide-area RFID system brings immediate benefits to American Apparel’s operations by improving in-store visibility and security and by eliminating manual cycle counting, which will empower in-store staff to dedicate more time to customer service and sales-related activities.

“The Senitron solution delivers on the dream of hands-free, full-time inventory visibility,” said Stacey Shulman, CTO of American Apparel. “We get accuracy levels that meet or exceed handheld readers, in real-time and with less work. We’ve been amazed at the effortless accuracy of the Senitron system to not only deliver counts but also item locations. This enables a wealth of possibilities in our roadmap towards a robust omni-channel shopping experience for our customers.”

Click here to view RFID 24-7’s prior coverage on RFID and retail.

Click here to learn how one retailer potentially lost $15M in sales.

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