Inventory with RFID increases turnover potential in retail

Articles | By Nedap Deutschland | 21 October 2013
An RFID based inventory is not only more comfortable and faster to perform by employees but also results in an improved stock accuracy and thus higher revenue potential. An RFID based inventory is not only more comfortable and faster to perform by employees but also results in an improved stock accuracy and thus higher revenue potential. Photo: Nedap

Inventory in textile trade

„Ready to sell“ thanks to RFID

Goods can only be sold if they are available in the shelves. What sounds so simple is in fact sometimes hard to realize. Many factors make it difficult for retailers to keep an exact stock overview. Companies miss chances to generate sales by carrying out an inventory only once a year. An RFID based inventory can result in numerous benefits for retailers and generate new potentials.

By Sabine Stockmann, Business Development Manager, Nedap Retail

Actual state analysis

Availability of goods is the basis of every retailer's success, no matter if they operate a store, multiple subsidiaries or maybe an online shop as well. If a retailer wants to optimize their processes and increase stock accuracy of their goods in the warehouse as well as in the sales area, the actual state must be known. Thus the basis of every RFID system in retail is the analysis of the status quo. This is the first barrier which has to be overcome. Aggravating this situation, many restailers supply an online store with their stock. Thus it is even more important to know the inventory on tag level.

RFID is the solution

In the past few years there was an intense discussion on the advantages of RFID for retailers and about where to find the business case of RFID solutions in retail. Although there is still no universal answer to this question, existing solutions can show retailers that RFID can be used uncomplicated in a first step, to observe on a single product group for instance, how stock accuracy can be increased within a short period of time. At the shoe retailer Wolky all articles within an NOS-group which are sold in the store and also via an online shop, were equipped with RFID tags and after only twelve test weeks the stock accuracy within this article group could be increased from 84 to 98 percent. An RFID based inventory makes most sense at products which are highly requested within the product range. If the beststeller is not available there is no chance to generate revenues.

Detecting and eliminating inaccuracies

Although a hundred percent stock accuracy can not be guaranteed even by using RFID, the automatic detection of goods and the subsequent comparism with previous stock data allows to identify inaccuracies limiting product availability and thus reducing sales potential. If RFID is used for inventory and inaccuracies regarding the inventory data occur, it makes sense to investigate where these inaccuracies arise. There are many possible reasons for inventory differences. Products might be stored in a reserve storage area or at another place within the store. If the booking was executed incorrectly or products were even stolen, the differences can result in a downturn in sales. Regular RFID based product detection continually increases stock accuracy. As a consequence, the time which was formerly needed to perform manual inventory can be used to eliminate inaccuracies. Thus the stocks are correctly shown week by week. Performing an annual inventory, retailers miss the chance of identifying and eliminating error sources at an early stage.

No Future without RFID

Nedap's experience shows that retailers, especially in the fashion environment have by now recognized that there is no future without RFID. A deep RFID integration can of course not be realized within one week. EAN codes and data bases for instance need to be redesigned so they can process EPC codes as well. These preparations do not only take a lot of time but also require a considerable financial investment. However RFID will clearly take part in shaping the future of inventory, especially in terms of merging warehousing for retail stores and online shops, in order to avoid double stock keeping.

This article was published in the September issue 2013 of the magazine „RFID im Blick“.

Last modified on Monday, 21 October 2013 10:17