Last updated on August 5th, 2024 at 01:18 pm

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While many different technologies help drive omnichannel retail, RFID technology is uniquely positioned to streamline both retailers’ and customers’ experiences. Thanks to its ability to track products in real time, RFID technology can significantly enhance inventory accuracy on the retailer side while facilitating easy in-store checkouts for shoppers. It also assists with loss prevention and returns fraud, among other features – which are revolutionizing the retail sector.

RFID, which stands for radio frequency identification, lets brands track products from their initial shipment to the point of purchase. RFID technology leverages wireless communication and electromagnetic coupling to give an item a unique identifier. This identifier then becomes an RFID tag that brands can link to particular products, in lieu of a barcode. With many retailers attempting to streamline their physical and digital shopping channels to maintain a more accurate overview of their inventory and create better in-store experiences for customers, RFID technology is rapidly rising in popularity.

Kris Barton, Senior Director of Market Development at Avery Dennison, discussed RFID’s transformative impact on retail operations during an Endless Aisle podcast episode with Marcus LaRobardiere, NewStore’s Vice President of Marketing. During their conversation, Kris and Marcus explored how brands can leverage RFID technology to glean more valuable data, improve inventory management, and provide product authentication.

Read below to learn more about how RFID technology is enhancing omnichannel retail, and listen to the full podcast episode here.

How RFID Technology IDs Retail Gaps

RFID technology’s access to real-time data enables those who leverage it to identify gaps across retail operations and inventory management practices. By giving retailers insight into these analytics, the technology can help reveal any supply chain issues, as well as consumer demand for certain products.

“The interesting thing is when people ask, ‘what does RFID do?’” Kris said. “The short answer is it tells you where your problems are. I tell people, ‘RFID doesn’t fix your problems, but it helps you see your problems.’

“I often talk about it like a flashlight in the corner,” Kris continued. “Everything looks fine over there. You put the flashlight [on] and you’re like, ‘Look at all that dust.’ What RFID does is allow you to collect a lot of data in a very precise fashion in a very fast period of time. Now you have the ability to react to real-time data.”

Kris also detailed how a variety of industries are taking advantage of RFID technology’s many benefits – not only the apparel sector.

“Apparel remains the largest penetrated group for item-level RFID,” Kris said. “But there’s a lot of other activity going on in pharmaceuticals. There’s a lot of stuff going on in aerospace, in automotive, and other industrial settings. We’re seeing these other areas see the benefits of RFID and leverage that technology to handle the gaps they’ve got.”

RFID’s Impact on Inventory Accuracy 

RFID technology is widely recognized for equipping retailers with better inventory insights. This results in retailers being able to make more informed decisions on stock levels across their locations and the types of products they carry. Inventory accuracy also helps minimize overstocking, which can significantly impact a brand’s sell-through rate.

“When I think about a typical retail environment, the inventory accuracy is going to be in the neighborhood of 65 to 70% accurate,” Kris said. “That doesn’t mean [retailers] think they have 100 items and only have 65 items across the entire store. What it means is…if you think you have five [items] and you only have four, that’s inaccurate. If you think you have five and you have six, that’s inaccurate.

“So when you are trying to capture data, it becomes a bit more tricky…like, ‘hey, what can I promise to the consumer in terms of online sales?’”

Investing in technology that yields better inventory accuracy is also helpful for companies that measure their inventory on an infrequent basis.

“Typically, retailers will do inventory once or twice a year,” Kris said. “It’s very expensive, so they don’t want to do it very often. A lot of times, they’ll do it in periods where they’ve got the lower level of inventory so that it takes them less [time] to count. But ultimately, over time, that inventory will degrade. 

“The ability to collect this data and make better decisions is really driving RFID across the board.”

How RFID Technology Reduces Returns Fraud

Another use case of RFID technology that’s growing in popularity is returns fraud. Once products receive their unique identifier, it becomes more challenging for individuals to engage in returns fraud and attempt to collect a refund or store credit for an item they didn’t purchase.

“Inventory accuracy is at the heart of almost every installation we do,” Kris said. “But some other use cases have emerged. Combining a digital ID with the garment that gives that EPC value, which is basically a serialized version of the SKU – some representation at the point of sale – is a big unlock. 

“Most retailers are utilizing a linear barcode,” Kris continued. “You’re checking out at the SKU level, not at that particular item level. So somebody brings something in – it’s another one of this particular SKU…did they buy it? You don’t know. They don’t have a receipt.

“You give them store credit. You don’t know that might have been a shrink incident. So if you have that as a 2D barcode and you’re matching that with the EPC and ringing out at that level, now you know this item has been purchased or it’s not been purchased. Returns fraud is an area that we’re seeing grow very quickly with several different retailers.”

Enhancing Checkout Experiences with RFID Technology

In addition to reducing returns fraud, one of the fastest-growing use cases of RFID technology revolves around in-store checkout experiences.

“The other one that’s been growing a lot would be self-checkout or assisted checkout,” Kris said. “We’ve all been to stores, especially during peak season, [where] queue lines are long. I could [take] all my items and put them in a basket; it rings it all up, shows it on a display. I swipe my credit card, and I’m out the door in 30 seconds.”

This method of line busting can serve as a major incentive for retailers seeking to enhance their in-store shopping experiences. They can also invest in mobile point-of-sale (POS) systems equipped with RFID technology. These solutions allow customers to check out from any point in the store using contactless payment methods, like Tap to Pay on iPhone.

Additionally, brands can use RFID technology to offer product authentication and information – such as details about the materials found within the item. If the item is sustainably made, retailers can promote that as a selling point for environmentally-savvy shoppers.

“We’re seeing some other things around product authentication,” Kris said. “If I get a digital ID, I can do consumer engagement things through a QR code and look at the origins of this or the production methodology, the material makeup – all the sustainability things people are starting to become more focused on.”

More Data = Better Omnichannel Practices

Ultimately, retailers that can collect and leverage more data will be better positioned to upgrade their omnichannel practices. With so many brands offering both digital and physical shopping options these days, the ability to more accurately manage their supply chains will streamline retail operations, reduce extraneous costs, and enhance their customers’ shopping experiences.

“The people that can have the data better in a faster period are going to be able to react better and make the right decisions,” Kris said. “Their costs are going to go down. Loss prevention is becoming a huge piece, in the U.S. especially. I also think it’s going to allow people to be a little leaner in their supply chains because they’re going to know, ‘Hey, I can ship this down here and know that when it’s gone, I can replenish faster.’”

Companies must also realize that omnichannel now plays a crucial role in retail operations – and data-driven solutions like RFID technology can truly revolutionize the sales journey for staff and customers alike.

“Omnichannel has been around for a while, but people still call it omnichannel, and to me, it’s called retail,” Kris said. “If you’re not doing omnichannel, you’re not doing retail.

“This is something everybody talks about – how do I do omnichannel? Why do I need RFID to do omnichannel?” Kris continued. “You need RFID because you need to do retail. And being omnichannel enabled is part of table stakes right now.”

“You can’t do good retail without good information about what you have and getting all those benefits that you see with RFID every day.”

To learn more about how your business can take advantage of omnichannel data, speak to one of our experts today.

Last updated on July 25th, 2024 at 04:57 pm

In today’s competitive marketplace, retail brands must battle for consumers’ attention and wallet share. This is especially challenging among ecommerce giants that offer a plethora of products and convenient shopping options. As a result, many brands may opt to increase their inventory to attract more consumers. However, to keep turning a profit, brands must ensure they maintain a favorable sell-through rate. 

Below, we cover how maximizing sell-through rate can help brands benefit from better inventory accuracy and a more efficient supply chain.

In this article, we cover:

• What Is Sell-Through Rate?
• How To Calculate Sell-Through Rate
• Why Sell-Through Rate Matters
• How Inventory Visibility Impacts Sell-Through Rates
• Why Sell-Through Rate Is an Important Metric

What Is Sell-Through Rate?

Sell-through rate refers to the amount of inventory a brand sells relative to the number of products bought from the manufacturer. 

Brands with favorable sell-through rates can treat those as indication that their sales performance is strong. Those with lower rates may want to review their marketing tactics and inventory management to understand where they can make changes.

The ranges for sell-through rates can fluctuate based on market trends and seasonal products. For instance, if customer demand for a certain type of item is extremely high due to a specific trend, or shoppers clamor to buy particular products during the holiday season, those factors can drive up the brand’s sell-through rate.

How To Calculate Sell-Through Rate

To calculate sell-through rate, you divide the number of products sold by the number of products purchased from the manufacturer. Then, multiply that number by one hundred. That percentage is the sell-through rate.

Many brands calculate sell-through rates on a monthly basis to ensure they stay on track to hit sales goals. This then provides companies with multiple benchmarks to review at the end of the year, which they can use to determine whether sell-through rates fluctuate at certain times.

Retail brands seeking a strong sell-through rate should aim for 80% or above. However, according to a study conducted by Coresight Research, non-grocery retailers typically hover around a 60% sell-through rate for full-price products. 

Why Sell-Through Rate Matters

Sell-through rates help brands balance supply and demand. If you purchase too many products from manufacturers, you will have lots of leftover stock. This will then eat into profit margins and increase storage fees. 

On the flip side, brands that purchase too few products will not meet shoppers’ demands and may end up losing them to a competitor. Retail brands that effectively monitor their sell-through rates will stand a much better chance at ensuring their longevity. 

A strong sell-through rate help brands:

• Reduce markdown losses: Brands typically mark down items that are not selling well. If you order the right amount of inventory from the get-go, you won’t need to sell as many products at a price reduction.
• Cut storage costs: Maintaining stock in brick-and-mortar locations is expensive, and brands do not want excess inventory collecting space where new products can live. By achieving a favorable sell-through rate, brands can ensure they use their physical retail space efficiently.
• Manage inventory: Inventory management is critical for any brand, particularly those with omnichannel shopping options. Examining the sell-through rate helps brands determine which products are selling well and which aren’t. The findings will help inform stocking needs and may also forecast future trends.
• Develop metrics for success: Brands can aim to surpass their sales targets by measuring their sell-through rate. To achieve a strong rate, you will need to identify opportunities to operate in a more strategic manner. This could mean swapping manufacturers or tweaking inventory to strive for a better rate.

How to Improve Sell-Through Rate

Improving sell-through rate involves a combination of strategic planning, efficient operations, and effective marketing tactics. Here are several strategies you can consider:

Understand your customer

Understanding your target audience, their preferences, behaviors, and purchasing patterns can help improve your sell-through rate. Use tools to gather data on customer demographics, shopping habits, and product preferences. This insight will help you tailor your inventory and marketing strategies accordingly.

Clienteling, a modern customer service technique that allows brands to build long-lasting relationships with customers, can help you gain next-level customer data. By understanding individual customer preferences, purchase history, and needs, brands can engage customers on a more personal level and drive sales.

Enhance product presentation and store layout

For your online store, invest in high-quality product photography and compelling product descriptions to showcase your offerings effectively. Provide detailed information about features, benefits, and usage instructions. Optimize product listings for search engines and e-commerce platforms to improve visibility and attract more potential customers.

In-store, it’s important to place high-demand or featured products in prominent locations to immediately capture customer attention. You’ll also want to implement a logical and intuitive store layout that facilitates easy navigation and minimizes congestion, allowing customers to browse comfortably and efficiently. Regularly update product displays and arrangements to showcase new arrivals, seasonal promotions, and complementary items, keeping the store fresh and engaging for repeat visitors.

Enable endless aisle shopping

Endless aisle technology lets store associates access and sell inventory from a variety of distribution centers and locations. It also offers insight into real-time inventory so they can view the full product catalog across the enterprise.

With endless aisle, store associates can help customers make purchases if their desired items aren’t available in a particular location. For instance, if a shopper wants to buy a shirt not available at their nearest store, an associate can leverage endless aisle technology to check if a nearby distribution center or store location carries the item. If the item is available in another location, the store associate can complete the sale on the spot and ship the item directly to the customer. This allows brands to fulfill orders from a variety of locations, while saving sales. 

Leverage store fulfillment options

Brands seeking to move inventory from brick-and-mortar stores can offer customers a variety of store fulfillment options. Store fulfillment allows brands to complete and ship orders from their physical locations. Customers can then retrieve their orders by choosing from buy online pickup in-store (BOPIS), curbside pickup, or ship-from-store options. This clears more space for new inventory. Additionally, shoppers who come in to pick up their order may make a purchase, further increasing the sell-through rate.

Offer retail promotions

Brands can also achieve a better sell-through rate by effectively leveraging retail promotions. Certain types of tactics, like percentage discounts, enable them to move inventory that’s not selling well by advertising a percentage off a certain item or an order threshold. Percentage discounts may also fuel sales from inactive shoppers, motivating them to make impromptu purchases due to the limited-time deal.

Brands with excess inventory that need to sell more units can use tactics such as tiered promotions, buy one get one (BOGO) deals, and other bundling opportunities. These all encourage shoppers to purchase more products in one transaction and are especially useful for selling complementary products – such as socks and shoes – or items with expiration dates or shorter shelf lives.

How Inventory Visibility Impacts Sell-Through Rates

Brands must maintain up-to-date supply chain information so they can attain a favorable sell-through rate. Inventory visibility refers to the practice of tracking the movement of inventory throughout the sales cycle in real time.

This gives retailers important data on sales, stock levels, and product demand. The data then enables them to make more informed choices related to inventory management. Some of these decisions may include forecasting demand for certain items and avoiding overselling or underselling inventory.

Additionally, inventory visibility can empower store associates to cross-sell or upsell various products. Store associates can also leverage the visibility to drive purchases of current inventory before the retailer buys additional items from manufacturers.

To improve their sell-through rates, brands can invest in solutions like omnichannel order management systems and RFID technology. 

An omnichannel order management system captures all customer, inventory, and order data in one platform. It also lets retailers engage in more efficient operations by managing all inventory across the enterprise. They can enable item-level order routing based on availability, location, and fulfillment capacity.

Meanwhile, RFID technology allows brands to track inventory from initial shipment to point of purchase via wireless communication. This ensures a high level of inventory accuracy and supply chain visibility, as they can access real-time data on sales and stock levels at any time and from any location.

Why Sell-Through Rate Is an Important Metric

Ultimately, setting – and then exceeding – sales goals is key to any retailer’s success. Sell-through rates help brands identify their supply chain’s effectiveness. They also assist brands with standing out in a competitive marketplace. 

A favorable sell-through rate indicates that a brand is accurately purchasing top-selling products from manufacturers. A low sell-through rate demonstrates that brands may need to dig into why their inventory is moving slowly.

The good news is that lower sell-through rates are fixable – if retailers are willing to invest in solutions like inventory visibility and omnichannel order management. These solutions will support faster inventory turnover, which will subsequently enhance retailers’ bottom lines.

Interested in learning how your business can improve its sell-through rate? Speak with one of our experts today.

Last updated on July 25th, 2024 at 05:00 pm

In today’s digital era, many aspects of retail are going contactless – from payments to inventory tracking. One technology that’s powering the ability to visualize inventory across its shipping and purchase life cycles is RFID. Thanks to RFID solutions, retailers can transform the way they approach their inventory management. This allows for more product visibility, streamlined operations, and additional contactless payment options.

RFID technology also provides benefits to consumers and removes friction from the in-store shopping experience. It enables shoppers to quickly scan products and check out via mobile point-of-sale (POS) solutions. Ultimately, the benefits of RFID technology in retail have made it a vital asset to brands. It especially aids retailers that want real-time data to gain better insights on their products and their consumers’ shopping habits.

What is RFID?

RFID stands for radio frequency identification. It’s a form of technology that enables retailers to track items from initial shipment to point of purchase. RFID technology encompasses four major components: RFID tags, receiving antenna, RFID readers, and software.

The RFID system uses wireless communication and electromagnetic coupling to assign a unique identifier to an item. These unique identifiers become RFID tags that brands can link to specific products. RFID technology has started to eclipse the popularity of barcodes, as it offers real-time data updates and the ability to identify items not in direct view. 

Kris Barton, Senior Director of Market Development – RFID at Avery Dennison, recently sat down for an Endless Aisle podcast to discuss the rapid adoption of RFID technology in the retail industry.

“What RFID does is allow you to collect a lot of data in a very precise fashion in a very fast period of time,” said Kris. “When I think about a typical retail environment, the inventory is going to be about 65 to 70% accurate. The ability to collect this data and make better decisions is what really is driving RFID across the board.”

For more insights on the benefits of RFID in retail, listen to the full podcast and read on below.

“When I think about a typical retail environment, the inventory is going to be about 65 to 70% accurate. The ability to collect this data and make better decisions is what really is driving RFID across the board.”

Kris Barton, Senior Director of Market Development – RFID at Avery Dennison

Top 4 Benefits of RFID Technology in Retail

RFID technology offers many benefits to retailers, with the following notably streamlining experiences for store associates as well as shoppers.

1. Achieve High Levels of Inventory Accuracy and Supply Chain Visibility

Inventory management is crucial to both retailers and consumers. It allows brands to view real-time information on sales, stock levels, and consumer demand for specific products. This then lets retailers make more informed choices about which products to stock, reducing out-of-stock situations and minimizing overstocking.

Meanwhile, real-time supply chain visibility allows consumers to browse up-to-date products online or via mobile. They may then choose from a variety of fulfillment options at the point of purchase, such as buy online pick up in-store (BOPIS), same-day delivery, and ship-to-home. RFID solutions also offer a faster returns process, which saves consumers time.

2. Enable Omnichannel Fulfillment

RFID technology’s real-time tracking analytics offer numerous ways to streamline retail operations and fulfillment. The ability to quickly locate products via tags enables store associates to order more inventory as needed. They can also quickly find customer-requested items in the store.

If the customer’s desired items aren’t available in a particular location, associates can check nearby stores’ stock. This omnichannel approach to fulfillment helps staff ensure that customers can receive the items they need.

3. Improve Loss Prevention and Product Management

Another benefit of RFID technology in retail is its ability to support better inventory management across many sectors. For example, RFID tags can monitor certain product temperatures and alert if moisture compromises storage conditions. They can protect luxury goods by including product authentication information as well.

RFID technology also helps manage smaller products, including beauty items. It can monitor the number of items left on shelves to ensure that shelves always remain stocked, displaying all available options to shoppers.

Additionally, RFID systems offer discreet anti-theft solutions. If an individual attempts to leave a store with a stolen product, that product’s RFID tag will transmit a wave to the nearest receiver and alert the staff. This results in greater loss prevention.

4. Enhance the Customer Experience

RFID technology can serve as a shopping companion for customers, especially when used in smart fitting rooms. Retailers that offer RFID-enabled fitting room experiences enable shoppers to walk inside with their items and access personalized information about other available product styles and colors, as well as styling suggestions. This can also be an optimal way for brands to upsell other products and services. 

While consumers enjoy a completely customized shopping experience, brands will also gain important data. This can include data around shopping habits, such as conversion rates for items brought into fitting rooms and information on which products garner the most interest.

Another common use of RFID technology in retail is for line busting in stores. This occurs by supporting seamless and faster checkout experiences. Line busting is when store associates leverage mobile technology to help customers quickly move through lines at brick-and-mortar retail locations.

Mobile point-of-sale (POS) systems or self-service kiosks with RFID technology can scan products and let customers check out from anywhere in the store – without encountering long lines. Shoppers can also use contactless payments to make purchases, which results in a much more convenient experience. Solutions like Tap to Pay on iPhone capture payments via platforms including Apple Pay, physical credit cards, store gift cards, and more. Ultimately, contactless payments help drive more sales, especially during peak shopping periods.

How RFID Technology is Powering Omnichannel Retailing

The many benefits of RFID technology in retail underscore why it’s a staple in the commerce ecosystem. As brands consider strategies to enhance in-store experiences for sales associates and shoppers, investing in RFID-enabled solutions offers a significant return on investment. RFID technology also allows retailers to seamlessly manage their digital and physical offerings, as well as forecast potential best-selling products or shopping trends.

This ability to monitor inventory across its lifecycle and personalize consumers’ shopping experiences – all within one technology’s system – helps brands become true omnichannel retailers. 

Speak with one of our experts today to learn how your business can reap the benefits of RFID technology in retail.