- Posted February 4, 2014 by
This iReport is part of an assignment:
Xterprise’s Clarity™ item-level RFID software setting the foundation for omnichannel implementation at hundreds of stores around the world
The term ‘omnichannel’ encompasses a broad range of retail practices built on or related to the idea of delivering a consistent customer experience across marketing, retail and fulfillment channels. But for many retailers, implementation of an omnichannel strategy begins with unifying internet and store inventory data to enable same-day pickup and in-store fulfillment. The ability to execute on such an initiative is predicated on a clear view of inventory levels in near real-time. Without accurate inventory, retailers are forced to hold additional items as safety stock rather than making them available for online purchase fulfillment or transfers between stores. Some retailers report holding five items in back stock for every one on the floor when implementing in-store fulfillment programs because they lack confidence in inventory levels.
According to a ChainLink Research report titled “The ROI for RFID in Retail”, attempting to employ omnichannel fulfillment without having clear inventory visibility can be “very bad for business, customer satisfaction, and reputation,” as customers are unable to obtain what they were promised by the retailer. By using Clarity™’s item-level RFID solution, retailers have found that they can reduce safety stocks to optimal levels while confidently offering in-store pickup and in-store fulfillment to online customers. Greater space utilization has also allowed these retailers to offer a selection of items closer to that which can be showcased online, making the store shopping experience more consistent with the web.
Xterprise estimates that over 200 stores worldwide are using its Clarity™ software to realize omnichannel strategies today, shipping hundreds of online orders daily from the closest store that has the item in stock. Prior to implementing Clarity™, such a feat was impossible, with no way of knowing whether a particular order could be fulfilled from a particular store or not. Item-level RFID has allowed these stores to save on shipping costs and deliver items to their customers faster than ever before.
According to company President Dean Frew, “With inventory accuracy close to 99%, retailers are finding they can do a lot more with what they already have—if a customer wants to pick up an item they saw online, they can say confidently that the item is in stock. They don’t need to worry about shorting the store and creating out-of-stocks on the sales floor, either. All of this comes from the item-level view that Clarity™ delivers.”
“Inventory accuracy is the foundation of getting omnichannel right,” continued Mr. Frew. “Item-level inventory systems are the only practical and proven approach for realizing these omnichannel business cases.”
With retailers like Macy’s, Kohl’s, and the Gap making headlines for their omnichannel ambitions, it is no coincidence that many of them are testing and moving toward full implementation of item-level RFID in relevant categories at the same time. According to Macy’s Chief Omnichannel Officer Robert B. Harrison, “We look at RFID to be a very big part of our future, not just in how we run our business, but also from an omnichannel perspective as well…We are extremely excited about the accuracy it’s going to bring to our business, because having the exact quantity of product in the store that we think we have will be a huge sales driver.”
Clarity™ can be utilized as an essential tool for implementing an omnichannel strategy that works well with existing e-commerce platforms. The same simple functionality used to fulfill online orders in-store can also be tailored to enable sales floor associates to locate items in nearby stores that are not available at their own location, capturing sales that would potentially be lost to competitors without the kind of inventory accuracy Clarity™ provides. Enhanced replenishment at both a store and distribution center level has given retailers increased flexibility in the number of items they carry, back stock levels, and channels they use to deliver a positive customer experience.