With Salesforce’s 2023 holiday predictions forecasting that BOPIS (buying items online for in-store or curbside pickup) will influence $28 billion in incremental sales during the holiday season, retailers seeking to capitalize on this revenue opportunity need to ensure their store operations and inventory management practices are up to par.
Spencer Hewett, Founder and CEO of Radar, shares how retailers can get their operations in top shape in time for the inevitable holiday rush. The company has successfully helped retailers like American Eagle Outfitters leverage RFID and computer vision-based inventory tracking technology to create a holistic, near-real-time view of inventory across stores to empower both associates and consumers.
Retail TouchPoints (RTP): How do you believe consumers’ omnichannel shopping behaviors will evolve or accelerate during the holiday shopping season?
Spencer Hewett: Consumers have become increasingly accustomed to the speed and convenience of omnichannel experiences due to the pandemic, and these expectations will only continue to ramp up during key selling periods like the holiday season. The pandemic accelerated new consumer behaviors, such as BOPIS. In fact, BOPIS became the new norm for items across all categories, from footwear and apparel to accessories, home goods, furniture and more. This created a ripple effect for retailers that were experiencing a higher volume of ecommerce orders and had to leverage stores as fulfillment centers to process and ship online orders.
As stores were closer to consumers in the “last mile,” orders shipped from stores were able to arrive much more quickly and cost effectively. These BOSS (buy online, ship from store) orders required retailers to streamline their inventory productivity and accuracy using tools like RFID tags and platforms like RADAR, which gives retailers 99%+ inventory accuracy in their stores in near-real time. This holiday season, it’s imperative that retailers execute seamless omnichannel operations, as consumers have a built-in expectation of quick and convenient omnichannel delivery or pickup, especially for last minute holiday gifting and shopping.
RTP: What capabilities are required for success from an experience standpoint?
Hewett: Creating a positive omnichannel experience starts with inventory accuracy. Today’s retailers are experiencing between 65% and 80% inventory accuracy in their stores. They are faced with inventory “shrink” due to several factors, including theft, inaccurate counting, misplaced items and issues along the supply chain. Retailers can no longer rely solely on data of where products are in their supply chain; they need near-perfect, real-time inventory in their stores, especially when BOPIS and BOSS order success relies on these stores successfully functioning as fulfillment centers for ecommerce orders. A lack of visibility causes many issues for omnichannel orders, including cancelations; between 10% and 25% of omnichannel orders are canceled due to inventory no longer being in the store or store associates not being able to find items.
Additionally, store associates tend to “jump” orders to other stores up to six times before either the retailer or customer cancels the order, which creates a negative experience and causes a low Net Promoter Score. For these reasons, it’s imperative for retailers to be able to achieve inventory visibility in real time down to the SKU, color and size level, and enable store associates to find any item a consumer is looking for or that they need to “pick” for an omnichannel order.
RTP: Last year, results indicated that mobile sales and BOPIS reached a whole new level of adoption. How do you think these behaviors will influence retailers’ investments and priorities?
Hewett: This is very true and a behavior that I don’t believe will slow down any time soon. I think that retailers will increase their investments in inventory and store operations tools and technologies that can allow them to deliver seamless omnichannel and in-store experiences for their customers. If you asked most retail executives to share their highest operational priorities, I very much believe that inventory productivity and labor efficiency would be at the top for the vast majority of them.
RTP: Are there any specific challenges retailers need to prepare for as they manage inventory availability and demand during the holidays?
Hewett: Retailers using handheld RFID readers or “wands” need to prepare for inventory miscounts and the fallout from this, as there is a lot of room for human error when there are multiple associates moving around a store several times a month (or more frequently) to count and scan products. Not only is this process extremely labor-intensive; but most retailers have found that they are not reaching the real-time inventory accuracy they need to operate successfully in this omnichannel world. It also requires a focused effort across several teams in sourcing, inventory, store operations, IT and finance, and retailers must ensure they are getting the maximum ROI and using the right technology for it to be efficient and cost-effective.
Always-on, ceiling-mounted RFID systems like RADAR are required to see the ROI from tagging products with RFID, as they provide retailers with the accurate information that they need to replenish stores and keep their sales floor properly stocked at all times.
RTP: What can retailers do to empower employees during this critical time of year, especially since they’re already juggling more tasks and obligations?
Hewett: Retailers must make it as simple as possible for associates to keep their stores replenished with the right products to meet demand, keep their sales floors stocked, and find products quickly and efficiently for customers so that they offer a seamless experience and spend their time on the sales floor generating customer interactions rather than fixing store operations. Retailers need automatic, real-time tools that they can trust and leverage to offer unparalleled experiences and productivity.
RTP: Do you have any key best practices that retailers can apply now, in time for the holidays?
Hewett: If a retailer doesn’t have RFID today, they can work with their store managers and associates to delegate the omnichannel “pick-and-ship” tasks to associates that have been there the longest and have the highest familiarity with the store layout, product and overall inventory levels across categories. Holidays are a hectic time for retailers, which is why it is important to rely on training, clear tasks and role separation, as well as constant reporting on key KPIs each day to ensure the team is getting regular feedback and is able to quickly adjust and improve. Looking to the future, retailers should evaluate and invest in all the tools that help automate their stores and inventory to be able to offer the best possible customer experience.