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The Visible Value Blog

Item-level Tagging Makes In-Store Fulfillment a Retail Reality

Posted by Sabine Nickel

June 29, 2012 at 10:45 AM

While other areas of the global retail industry are still in recovery, e-commerce will surpass nine percent of total U.S. retail sales by 2015 according to JDA. This 50% increase is up from six percent just this year alone. Driving this number are companies like Macy’s who are tooling up to satisfy online orders in-store. Michael Koploy, ERP Analyst for Software Advice, reports that Macys is outfitting nearly one-third of its retail outlets to serve as order-fulfillment warehouses.

However, initiatives like the one Macys is pursuing will require a targeted investment in technology and employee training. Fortunately, item-level RFID track and trace technologies offer the smoothest path and the best solution for in-store fulfillment.

RFID Tagging Meets the Challenge

RFID Item level taggingAccurate inventory tracking is the key to success with in-store fulfillment. However, without automated, item-level visibility, retailers face challenges ensuring that the right order is pulled from the right location, and that store associates can quickly locate the order. RFID item-level tracing allows software systems to match, track, and trace the order from the warehouse door to the sales floor.

Fact is, the return on investment (ROI) for RFID comes from reducing the time and labor required to track and manage inventory, reduce losses and theft, and enhance the customer experience for improved sales lift.

Item-level tracking achieves 100 percent inventory accuracy because RFID tags affix directly to the item or its packaging. Item-level tags originate at the manufacturer and extend through the distribution channel to the retailer. Tagging integrated with data management and online order fulfillment systems allow a retailer to experience precise accuracy. Knowing the in-store and in-warehouse location of each product provides the retailer precise accounting for each item, who can then execute a physical inventory and order fulfillment in minutes—as opposed to hours, or even days.

Driving Benefits Across the Retail Ecosystem

RFID tags provide ample data storage for a wide range of information and applications. For example, tags attached to apparel can contain three dimensions of information: style, size, and color. At order fulfillment time, store associates can use a handheld RFID reader, scan and locate the product from up to 30 feet away, and automatically record the transaction.

This level of automation and 100 percent inventory visibility opens up huge opportunities for linking the store with the warehouse and multiple sales channels. Doing so also enables accurate forecasting and timely market metrics for true demand-driven merchandising.

Now, retailers like Macy’s can quickly and cost-effectively deliver best-in-class online order fulfillment right in their store. It’s a win-win situation for the customer and retailer. Customers gain the convenience of browsing and ordering products online, and then pick up their products in-store. For the retailer, drawing customers back into the store to pick up their order means opportunities for sales associate touch time and cross-selling—which drives even more sales.

Item-level RFID tagging stands to revolutionize how retailers manage their inventory while creating opportunities for efficient “right now” in-store fulfillment. For more information about RFID and their applications in the retail industry, check out this White Paper.

Topics: APAC, North America, Latin America, EMEA