Smaller Urban Stores Could Benefit a Lot from RFID

urban-stores-retailer-inventory-management-accuracy-rfid-blogNowadays in the United States, there’s a common phenomenon that retailers are moving into cities across the country in order to attract younger buyers. At the same time, formats that worked in the suburbs for smaller stores are being abandoned. This may seem to have nothing to do with RFID, but actually it does. Here is how RFID can help retailers trying to sell in a smaller urban store.

1. Improved merchandising. At a smaller store, displaying a large number of styles or keeping stock units could be a challenge. Many retailers avoid out-of-stock at large stores by filling shelves with the same item. But with RFID, retailers can offer greater variety, for they don’t need to maintain safety stocks. Accurate inventory visibility lets a store see when an item is out of stock, so that a retailer could have one of each of 5,000 items on display, rather than five of each of 1,000 products.

2. Improved replenishment. If you have less stock on the floor, it becomes more important to restock shelves regularly. In this case, RFID will benefit you. Not only can RFID inform managers when an item becomes out of stock, but readers deployed between the store floor and back room can determine whether a product was moved out of the back room. For example, software can alert a manager if an item isn’t restocked within 10 minutes.

3. Improved warehouse-to-store shipping accuracy. If a warehouse picks the wrong items or sends them to the wrong store, a large retailer might still have a lot of safety stock in a large back room, enabling it to prevent out-of-stocks. But at a smaller store, there is little storage space. RFID can not only help prevent out-of stocks, but also ensure that the retailer orders the proper items and that the warehouse picks and ships the correct products.

4. Improved visibility into other stores’ inventory. In an urban setting, a retailer might operate another location nearby. With an RFID solution in place, store associates could obtain real-time visibility into the inventory of that other store, so that if a customer is looking for an item which happens to be out of stock, they could tell the customer, “Sorry, but we don’t have that item in stock in your size, but I see that our midtown store has seven in stock.”

Stores moving into urban environments might find that execution is more vital at smaller stores than at larger ones, since large safety stocks can mask poor execution. However, within an urban setting, if you disappoint a customer, there will likely be a competing retailer just around the corner. So, before you try to do business in a big city, you may take RFID into consideration.