Inventory Accuracy a Top Priority for Returning Retailers
Originally published on wwd.com
According to the full-service RFID solution provider SML RFID, while retailers had stock that was easily flowing from factories to stores just three months ago, they are now looking at empty pipelines. Facing the task of getting all levels back in motion, once it is safe to reopen physical stores, warehouses, and distribution centers, SML RFID notes that accounting for inventory will be among the challenges.
In a survey of apparel and footwear retailers across North American and Europe, SML RFID found that retailers have “little confidence” in inventory levels per stockkeeping unit and also have “more inventory than ever before throughout their supply chain.” The inventory, the company said, was due to sell months ago. Further, SML RFID stated that consumer behavior shifts caused by the uncertainty of COVID-19 could result in another one billion items of excess and miss-planned inventory.
“One of the key considerations that retailers shared with us is the need to take into account during this time the disruption and unpredictable waves of consumer demand that will occur not just over the next three months, but likely over the coming year,” said Dean Frew, chief technology officer and senior vice president of RFID Solutions at SML Group. “Retailers will need to have a clear view of their inventory in order to keep up with the unpredictable demand and supply swings that we will see now and in the near future.”
Notably, SML RFID learned in its survey that retailers’ inventory view was of greater importance to them over improving online order fulfillment or returns management. The company states that as retailers reopen stores, they will need to mark down items and move entire missed seasons of units into storage, saying “all of this must be done in order to make way for the new seasons of product within their stores and exposing it to their e-commerce channels.”
The process begins with getting a baseline inventory position, according to SML RFID, who believes that a highly accurate product inventory count before reopening for business will allow retailers to adjust inventory strategies.