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New Survey Suggests Retailers Really Need RFID

Retail companies in France, Germany, the United Kingdom and the United States are failing to meet shoppers' omnichannel expectations.
By Mark Roberti
May 18, 2014

A colleague recently sent me a 2013 survey conducted by GT Nexus, a provider of cloud-based services, that seems like a real wakeup call for retailers—particularly those based in the United States. GT Nexus surveyed 5,000 consumers in France, Germany, the United Kingdom and the United States to understand the evolution of the retail landscape, and whether retailers could measure up to consumer expectations. It turns out, according to the survey, that they do not.

The thing that jumped out at me the most was the percentage of respondents who were informed online that they could purchase a product in-store only, only to find it was out of stock. Almost 10 percent of respondents from Germany had this experience. That's bad, right? Well, German consumers had it best—11 percent of French shoppers and 16 percent of U.K. shoppers also had that experience, while a whopping 31 percent of U.S. respondents showed up at stores and were told an item wasn't available.

Companies such as Marks & Spencer and Macy's get it (see Marks & Spencer Leads the Way and RFID a 'Very Big Part of Macy's Future'). If you want to conduct omnichannel retailing, you need to use radio frequency identification, because RFID is the only technology that can ensure that your in-store inventory accuracy is 95 percent or better. Currently, most stores operate at roughly 65 percent inventory accuracy, so it's no surprise that companies would tell customers they have something in the store when they really don't.

But there is more bad news for retailers. Most are not meeting customer expectations when it comes to delivery time, according to the survey results. Three-quarters of German shoppers, 68 percent of U.K. consumers and half of French customers expect goods to be delivered within three days or less. Only a quarter of U.S. shoppers expect goods purchased to arrive that quickly, probably because the United States is much larger geographically than the other countries. Half of all U.K. respondents said deliveries are often pushed back from the original date promised; the percentages in Germany and France were 64 and 68 percent, respectively.

Those surveyed also said on-time deliveries when ordering online, or on-time collections when picking up items at the store, are important to them. But 50 to 70 percent of consumers have experienced delays. Moreover, when shoppers bundle products—if they buy, say, tennis balls to accompany a tennis racket—"retailers are rarely capable of ensuring the products get delivered together," the study's authors write. "Consumers rarely experienced a completely seamless buying process, reporting dissatisfaction with either inventory availability, return policies, or deliveries."

In addition to improving in-store inventory, RFID can help speed up a warehouse's picking process, and ensure that all items are in stock, either in the store or at the warehouse, so they can be shipped to customers or be available for pickup on time. RFID, alone, will not solve a retailer's execution problems, of course. But adopting RFID and instituting best practices, improving training and getting serious about true omnichannel retailing can help to reduce the number of disappointed consumers.

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog, the Editor's Note archive or RFID Connect.

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