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IHL Group Research Highlights Importance of RFID for Inventory Accuracy, Commerce
Tyco Retail Solutions has partnered with several industry groups to examine the value of RFID technology to help ensure inventory accuracy and enable store-level fulfillment. According to the company, new research from IHL Group validates the use of RFID to combat inventory distortion and increase inventory accuracy and visibility as the essential foundation for unified commerce.
IHL Group's study, titled "Retail's Inventory Distortion Problem: Sizing It All Up," spotlights the global inventory distortion problem that retailers face. This combination of out-of-stocks and overstocks is an estimated $1.1 trillion problem for the retail industry. Because of this issue, the report explains, retailers lack confidence in their availability to promise on-hand stock and, as a result, are cautious in leveraging all item quantities for online sales and store-fulfillment options, such as buy online, pick-up in store (BOPIS). The risk to the customer experience is too high, the research indicates, as is the average 8.7 percent loss of total sales due to inaccuracy.
The key to offering various fulfillment options is having visibility into real-time inventory at every store, the study explains, enabled via item-level RFID. Adopting this technology and regular cycle-counting processes helps retailers to prevent inventory distortion, and can increase inventory accuracy up to 99 percent and maintain it at 95 to 99 percent. With enhanced inventory accuracy, the number of shoppers who can find the inventory they seek can increase sales by 5 to 25 percent.
"As today's consumers continue to seek merchandise where and when they want it, retailers must prioritize the implementation of technology that supports a unified commerce strategy," said Brent Brown, Tyco Retail Solutions' VP and general manager for inventory intelligence and the Internet of Things, in a prepared statement. "RFID-based solutions enable retailers to confidently present accurate real-time in-stock positions to meet today's customer expectations and maximize business outcomes."
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