New Research Highlights Critical Importance of RFID Technology to Ensure Inventory Accuracy and Enable Unified Commerce
IHL Group's study, Retail's Inventory Distortion Problem: Sizing it all up, spotlights the enormous global inventory distortion problem for retailers today. This combination of out-of-stocks (OOS) and overstocks is an estimated $1.1 trillion problem for the retail industry1. Because of this issue, 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 and the average loss of 8.7% of total sales due to inaccuracy is too much.
The key to offering various fulfillment options is having visibility into the true real-time inventory in every store enabled through 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% and maintain it at 95-99%4. With enhanced inventory accuracy, the number of shoppers who can find the inventory they want can increase sales by 5% to 25%5.