ALL-TAG is taking retail merchandise tagging to a whole new level by offering Electronic Article Surveillance (EAS) security tags that also incorporate Radio-Frequency Identification (RFID) and Omni-Channel Management technology. A single tag will offer increased security, merchandise tracking, inventory management, and the vast array of benefits associated with Omni-Channel marketing. We’re all familiar with EAS and RFID technologies, as well the tags now available that combine them. Omni-Channel Management, however, is a newer concept that we want to share with our customers and site viewers.
Through the strategic coordination of available selling channels, retailers are using omni-channel distribution to maximize revenue and offer their customers a better shopping experience. Omni-channel distribution integrates a retailer’s online, in-store, and/or catalogue selling channels to grant shoppers new capabilities for picking-up online orders in-store and having out-of-stock items shipped in from another retail location. The process enables retailers to move slow-selling merchandise without having to slash prices as well as stock a larger assortment of products, helping to create a better shopping experience for customers.
Online and in-store shopping channels both offer distinct advantages, generating revenue that would otherwise be greatly diminished or lost if either of the channel options was unavailable to the consumer. Aside from increasing sales through gaining a greater reach in the market, another significant advantage of omni-channel selling is the ability to quickly move merchandise from one location to another when an item that is not selling in one store is a hot-ticket item in another. Being able to strategically move merchandise allows supply to be met by demand so that businesses no longer have to absorb the margin loss experienced from discounting slow-moving items as well as the loss of sales resulting from items being out-of-stock.
The online channel saves consumers time and allows them to shop from the comfort of their own home, with the advantage of being able to compare prices, search for product information and reviews, and provide feedback. Furthermore, online shopping behavior generates personalized recommendations used to gain additional sales over time. For some consumers with busy or difficult schedules, the online channel is the only option available to them in the timeframe that they have open during the day. Other consumers are enticed by special online promotions, generating unplanned purchases that would not have been instigated without the online channel.
In contrast, brick-and-mortar stores offer a better sensory experience that many consumers prefer over shopping online. In-store shoppers gain the ability to try items out before purchasing, and are granted instant gratification from being able to immediately take the item(s) home after purchase, a significant value for the in-store shopper. Therefore, omni-channel distribution models offer a steady stream of revenue that would not have been acquired through a single-channel distribution system. In fact, recent research has found that omni-channel customers spend an average of four to five times more than their single-channel counterparts.
Omni-channel delivery is the process of integrating multiple channels in a way that provides shoppers with a seamless brand experience. To begin implementing an omni-channel distribution system, a retailer must first devise a solid plan for addressing the accuracy and visibility of its inventory. The first and most critical step in launching a successful omni-channel distribution network is to attain the necessary IT equipment used to monitor and track inventory, as well as give employees the tools they need to coordinate their efforts.
Whereas most warehouses use an advanced inventory management system to track the quantity and location of merchandise, retail stores have traditionally had a much less accurate tracking system in place. In order to achieve omni-channel fulfillment, retailers need to implement measures to ensure the accuracy of their inventory management system. An example of a critical issue that can arise without inventory transparency is if a customer were to place an online order for pick-up, only to find out that the item was out-of-stock upon arriving at the store. The negative experience would presumably result in a loss of that sale, compounded by the loss of a customer’s loyalty and unlikelihood to shop again.
In order to improve in-store inventory management, retailers need to invest in technology created to track merchandise with accuracy and transparency. The most coveted tracking system currently in play uses RFID technology, employing identification tags that show retailers exactly what merchandise is available and where. RFID was first implemented by department stores with a high rate of success, allowing them to manage the large assortment of items offered. However, with omni-channel distribution rapidly growing in popularity, specialty stores and small retailers have begun to realize the profit potential unleashed by accurate inventory tracking equipment.
Retailers should also consider implementing tools enabling employees to view real time inventory levels and alerting them of online orders placed for pick-up in their store. Equipment of this aptitude would allow employees to locate merchandise in the store as well as search other locations for out-of-stock items to have them shipped to their store for pick-up. For handling online orders placed for in-store pick-up, employees could use the tool to receive timely alerts in order to have the merchandise ready for the customer by the time he or she arrives.
Omni-channel retailing holds great potential for tapping into new streams of revenue and optimizing inventory to reduce shrinkage. The new model offers the opportunity for retailers to reduce out-of-stock mishaps and margin loss resulting from overstocking slow-moving merchandise susceptible to markdown. If implemented correctly, omni-channel distribution can reduce costs, increase sales, and enhance customers’ shopping experience. RFID technology and compatible applications can provide retailers with a holistic view of the company’s inventory, maximizing the revenue potential of omni-channel selling.
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