The retail industry has faced many challenges over the past decade, but they were accentuated like never before during the last two years. COVID-19 and its following global lockdowns forced the retail industry to face the task of pivoting to omnichannel and store pickup offerings in order to preserve retailers’ customer base and continue driving revenue throughout the pandemic. The trials associated with the execution of omnichannel sales quickly came into focus as retailers came to the realisation that consumer shopping patterns have been permanently altered and they must adapt in order to remain relevant and profitable moving forward.
Understanding an evolving industry
Keen to understand the ramifications that the pandemic had on the retail industry, SML RFID recently undertook global market research, analysing responses from over 500 apparel retail executives and decision-makers across the US and UK. Each respondent provided insight into the sector’s current sentiment to growth and the perceived challenges that retailers anticipate moving forward. The report discusses the impact of COVID-19 on the retail sector, specifically highlighting the pivotal role of digital transformation in the post-pandemic market. In addition, it highlights the potential concerns surrounding technology implementation in stores, issues associated with a depleted workforce, and the need to find a balance between online and in-store sales channels.
Even before the pandemic, much of the retail landscape was desperate for essential digital transformation and technological innovation to address perpetual areas of concern. SML’s research highlights areas such as the lack of stock visibility, ongoing labour shortages, balancing offline and in-store demand, and concerns around technological advancement as the most prominent current issues within retail.
Stock Visibility Issues
SML’s report found that 48% of UK and US retail decision-makers see out of stock items as the primary challenge for retailers in the current climate. While a short-term fix of revamping online channels allowed retailers to stay afloat during the pandemic, the research shows that issues in back-end processes still remain. The long-term implication of frequently out of stock items is the deterioration of customer loyalty and the risk that a customer may decide not to return to a certain retailer because of unreliability.
SML also found that nearly a quarter (24%) of respondents see an unclear view of inventory as their biggest concern when serving customers, with 21% also claiming that it takes too long to locate items in-store. Having a clearer view of current inventory and products that are waiting in the supply chain will enable retailers to ensure they have the right items when their customers want them. Providing excellent customer service is essential to forming brand loyalty but nothing deters consumers more than when a retailer’s stated inventory doesn’t match a customer’s actual experience and a wasted trip to the store or a cancelled order is the result.
Retail Bouncing Back
The retail sector finds itself in an extremely delicate position. Retailers understand the benefits of an omnichannel solution and innovative technology. However, concerns surrounding the initial implementation can cause ‘paralysis by analysis’ as retailers attempt to work through various solutions to find a way forward. With a depleted workforce, retailers need to streamline their inventory management, freeing up staff’s time to offer enhanced customer service. Item-level RFID technology facilitates ease of use and efficiency in both channels. Retailers can remain agile and offer more options to an ever-changing consumer landscape, ensuring long-term business sustainability and success.
Driven by technology such as item-level RFID, retailers that had implemented the technology and accompanying solutions were able to recover and strive forward rapidly compared to competitors that had not adopted the technology. Retailers that fail to address their underlying inventory discrepancies and their impact on omnichannel selling will face the prospect of falling further behind, one cancelled order and disappointed customer at a time.
While the past two years have been challenging, there have been critical lessons learned that can be leveraged for future growth and profitability. Sentiments around the prospect of growth are high, and retailers have identified pre-pandemic processes that can be adapted and refined to better align with a true omnichannel vision that allows each unique channel to drive customer engagement. Accurate real-time inventory visibility is the foundation for omnichannel selling and an enhanced customer experience on the journey forward.