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Why Merchandise Visibility Is Especially Critical Now

A number of issues are exacerbating the challenges retailers face, and the need to respond now. Among these are the following:

Declining consumer spending
When consumers walk into a store, retailers have only one chance to make the sale. And with retail sales in a serious slump, there are serious consequences when desired products (correct style, color and size) aren’t in stock.

  • Short term, a retailer may lose a sale on desired items plus ancillary items.
  • Longer term, consumers may choose to shop elsewhere.

Increasing cost of capital
With the rising cost of capital, retailers are increasingly cutting inventory to control costs and maintain margins. At the same time, they must ensure the right inventory is on the shelf when the customer is ready, and must also manage inventory with greater accuracy.

This is possible only with higher inventory turns and faster demand-driven replenishment, and by carrying less safety stock.

Reducing investment in staff
To cope with the declining profits, retailers have been slashing labor costs by reducing and eliminating store associates and distribution center staff. This results in fewer resources to monitor and manage inventory levels and replenishment.

Retailers relying on manual processes to identify and count items coming into stores and on shelves increasingly face challenges when fewer resources are available, leading to increased inaccuracies in the supply chain.

“About 60% of our business is derived from replenishment. Our customer expects us to be in stock on the white, non-iron, button-collar dress shirt in 16 34/35 whenever he walks in the door”.

- Executive Vice President, $800M apparel retailer

Increasing incidence of theft
With fewer store associates and increasing economic pressures on consumers in a challenging economy, theft rates tend to rise.

Need to differentiate
With limited sales and increased competition, retailers need to change the way they do business to differentiate themselves from the competition. One of the best ways to achieve this is to deploy new technologies to increase process efficiencies.

Barcode - Passive RFID - Active RFID - Ultra Wide Band RF (UWB) - Wi-Fi - RTLS - RFID-enhanced EAS - Location Servers - GPS - Application Sensors (e.g. Stack Lights, PLCs, alarms...)