How RFID is Helping Retailers See Labor Differently in the New Era of Omnichannel and BOPIS

WHITEPAPER
How RFID is Helping
Retailers See Labor
Differently in the New Era
of Omnichannel and BOPIS

Maintaining an accurate inventory is the key foundational piece to maintaining a profitable sales floor and enabling
omnichannel sales strategies such as BOPIS and SFS. When on hand inventory is correct, it allows for retail operation
efficiencies that reduce labor cost and maximize sales opportunities across multiple channels. Payroll is consistently the
highest controllable expense within the four walls of a retail store and inventory accuracy can either accelerate sales or create
roadblocks that lead to additional payroll expenses. RFID enabled item-level inventory impacts every area of store operations
by reducing unproductive hours, removing obstacles for store associates, and providing more effective tools to execute
processes. When real-time visibility and accuracy of inventory at the item level is achieved by a retailer, they are able to thrive
while other retailers are struggling to survive. The new era of retail is about working smarter to shift talent and resources
away from tasks and toward omnichannel experiences including in-store customer interactions and successful implementation
of BOPIS and SFS, while maintaining stated online and store specific product availability. This transition was occurring rapidly
before the COVID-19 pandemic began, but it is now accelerating even faster as consumer behaviors have been permanently
altered and retailers must adapt to remain relevant and profitable.
Buy Online Pick Up in Store
Labor is expended in BOPIS picking regardless of whether the item is located and the sale is fulfilled. The end result is the
differentiator in BOPIS-either a completed sale and a satisfied customer or a missed sale and a customer that has now been
taught they cannot rely on the product availability stated online for a retailer. The labor to fulfill BOPIS orders increases as
associates spend the majority of their time looking for items that are never fulfilled. Many retailers who have identified the
importance of BOPIS are attempting to enhance the process by allocating additional payroll and requiring supervisor or
manager approval before canceling orders. This is an ineffective and unsustainable strategy as it consumes resources and
continues to result in disappointed customers. The root cause of the issue is addressed by providing associates real-time
visibility to an RFID enabled item-level inventory and the ability to utilize the RFID Geiger Counter search feature to quickly
locate BOPIS items to fulfill orders. These advancements lead to reduced BOPIS order cancellations of >15%, improved labor
efficiency of >20%, and improved BOPIS customer satisfaction of >30%.
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© 2021 SML RFID is a division of SML Group Limited
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Customer Service
High customer service levels are only possible when associates are freed up to engage customers and drive sales and
service. Inventory and logistical issues consume resources and talented employees are consistently directed away from
providing quality service in order to mitigate issues caused by incorrect inventory levels. Searching unsuccessfully for the
product, communicating with disappointed customers, and remerchandising due to excessive inventory distracts from the
mission of retail stores to increase top line sales and profitability. When store locations struggle to process freight, complete
merchandising sets, and fulfill omnichannel orders within their designated payroll allocations, the hours earmarked for selling
and customer service are reduced first to bring payroll back into line. When a retailer frees up its employees to focus on the
customer instead of white knuckling inventory related issues, they can bring the company’s service vision to life and provide a
differentiated experience to stand out from the competition. Successfully implemented item-level RFID rollouts supported by
SML are generating sales lifts of 3% as a result.
Logistics and Replenishment
When a retailer has an accurate picture of their inventory, it allows for efficient product replenishment as stores receive items
in the correct quantities at the time they are needed. Labor costs increase when there is an understatement of an item’s
inventory and a store is replenished with excess product. Replenishment associates attempt to stock these items only to find
the sales floor at capacity and then must handle the product a second time to add it to backstock. RFID enabled inventory
tracking helps to prevent labor costs associated with excessive on-hands and limits out-of-stocks on the sales floor creating
missed sales opportunities. Accurate inventory sets the stage for synchronizing the sales floor on-hands and what is available
for replenishment in backstock. Best-in-class replenishment features on SML’s proprietary Clarity® software empowers
retailers to quickly move needed products to the floor to fulfill sales demands and the ability to perform closed box receiving
that is >99.8% accurate saves labor costs and maintains accurate inventory. Clarity® replenishment features helped drive
10% lower replenishment costs according to a case study from a major retailer who had implemented the software.
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© 2021 SML RFID is a division of SML Group Limited
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Merchandising and Markdowns
Excessive out of season inventory from previous sets creates merchandising challenges for store associates as labor is
expended to move products multiple times to maintain sales floor presentation. This also prevents the optimum leveraging
of sales floor space as seasonally relevant, and currently marketed product sets are delayed or are merchandised into cramped
spaces to compete with markdown and clearance products from previous sets. The solution is a new product that arrives
just in time to fixture on the sales floor with older products cycling out in manageable quantities. Item-level RFID inventory
allows retailers to reduce in store inventory by >10%, which reduces labor costs related to markdowns and streamlines
merchandising execution in stores as floor space utilization improves and prime merchandising space is freed up to drive
improved margins. RFID enabled intelligent markdown functionality on Clarity® delivers a staggering 100% reduction in labor
on markdowns as items are quickly located using the Geiger search feature, associates work from an active promotional list
that is displayed, and the ability to connect to a wireless printer allows for on the spot ticketing to reduce footsteps.
Point of Sale
RFID technology improves speed and accuracy at point of sale allowing retailers to process the same volume of items through
registers with reduced staffing and labor costs. Traditional barcode scanning at point of sale leads to discrepancies caused by
unscanned items and hand keying incorrect item numbers and quantities. Those errors ultimately impact labor usage on the
sales floor as challenges with compounding inventory inaccuracy are experienced by associates executing operational tasks.
Additionally, the transition of retailers to self-checkout technology is a perfect match with RFID as the process is faster, more
accurate, and reduces friction for customers who no longer must scan items as part of the self-checkout experience. The
leveraging of RFID at the point of sale allows retailers to reallocate labor to drive sales, operations, and customer service on
the sales floor and make an impression at the store’s last touchpoint.
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© 2021 SML RFID is a division of SML Group Limited
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SML RFID
LEADS THE
NEW ERA IN
RETAILING
About SML
SML is a leading technology provider for this New Era in Retailing. As the full-service RFID solution provider and trusted
partner to the world's largest retailers and fashion brands, delivering proven results and rapid ROI's. SML offers the industry
a broad spectrum of cost-effective high performance certified RFID Inspire tags and a global network of encoding solutions
to enterprise-class RFID software Clarity® for retail stores throughout the supply chain.
With a presence in over 30 countries, SML is the #1 item-level RFID software provider in the world and has the largest global
network of source-tagging service bureaus that enables it to be the leading technology provider – making solutions impactful,
scalable and simple.
SML RFID @SMLRFID www.sml-rfid.com
info@SML-RFID.com
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© 2021 SML RFID is a division of SML Group Limited
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