In term of the latest benchmark report of RSR, presented by Paula Rosenblum, “The Internet of Things: Identifying REAL Benefits,” 98% of Retail Winners cite “Inventory management across the enterprise” as a key capability. And 45% of those same Retail Winners cite “pressure to cut operational costs” as one of the top-three business challenges.
The report shows that omnichannel fulfillment revolution brings huge space of interests to retail indystry. Specially, hypermarket retailers find their employees wandering in the hypermarket to search the promised products for cilents, either from a digital order or from another store.
One sidelight of omnichannel fulfillment revolution is introducting “BORIS”-shop online, return in store. Return is not a serious problem in traditional retail. The products are returned to the place clients buy them, then, store employees will put the products to storage.
However, the return rate is inreacing quickly with the lasting growth of apparel sales, specially selling online. The report shows that the direct-to-consumer retailers will acuqire the 25-30% of return rate, it is more than triple the return rate of physical store.
And if the return products can be selled easily in a store without any sale, what motivation do store employees deal with the return products and how many retailers have clear processes and incentives?
The combination of poor visibility and lost inventory accuracy not only lead to profit leakage, but also lead to larger working capital requirements and lower turn. The report shows that the most beneficial solution is to create safety inventory by buying more next time to across the enterprise when 30% of your inventory is “somewhere” that you can’t identify.
The “real value” of the IoT is in improving the efficiency and quality of managing stock. An ancillary value of using the IoT to “manage inventory rather than customers” is avoiding privacy problem. It will be the minefield for retailer by using these tracking technologies without explicit permission, although using these technologies can provide personalized serves and make store layouts more efficient.
If retailers gain knowledge of how to best use the IoT and get used to managing a lot of data, they can get ready for the projects in the future