Retail logistics is well understood in Scandinavia, a territory of long distances and few people. The few of us inhabit areas that when placed in mainland Europe, would reach from the Netherlands all the way to Southern Italy.
Finnish, Norwegian and Swedish grocery retailers all have
extremely sophisticated logistical organizations that provide food
to the busy capital areas as well as to less inhabited areas in the
North. Everybody gets served, yet perhaps not always with exactly
the same selection. This, is of course, due to the rule of supply
and demand: sometimes there is just not enough demand for something
very special. And those who are in demand of that "something very
special" have now learned to shop for it online.
It has been proven that RFID will revolutionize the way
retailers handle their merchandise. I suggest that it now has the
power to change the distribution of individual items. This should
be especially lucrative when it comes to products that are
considered such trend items that they will only be sold in selected
outlets. Perhaps, in some cases, the new potential online sales can
be the basis for the RFID ROI calculation.
Online sales have been growing for years now and many consider
it an important addition to their offering. However, the online
stores do not necessarily offer the same experience as visiting a
store - for example when the consumer decides that the item was not
the correct size, after all. The fear of having to return the item
alone, could prevent some customers from ordering it online. This
is part of the reason why so many click-and-collect services have
been born: you order online, you pick your order up from the store
nearby and you can still try the item on before you bring it home.
However, this kind of service can be costly, especially if the
store does not hold its own DC.
A shared stock in the
RFID allows a much wider allocation of stock from DC onwards.
Any individual item sold online can be shipped anywhere and easily.
There is no longer the need to allocate separate stock for stores,
online etc, but all can be seen as one. Only the location of an
individual item will change. Typically in Scandinavia the stores
located in Lapland have held less trend items. This no longer
needed. The staff in the store can for example use an iPAD to show
the whole collection to any customer and should the customer have
interest in the product, automatically order the items from the DC.
OR the customer could use a customer service kiosk to browse the
collection and order the item self to be delivered to the store.
Either way, the offering in the store grows tremendously.
Brand stores and expanded
From the point of view of any brand, RFID should offer a
completely new channel with their brand store type resellers. At
least in the Western Europe, many brand stores also hold a web
shop. Typically only a limited amount of items from each brand are
sold in the online store. But what if it was 1) easy to add any
product from any brand and 2) no extra cost in the delivery?
Usually brand stores only choose to promote a part of any brands
offering. When you promote something, it is expected for you to be
able to deliver it as well. Sometimes this means ordering stock
already six months prior to sale and how can a brand store really
predict the demand so early, therefore only the products that are
believed to be "sure hits" will be ordered. How will this change
with RFID then?
Again, the brand owner could hold a common stock for all of its
resellers and with the help of RFID deliver any items on demand.
This means that the brand store would not need to tie up capital to
products they are not sure about (answering to my suggestion #2).
Yet, this leaves the question of how to promote the product: the
answer is cloud based services. If the brands create content to
cloud based services, their partners will easily be able to adapt
such product information to their website. And should the brand
discontinue a product, its information would automatically vanish
from the reseller's website. The benefits from brand's visibility
point of view are so great that I urge all brand owners to at least
consider funding such function for their resellers.
I invite all of our readers to a discussion around this subject
as well as on a visit to Retail Business Technology Expo
in London (March 13-14) where we will also discuss Multi-Channel
Retail and RFID in two "Pecha Kucha" Theater sessions.