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Distance or Demand - no longer an issue in the selling of Fashion Articles

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.

Webshop girl

A shared stock in the DC

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 portfolio

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.

2 comments on “Distance or Demand - no longer an issue in the selling of Fashion Articles”

  1. Gravatar of Hanna ÖstmnaHanna Östmna
    Posted 23 February 2012 at 12:17:39

    RFID, online shopping and joint stocks at DC are excellent for fashion retailers, of course, but as an eager fashion shopper and an inhabitant of the "distance-rich" Scandinavia, this is really great for me too! :) Great blog post, Jessica!

  2. Posted 12 March 2012 at 10:09:38

    Jessica will be giving a great Pecha Kucha Presentation on Multichannel sales at RBTE 2012 at Earl's Court! You have got to come and listen to it. That will be so full on! :)

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