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Overcoming retail challenges with smart inventory management

Overcoming retail challenges with smart inventory management
The retail sector faces many challenges when it comes to implementing smart inventory management, ranging from cost to resistance to change.
Implementing new technologies always comes with its challenges — this is no different in the retail sector. Nowadays retailers face new challenges. Among these are dealing with growing demand and the dynamic nature of product movement.

Other challenges originate from the side of operation and logistics. Sergio Ramos Jubierre, Stockbot Product Manager and Head of Retail at Pal Robotics highlighted scalability, tracking, automation and reporting as some of the biggest difficulties that need to be tackled. Additionally, speed of delivery is a problem encountered by both customers and retailers.

Challenges with RFID in retail

Jubierre pointed to RFID technologies as a compelling solution for the retail industry. In addition to RFID tags, the fast-moving consumer goods (FMCG) sector has adopted barcodes. “Due to the low margin in the FMCG sector barcodes are the preferable choice for food retailers,” he said.

The cost of RFID tags is most definitely a barrier to adoption for certain smart inventory management solutions, as is the cost of the technology needed to read the tags and collect the data. However, the price of RFID tags is dropping and will continue to do so with the projected growth in volume.

“Metal and liquid-filled items will benefit from newer tag designs,” explained Harley Feldman, Co-Founder and CMO of Seeonic. The number of manufacturers adding RFID tags to their products will also continue to grow as more and more retailers demand the tags be added.

“Since it is more efficient to add RFID tags to all items, the cost of tagging may go up, but it provides the ability for retailers new to RFID to add the technology more easily,” Feldman said. He explained that automatically collecting RFID data is desired, but the cost to do so is still high. As a result, most retailers still use handheld RFID scanners to collect real-time inventory as they are flexible, inexpensive and readily available. Unfortunately, handheld scanners require a person to use it resulting in labor costs.

Challenges with smart shelves

In regard to using smart shelves for inventory management, it can be costly since the retailer may have to replace its existing shelving to incorporate new sensing devices. Don Taylor, VP of Business Development at Newave Sensor Solutions explained how in many cases Newave’s Smart Shelf can retro-fit to existing shelving to reduce the cost of installation. In fact, Newave’s Smart Shelf solution has helped retailers reduce out-of-stocks by 60 percent in the first few months after installation.

To achieve accurate information on smart shelves, Taylor noted the retailer needs to already have some disciplines in place. Newave requires a product planogram, so that they can monitor and track every SKU. “Retailers need data to be able to determine if they have achieved a positive ROI on their new technology investment. Newave can provide real-time information to any authorized smart device on out-of-stocks, low inventories and missed sales to name just a few categories that will assist the retailer in formulating an ROI,” Taylor said. According to Newave, its technology will deliver a positive ROI in less than a year.

Championing new technologies

In order for more smart inventory management solutions to be adopted, it is important that retailers are educated on the benefits of these new technologies. Oftentimes it is the lack of education on new technology, not understanding how it works, how it can benefit a business, that keeps them from adopting smart solutions. Retailers need an internal champion to drive new technologies through their stores. By providing proper training to retailers, they will have the knowledge needed to understand and push for new smart technologies.

Product Adopted:
Retail, Retail
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