Guest Column | December 12, 2022

Turning Brick And Mortar Stores Into A Competitive Advantage

By Dean Frew, SML Group


New technologies and business models are prioritizing internet sales channels in retail, but hybrid models that incorporate the advantages of physical storefronts are the best methods for meeting the modern expectations of customers. As a result of altered consumer behavior, retailers who can provide high levels of customer service and reduced fulfillment times including same-day delivery or pickup have a competitive advantage. Post-pandemic, businesses that successfully implemented an omni-channel experience gained an edge over those who rely solely on physical or online storefronts. Customers value an authentic shopping experience, which is why it’s more important than ever to leverage existing brick-and-mortar stores as shoppers return to the high street.

Despite the pandemic accelerating the growth of eCommerce exponentially, on average three-quarters of shopping still takes place in physical stores. Customers have begun to purchase in-store as a result of new consumer behaviors like BOPIS (Buy Online Pickup In-Store) and BORIS (Buy Online Return In-Store), and this is where RFID technology allows retailers to thrive. Employing this technology benefits both sales channels, enhancing the overall omni-channel experience and increasing overall sales as a result.

Importance Of Brick-And-Mortar Stores

Adopting innovative technology, such as RFID, removes the need for manual inventory counts, allowing retail staff additional time to focus on providing improved customer service. When staff are assisting customers, their service translates into improved sales, increases in average basket size, and growth in customer loyalty. Donald A. Adams, then President of Rotary International, summarized this well saying: “Service is something more than selling and making delivery according to the contract. To give real service you must add something which cannot be bought or measured with money and that thing is sincerity and integrity.”  This connection with customers is key to differentiating a retail brand from its competitors.

A Shift From Single-Channel To Multi-Channel Retailing

Through omni-channel retail, merchants aim to provide customers with a seamless experience regardless of whether a customer purchases something from a physical store or online. The implementation of omni-channel retail can be complicated for many but is simplified by the introduction of RFID technology as this technology drastically increases supply chain visibility and inventory accuracy.

By switching from barcodes to an RFID system, retailers can now conduct stock counts regularly with an increased inventory accuracy between 93%-99%. Inventory was typically only taken once or twice a year without RFID, resulting in stock accuracy between 65% - 75%. However, RFID technology makes it possible for real-time inventory and location data to move smoothly from the supplier to the customer and back again. By establishing a way to precisely track inventory, retailers can prevent out-of-stock scenarios, boost customer confidence, and enhance sales. RFID also aids in the omni-channel order-picking process by utilizing the technology to locate items quickly with advanced search features which reduces order fulfillment times and saves labor as store associates spend less time looking for items.

Democratization Of Technology

As the world continues to change in the wake of the pandemic, RFID technology has a vital role to play in enhancing the in-person shopping experience and enabling omni-channel experiences. It is not only online companies that can track customer purchases and preferences, but retailers in physical stores can also achieve this as well through the use of RFID tags.

With RFID technology, retailers are empowered to track inventory, avoid manual scanning, and implement a tagging system at the item level to further ensure stock accuracy. This is important because retailers who implement more omni-channel experiences are more likely to gain a higher return on investment (ROI) compared to those who have paired RFID technology with fewer omni-channel experiences.

Brick And Mortar Stores Are Here To Stay

New technologies and innovations have driven consumers online toward digital sales channels. However, the age of eCommerce also has shown that brick-and-mortar stores can be leveraged to drive same-day purchases, experience-driven sales, and the reduction of last-mile shipping costs. RFID technology benefits retailers in a physical store environment with a myriad of use cases ranging from stock counting, operational improvements, asset protection, and customer experience initiatives. The investments retailers have made in physical storefronts can be elevated with modern RFID technology to meet the needs of modern consumers and drive a variety of profitable sales streams.

About The Author

Dean Frew is CTO & SVP of RFID Solutions at SML Group.