Like-for-like retail sales were 5.2% higher on the year, similar to previous months. Credit: Peter Cade at Getty Images

As retailers consider whether to divest store portfolios amid rising overhead costs, multichannel retailers must offer a homogenised experience across channels to entice customers back to stores. To reduce the pain points of offline customer journeys and replicate the conveniences of e-commerce, investment in RFID (radio frequency identification) technology must be at the forefront of omnichannel stock strategy to evolve physical retail spaces.

RFID enables retailers to produce real-time snapshots of inventory and to analyse SKU (stock-keeping unit)-level performance and customer purchase history. Using RFID-enabled product labels, cloud technology and quick scan devices, customer assistants can identify and count an average of 10,000 items in one hour. SKU availability can then be shared with online customers browsing in real time and can lead to greater accuracy from allocations.

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By decreasing the manual labour required to monitor store stock levels, staff can be freed up to provide knowledgeable customer service, replenish gaps and upsell available stock held in the stores. As in-store shopping is increasingly regarded with disdain due to poor range and size availability compared to online, RFID emboldens customers to make physical store visits as part of their buying journey and reduces costs on the retailer as a result of inaccurate stock files.

Despite awareness by retailers that decisions based on ambiguous stock visibility can eat into profit margins, investment into this technology is unlikely to be the top priority for 2023-24 as many continue to face operating constraints due to turbulent economic conditions. RFID technology, however, can aid retailers in strengthening profit margins in the long term.

For the River Island clothing company, RFID technology increased average stock availability from 72% to 97% across stores within two weeks. The technology is increasingly accessible to implement in staff training, applied to a growing breadth of products and has reduced set-up costs. From the improved availability of products, River Island broke even on its RFID set-up costs.

For the long term, RFID technology in stores provides the building blocks to create agile stock packages forecasted from enhanced sales data to reduce obsolete stock and markdowns, build greater loyalty with customers through engaged customer assistants and achieve increased sales through consistent stock availability.

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The sustained success of RFID technology will rely on retailers’ ability to convert new and existing online shoppers into physical locations. Click and Collect and in-store stock checker services can utilise RFID’s real-time data to offer customers same-day pick-up. 43.8% of UK online shoppers stated they have used, or will continue to use, stock-checking functions in 2022, and a further 21.5% reported they intend to adopt this function in future while shopping online, according to GlobalData’s e-retail 2022 survey of 10,000 respondents.

To retain engagement with physical retail spaces, customers must be able to move fluidly in their purchasing journey across channels, as such stores will need to evolve into secondary fulfilment centres capable of delivering, processing and returning purchases. RFID will be central to achieving this potential in physical stores in the future, combining the seamless convenience of online into physical retail spaces.

Retailers can harness the USP of stores to express brand aesthetics and values and provide human interaction whilst creating flexible but robust stock management processes to boost profit margins.