OPERATIONS

Study: Physical stores need ‘near-perfect’ inventory management

BY Marianne Wilson
Inventory management has emerged as a key factor for operational efficiency within physical stores — and there is almost no room for error in today’s omnichannel marketplace.
That’s one of the findings of a new report from ABI Research, which said that as stores strive to perfect how they serve customers and integrate various shopping and delivery channels, being able to accurately count, control and predict available inventory will become a basic operational requirement.
“Stores which have limited intelligence on the location and quantity of stock at the individual item level cannot expect to adequately serve their customers or successfully execute a competitive omnichannel retail strategy,” said Nick Finill, senior analyst at ABI Research.
The good news is that with computer vision use cases maturing, artificial Intelligence tools becoming more powerful, and RFID technology demonstrating major ROI, retailers are now able to approach 100% inventory accuracy — enabling a transformation of the industry.
For many retailers using traditional inventory counting methods in the apparel, fashion, and soft goods sector, inventory accuracy can drop to around 65%, resulting in a poor experience for shoppers and lost sales, according to the report. Using RFID technology, these retailers can reach near-perfect inventory intelligence at more regular intervals, leading to improved customer satisfaction, reduced shrinkage, and improved sales velocity. In most cases, fashion retailers employing RFID can increase annual revenues by at least 3%.
RFID deployments in the fashion retail sector have demonstrated clear ROI for retailers deploying the technology at scale. ABI Research calculates that an apparel store with annual sales of just under $6 million can realistically achieve a 44% ROI within the first year, with returns increasing to over 200% in the third year.
“The resurgence of RFID as a powerful inventory management tool in fashion retail has been driven by rapidly falling costs and demand for greater end-to-end insight in retail operations,” said Finill. “However, RFID will fail to transform the entire retail market due to its limited viability outside of soft goods and fashion verticals.”
In shelf-based retail environments such as grocery stores, 20 hours of labor per week is spent on average by associates performing stock counts. The automation of these processes, using computer vision, robotics, and AI, promises to save labor costs for retailers, in addition to improving the customer experience and driving sales.
The emergence of easily integrated, cloud-based managed service models has played a major role in the transformation of inventory management. Diverse SaaS inventory solutions offered by disruptors such as Infor, Nedap, Scandit, and BossaNova are helping retailers digitize and automate the entire in-store inventory lifecycle without the need for major capital expenditure, according to ABI.
“In order to remain competitive with e-commerce retailers and other brick-and-mortar rivals, physical stores will soon be adopting IoT and AI-enabled inventory tools as the standard, rather than the exception,” Finill concluded.
These findings are from ABI Research’s Transforming In-Store Inventory Management report.
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Etsy’s top diversity priority is…

BY CSA Staff

Etsy is successfully bucking the trend when it comes to the professional advancement of one of the technology industry’s most under-represented demographics.

The handmade and vintage goods e-commerce retailer reported that women comprise 55% of its employees, and nearly two-thirds of its management team. The company also has achieved gender parity on its board, according got CNBC, which cited the company’s impact report, “Creativity Unleashed.”

In addition, 32% of Etsy’s engineers are women, up from 29% in 2017. Stronger female leadership helps the company to better respond to its buyers and sellers — a majority which are also women, according to the report.

Etsy CEO Josh Silverman told CNBC, “More than half of our leaders are women, so statistically speaking, at least half of the people getting promoted should be women. Having a team that represents the sellers and buyers is really important for us to achieve our business objectives. When you have more diversity of opinion, you end up getting better outcomes.”

To read more, click here.

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Must Do for Retailers: Driving innovation while protecting the enterprise

Brick-and-mortar retailers are standing at a crossroads – the intersection of innovation and security. Amid all the disruption happening in this sector, retailers also face significant security threats from both the cyber sphere and inside their physical stores.

The good news is that retailers don’t have to pick just one road at the expense of another. In fact, they can blaze their own trail by finding a balance between innovation and security. With sharp strategies and today’s security technology, executive decision-makers can have both.

Here are two considerations for retailers looking to strike that balance.

1. Focus on your employee experience – empower them, securely
Smart, well-trained employees are absolutely critical for a successful retailer, but they can quickly become a major security threat. In a 2016 study, the Ponemon Institute found that 68% of insider-related security incidents were caused by careless or negligent employee or contractor actions.

Security executives should take a closer look at their employee experience strategies to ensure that associates have the digital tools they need to succeed while protecting the enterprise at the same time. Enabling them with the right technology will help increase retention, and keep both employees and your customers happy. As such, they should be trained to interact with it in the safest way possible.

Also, in-store applications and processes need to be designed around the way associates work to make them feel empowered. Whether it’s enabling extended aisle for customers or handling transactions at the customer’s side, applications should be created in conjunction with and tested by employees. Simultaneously, security executives need to create guardrails within the applications and processes to protect associates from unintentionally creating a security threat.

The bottom line is this: Retailers won’t succeed by locking down employees and their devices in an attempt to safeguard the network. They’ll win by inspiring associates to engage with intelligent technology, which will help mitigate the chances of a network exposure.

According to the 2018 Cisco Cybersecurity Report, 82% of companies seek more integrated solutions. But how you integrate the technology matters, as multiple vendors can mean vulnerabilities and gaps. To reduce the threat, retailers should be cognizant of not using too many vendors and products in order to reduce complexity.

2. Security is foundational – better understand retail vulnerabilities and protect yourself
The chief security officer role has quickly become one of the most challenging and rapidly changing jobs within a retailer. Why? Because when retailers want to invest in digital technology to innovate, they look to the CSO to make sure it does not expose the company to new security risks.

In fact, the Cisco Cybersecurity as a Growth Advantage report shows that 69% of companies say they are reluctant to innovate if they are not able to mitigate all their cybersecurity risks. But if they include a seat for CSOs at the C-suite table, retailers can ensure they have the necessary platform to discuss the organization’s security requirements while also making the business case for new technology investments.

CSOs know that today’s network security strategy is no longer black-and-white. They can’t simply leave part of the network open while walling off another.

With the retail environment now dynamic in nature, customers and associates need access to resources, as do vendors and business partners. For example, manufacturers that install interactive in-store displays need to access them via the network to update content – opening a potential vulnerability. Or deploying emerging technology such as smart shelves makes it clear that CSOs are dealing with an ever-evolving landscape of potential threats.

To adjust, CSOs’ strategies and the tools they choose to support them are becoming more adaptive and intuitive. The technology exists to monitor the entire web for developing threats and leverage that information to help networks learn to protect themselves. This not only reduces the need for human monitoring and intervention, but also decreases the time required to mitigate a problem.

In our experience, we’ve seen the timeline to resolve an issue condensed from 100 days to one day (or less) because an intuitive network can “self-heal.” Such a network can address a problem like a ransomware attack before it becomes an enterprise-wide crisis.

Retail CSOs can also explore complementing their security strategy with robust services for assessments to receive data regarding specific vulnerabilities. These assessments can help the retail organization better understand options for cybersecurity insurance policies for mitigating losses associated with any potential breaches.

For advanced protection, they will need to consider a wide range of security functions such as next-generation firewalls, intrusion prevention systems (IPS), secure access systems, security analytics and malware defense, to name a few.

Armed with solutions like this, CSOs can effectively partner with the business to ensure innovation comes to retail environments without the cost of reduced security.

Amit Chetal is Americas retail sales lead – digital transformation at Cisco and Derek Dykens is retail business development manager, Americas Industry Solutions Group.

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