What Do New Retail Apps Mean for Retail Inventories?
Nordstrom is adding to its retail technology with the acquisition of two mobile apps. One will give store associates the ability to send personalized product recommendations to consumers when they’re out of the store, as well as the potential for consumers to share information with each other and shop online as a group. The other app sends customers personalized text messages that allow them to purchase via the text message.
These apps are part of Nordstrom’s effort to build on its reputation for a personalized shopping experience, a corporate value that dates back to the retailer’s earliest years. Similar apps are likely to be adopted by other retailers wanting to strengthen their customer relationships.
Collectively, such retail-relationship apps will have an impact on inventory management. When customers respond to a shopping opportunity en masse, at the speed of technology, retailers must have sufficient stock on hand to meet demand. Otherwise they risk disappointing their customers and undermining the very same relationships they’re building with their shopping apps. Inventory technology, especially RFID, will be vital to fulfilling the demand created by these apps.
From automotive jobber to specialty boutique to major department store, retailers have been using RFID inventory management in some degree since the early 2000’s. RFID inventory systems allow retailers to balance the tension between two inventory principles: (1) keeping sufficient inventory on hand for current demand, and (2) maintaining excessive storage capacity as inventory and demand fluctuate.
Even with the advances in RFID inventory management, predicting future demand has always been an educated guess, putting retailers in a reactive position to market demands. But with the new retail-relationship apps, retailers can become more proactive. As customers react to store associates’ suggestions, retailers can aggregate the responses to predict demand and refine their JIT orders. If a product seems like a hot buy, retailers can stock up in readiness for demand. If a product doesn’t garner much buzz, retailers can avoid overstocking and the storage costs that come with it.
The next step for retail technology may be linking customer-outreach apps to inventory management technology, creating an end-to-end system that ensures sufficient stock without an oversupply of warehouse or in-store storage capacity. This means that retailers who are considering acquiring or expanding RFID technology should choose a future-proof system that can accommodate new technology developments as they come on line. Talk to your storage consultant to find out what RFID system is best for your enterprise.
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