Keeping Count

While many have likely not heard of radio frequency identification (RFID), it’s likely most consumers are using it now. For instance, the newer ‘tap’ credit card feature — the one that allows you to skip the fuss of inserting your card into the credit card reader — is a more recent example of RFID technology. Datascan’s Vice President of Technology Strategy, Herb Billings, explained the current and future use of RFID technology to host of Herb’s Hot Takes, Tyler Kern, in part one of this five-part podcast series.

RFID is a “chip with a globally unique identifier in it and an antenna that can be read using radio waves.” While this technology may appear new, its origins start in WWII.

First developed by the British to help them distinguish friend and foe airplanes, it was later adopted for electronic article surveillance seeing much commercial success. Now in the modern age, RFID technology is found in everyday conveniences, like hotel door locks and vehicle toll tags, and many industries, including agriculture and retail.

There are two main types of RFID: active and passive. With active RFID, there is a power source, such as a battery, that delivers a longer read range. Conversely, passive RFID has no power source, causing a shorter read range.

Datascan understands the potential for this technology to continue growing, and retailers look to RFID to help improve their inventory management tasks, customer experience, and bottom line.

Given the future of this technology, Billings announced: “We are very excited to announce a partnership… with Frequentiel, Europe’s premier RFID company. They have a system called Octoplus, which is an industry-leading platform that we are marrying with our deep retail experience.”

Find more information about RFID by tuning into the series, visiting Datascan’s website, or connecting with Herb Billings on LinkedIn.

While many have likely not heard of radio frequency identification (RFID), it’s likely most consumers are using it now. For instance, the newer ‘tap’ credit card feature — the one that allows you to skip the fuss of inserting your card into the credit card reader — is a more recent example of RFID technology. Datascan’s Vice President of Technology Strategy, Herb Billings, explained the current and future use of RFID technology to host of Herb’s Hot Takes, Tyler Kern, in part one of this five-part podcast series.

RFID is a “chip with a globally unique identifier in it and an antenna that can be read using radio waves.” While this technology may appear new, its origins start in WWII.

First developed by the British to help them distinguish friend and foe airplanes, it was later adopted for electronic article surveillance seeing much commercial success. Now in the modern age, RFID technology is found in everyday conveniences, like hotel door locks and vehicle toll tags, and many industries, including agriculture and retail.

There are two main types of RFID: active and passive. With active RFID, there is a power source, such as a battery, that delivers a longer read range. Conversely, passive RFID has no power source, causing a shorter read range.

Datascan understands the potential for this technology to continue growing, and retailers look to RFID to help improve their inventory management tasks, customer experience, and bottom line.

Given the future of this technology, Billings announced: “We are very excited to announce a partnership… with Frequentiel, Europe’s premier RFID company. They have a system called Octoplus, which is an industry-leading platform that we are marrying with our deep retail experience.”

Find more information about RFID by tuning into the series, visiting Datascan’s website, or connecting with Herb Billings on LinkedIn.

Finishing up the series on retail returns, Herb’s Hot Takes looks at strategies to minimize returns in the first place. Herb Billings, Vice President Technology Strategy at Datascan, shared his insights.

Billings explained, “You want to decrease the likelihood of returns but not by making it a hard process. One way to address this is by considering that 65% of returns are actually the retailers’ fault.

There are several ways for retailers to improve the process. “Gather as much data as you can to find out why returns occur, study the results, and identify priorities,” Billings remarked.

In looking at the process, companies need to consider the phases of an item’s life and what can go wrong. It could be a design flaw, substandard material, workmanship, or supply chain issues. “The shipment to the customer can wrong as well, either by damage or picking the wrong item,” Billings added. 

Many of those things are controllable with better processes, but they aren’t the only return triggers. As previously discussed, fit, feel, and color are leading reasons for returns. “Over describe the product; nothing’s too small a detail. A description may say machine washable, but the tag says only in cold and do not tumble dry.”

This lack of information could cause a return. Other aspects of the product page are critical, too, such as reviews and questions and answers. 

Pictures, of course, are vital. “Pictures from every angle are helpful, as are short video clips,” Billings noted. 

Technology is also playing a role in minimizing returns, according to Billings. “AR and VR are really going to benefit retailers. You can use AR to place a piece of furniture in your room or apply makeup to your virtual image.”

Another key technology is that around fit. “New technologies are helping consumers find better fit through measurement since there’s no true standard.”

Continuing the discussion on returns, Herb’s Hot Takes focuses on best practices for retailers when it comes to returns, featuring Herb Billings, Vice President Technology Strategy at Datascan. 

Free and easy returns are now the norms, and Billings notes, “Retailers need to consider them as part of the purchase process, not something separate.”

The return policy of a store, if done well, can win the company a customer for life. If not, they’ll shop somewhere else.

So, what’s the best customer-centric approach to returns? Billings explained, “First, it’s important to say that two-thirds of online shoppers research return policies before purchasing. It needs to be easy to read and obvious. It also should be easy to find through the navigation of the website and app.”

Billings urged retailers to make it as painless as possible. “Include a prepaid shipping label for returns where appropriate. You also want to gather as much information as you can to improve the process but make it easy for the consumer.”

As far as where customers should be able to return, it’s all about convenience. “It’s whatever is the easiest for them, which could be shipping it back or returning it to a physical location, even if the item isn’t sold there,” Billings added.

Next, they discussed the impact of the pandemic on returns. “The process is longer because items must be cleaned. Contactless returns are more popular now, too.”

Retailers have the opportunity to make or break customer relationships with returns. “Your best shoppers are often ones with high return rates, so treat them well. If you attempt to minimize returns, you’ll also minimize your customers. For those returning items in-store, it’s a chance to convert an online buyer.”

In the second episode of Herb’s Hot Takes on Returns, Herb Billings, vice president of technology strategy at Datascan, talks about the what happens to merchandise after the return. 

“About 25 percent of all returned items are thrown away, representing five billion pounds annually in the U.S. That has an environmental impact, and it’s a waste of resources,” Billings explained.

So, why would a retailer throw away perfectly good items? According to Billings, it’s simply a matter of numbers: “When the cost to restock is greater than expected profit… they toss it.” 

Another avenue for returns is donation or incineration, which covers about 10 percent. Donation is a great outcome, but why incinerate? “High-end luxury brands don’t want to donate or throw away goods because it can degrade the brand, so incinerating makes more sense,” Billings said. 

So, what about the rest? Those items do make it back to the shelf in one way or another. Billings shared examples like restocking of tools or hardware at home improvement stores. He also noted that 70 percent of high-end apparel goes back for resale. 

The logistics of returns do pose a high cost for retailers. For those with brick-and-mortar stores, they prefer in-store returns. For those without, many have partnerships with brands that have physical stores, like Kohl's and Amazon. 

The last possible channel for returns is liquidation. “Amazon has its warehouse. Walmart sells returned electronics online. There are also smaller resellers that take these returns and sell them on eBay or Amazon Marketplace,” Billings added.

Retailers are dealing with more returns than ever before. In fact, retailers can lose up to one-third of revenue due to returns. In this first episode of a new series of Herb’s Hot Takes on returns, Herb Billings, Vice President Technology Strategy at Datascan, provides the audience an overview of the current problem. 

“Before online shopping, there were strict return policies to prevent or discourage them because they cost money. Online shopping changed all of that, and the quantity and cost increase every year,” Billings explained.

This issue is most prominent in apparel and footwear relating to fit. “70% of U.S. shoppers returned at least one item last holiday season because of fit,” Billings noted.

Along with fit, other common return reasons are feel and color. “What retailers are now realizing is that home is the new fitting room. Descriptions are often incomplete or misleading, and what does ‘soft’ actually mean?”

Looking at the problem from a macro-level, Billings cited the NRF annual study on returns. “U.S. consumers returned $428 billion in merchandise, representing 10% of all retail sales in 2020. For online, the percentage was 18. For apparel and footwear, it can be 30-40%.”

However, retailers must be able to make it easy for customers to return due to fierce competition. Billings explained that Zappos was a pioneer here. “They came out with free returns and including the return label in the box.”

Ultimately, consumers do pay the bill for this with increased costs for products. In future episodes, Billings will share strategies to minimize returns and best practices for retailers.

On this episode of Keeping Count, a podcast from the experts at Datascan, Host Tyler Kern talked with Gerry Meca, Chief Information Officer at Datascan. They talked about some of the trends in the industry and what they will look like moving forward.

Meca joined Datascan as VP and Chief Information Officer in March 2020. He previously worked with Dr. Pepper and some other companies and has seen firsthand the importance of inventory management. At Dr. Pepper, he got experience with Datascan technology and what goes into keeping track in a warehouse. He also got a behind-the-scenes look at what goes into inventory in retail environments.

When it comes to inventory at Datascan, one thing is paramount: “This may come as a surprise, but it’s all about accuracy,” Meca said. “The philosophy that we have is all about providing a retailer an easy-to-use, flawless device and software application for counting the inventory quickly and giving them immediate feedback on how well the store is post-count.”

Datascan is also looking to the future. With their technology and software, they want to tell how a store will do when they do the count. As part of this philosophy, they believe that stores should be counting their inventory with their own people.

“They count on them for cash, cash registers, credit cards, and other somewhat trusting aspects of the business, and yet inventory management sometimes falls to a third-party,” Meca said.

If you were told there would be no math, that’s a shame – because there’s a formulaic approach to ensuring your retail organization has accurate inventory records and is making the most of your opportunity to boost that bottom line.

To discuss retail inventory record accuracy and the formula you can use to calculate it, Herb Billings, Vice President, Technology Strategy at Datascan, is back alongside host Tyler Kern for another episode of Herb’s Hot Takes.

Many retailers are aware of inventory accuracy percentage – but it doesn’t tell the entire story. It can be misleading, because, as time increases between counts, system records become less and less accurate.

A monthly degradation percentage, then, can give retailers a clearer picture and equalize the timeframe between counts, delivering more actionable insights.

You calculate that monthly degradation by taking the inventory inaccuracy percentage (100% – inventory accuracy %) and dividing by the number of months since the previous count. Datascan gets a standardized month by dividing the number of days between counts by 365, then multiplying by 12.

While this method still isn’t perfect, as many factors impact the actual level of inventory accuracy, this monthly approach can help retailers be more informed between counts.

Herb Billings, Vice President, Technology Strategy at Datascan, is back alongside host Tyler Kern for another episode of Herb’s Hot Takes – this time diving into the measurable negative effects organizations can experience when they exhibit poor inventory accuracy.

Every retailer the world over is affected by inventory accuracy either positively or negatively. As we learned in the first episode of Herb’s Hot Takes, those retailers that pay close attention to their inventory and conduct accurate counts can realize significant bottom-line benefits.

However, the opposite is also true. There are five clear impacts of poor inventory accuracy – lost sales, lost customers, increased inventory costs, wasted labor and lower employee morale.

This is especially true in an age where omnichannel strategies are becoming more critical every day. Traditionally, retailers would either have an item or not, and they could potentially call another location to verify that an item is in stock for a customer to pick up there.

This manual verification hid the actual inaccuracies behind the scenes of many retailers – inaccuracies that the omnichannel world of today is exposing in droves.

Retailers can respond, but it takes a greater commitment to inventory accuracy and to leveraging data in a more insightful way to make it happen.