Are you caught in a discounting spiral? Feel like you're launching a mega sale almost every month? If you said 'yes,' you're not alone. According to leading UK retail authority Drapers, fashion brands now offer bigger discounts on more products for longer. And the BRC-NielsenIQ Shop Price Index experts think the 'deep discounting' trend will continue as brands struggle to shift excess stock.
If all this sounds achingly familiar, don’t fret — there’s help at hand! Our experts have a solution that’ll help you regain control of your product discounting so you can strategically deploy sales to boost revenue and footfall. But before we reveal the answer, we need to dig into the problem…
What is the problem with discounting?
You could become a ‘discount brand’
There are two downsides to being perceived as a ‘discount brand’ when you aren’t one. The first is customer disinterest — if you’re forever running sales and promotions, there’s less ‘wow’ factor for customers and they’ll stop rushing to buy. Secondly, you risk tanking the perceived value of your products and brand. Stuff that’s always marked down could be considered faulty, less desirable, or low value by shoppers.
You earn less from your stock
In an ideal world, you'd sell everything in your stockroom at full price. Unfortunately, this is far from reality for many retailers. No matter how famous the brand is, there's always stock that doesn’t quite move. It may feel like your only option is to discount it, make the sale, release some of the capital, and chip into your bottom line.
Messes with cash flow and forecasting
Without accurate data on sales trends for your retail touchpoints, you're forced to guess which stock volumes and lines to order. If the 'retail gods' aren't looking on you with favor (because it is a dark art), you could end up lumbered with deadstock, storage costs, and a future filled with discount stickers. It messes with your cash flow, throws your forecasting off, and is an all-around bad time.
…enter RFID technology
RFID technology is one of your ultimate allies in the fight against over-ordering, under-selling, and excessive product discounting. By attaching encoded RFID inlays to each item, you'll get valuable (and accurate!) sales and stock data on your products, locations, and volumes.
Data is your ultimate weapon in the quest for better retail practices, as we all know, and there is nothing quite like the level of detail you’ll get with RFID. And you don't have to imagine what information like that could do for your bottom line…because we're about to tell you.
Smarter product discounting with RFID labels
1. Less capital tied up in stock
How much capital do you have tied up in excess stock right now? McKinsey recently reported that retailers in the United States alone are sitting on $740 billion in unsold inventory due to the pandemic, economic downturn, and supply chain issues. Luckily, RFID might save you the headache going forward.
RFID could make it easier to quickly pinpoint bestsellers by size, color, and location using sales data you’ve gathered across all your touchpoints. This makes it waaay easier to avoid stockouts, allocate more smartly, keep ordering under control, and earn more from the stock you do have. Everyone wins!
2. Powerful stock accuracy and inventory transparency
RFID puts the power back in your hands by giving you accurate stock volumes (up to 99% accuracy, dontcha know?!) and unbelievable inventory transparency. That means you know exactly where your stock is at any point in the supply chain. With supreme knowledge like that, you can confidently fulfill orders, respond to sales trends and hook customers up with the item they’re looking for, no matter where it is.
3. Organize sales to suit your customers
Discounts aren’t the devil. Not when they’re deployed as wicked-smart sales strategies. They lure customers through the door, push AOV up, and give your revenue a healthy boost.
RFID intelligent labels give you the info you need to pick and choose not only when you have a sale but what you discount. When you know your customers’ favorite products and peak shopping times, you can turn your sales into a fab event and plan something they’ll adore. And that’s very exciting indeed.
4. Help over-stocked stores raise cash
Want to help an overburdened store clear stock and raise cash? You don’t need to rely on a sale anymore, friend — not now you have RFID tech on your side. Because it gives you crystal clear transparency over your entire inventory, you can use RFID data to identify over-stocked stores and then use their inventory to fulfill online orders. The store gets a full-price sale added to their bottom line, and the customer gets their garment. Everyone’s happy!
5. Satisfy ‘Zero’ consumers
We are, of course, referring to McKinsey’s research on the next generation of consumer — the ‘zero’ consumer. The TL; DR is that the zero consumer shops fluidly across channels, spends with sustainable brands, wants fast shipping, isn’t loyal, and doesn’t shop in the middle of the market (they either splurge or scrimp).
But you’ve got RFID labels, which means you can service this emerging consumer behavior with laughable ease. Because it gives you total inventory transparency, you’ll have the accuracy needed for an omnichannel model that suits the zero consumers’ fluid shopping habits.
Dual technology labels can help you deliver detailed sustainability info to your customers on the shop floor with a single smartphone scan. And, since they aren’t loyal to brands, you’ll be able to meet both the high and low pricing preferences with strategic sales and well-stocked, well-merchandised, full-price items. If that isn’t supremely satisfying, we don’t know what is!
Are you ready to dominate product discounts? Contact our team to find out how to integrate RFID into your business — we work with you throughout the process (because we’re vertically integrated) so we can tailor the rollout and the solution to suit you. We know the tech inside and out, and we’re happy to share our intel. Just ask!