While South African retailers grapple with rising shrinkage, supply chain disruptions and relentless margin pressure, they’re bleeding billions through a problem so ordinary it’s become invisible: they simply don’t know where their stock is.
Picture this: A customer walks into your Sandton store looking for that popular item they saw on their social media feed. Your system shows three in stock. After a 20-minute search, staff finds nothing. The frustrated customer heads to a competitor.
That item? It might be in your stockroom, mis-shelved or abandoned in a basket. You paid for it and are storing it, yet for the customer, it’s like you don’t have it at all.
This isn’t a technology problem. It’s a survival problem.
“Traditional inventory management methods have about 65%-75% accuracy,” says Stef du Plessis, Managing Director of Osiris Technical Systems. “That means that one in three items may not be where your system expects.”
The cost of inventory distortion – the combination of out of stocks and overstocks – amounts to a staggering $1.7 trillion, or 6.8%, of sales for the worldwide retail industry, according to research and advisory firm IHL. This report defines out of stocks from the consumer perspective: in other words, a consumer who tried to purchase an item and left empty-handed. In an economy where every rand counts, this inefficiency is existential.
“When implemented correctly, RFID solutions can drastically improve inventory accuracy,” adds Du Plessis.
Enabling 98% inventory accuracy
Yoga and sports apparel brand Lululemon enhanced inventory visibility across 500 stores with an RFID solution, ultimately achieving 98% inventory accuracy. This has increased omnichannel sales, enabled on-the-go restocking of shelves with items from the store room, and weekly stock counts that take all of 30 minutes.
“With a UHF RFID solution, you do not need line of sight of the items as you would with a bar code scanner, and you can read multiple tags at once. Newer handheld readers also enable you to locate a specific tag within an area,” explains Du Plessis.
What the numbers don’t tell you
Du Plessis expands on the other benefits of smart inventory solutions:
- Labour efficiency: Research indicates a 10%-15% reduction in inventory-related labour. In a context of rising staff costs for valuable skilled retail workers, this translates to strategic capacity, allowing your team to focus on selling instead of searching.
- Full-price sell-through: Increasing inventory accuracy translates into selling inventory in the right season, avoiding markdowns from finding stock too late.
- Omnichannel reality: Every South African retailer mentions omnichannel, but how many confidently offer click-and-collect or ship from store? True visibility, not just aspiration, makes omnichannel possible.
Osiris Technical Systems: Making transformation real
“Technology only transforms when implemented correctly. At Osiris Technical Systems, we partner with South African businesses for RFID solutions that fit their specific context and needs. Store and stock room layouts, tag characteristics, choice of readers and antennas, and integration with your systems are some of the factors that play into the success of your solution. Relying on our expertise means that lost sales, wasted labour, frustrated customers and missed opportunities do not have to be part of your retail operations,” concludes Du Plessis.
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