The real cost of inaccurate inventory data
Close enough is not good enough.
The silent killer lurking in your business.
We talk to a lot of retailers. And when we ask them about their biggest operational challenges and pain, one of the most common responses is: “We don’t trust our stock numbers.”
It’s said casually, almost as if it’s simply the way retail works and something they must live with.
But behind that relaxed demeanour lives a very real and very expensive problem: inaccurate inventory data is one of the biggest killers of margin in the retail world.
And it’s a silent killer caused by lack of visibility.
The quiet cost of “close enough”.
Depending on whose figures you believe, estimates suggest that retailers operate with inventory accuracy between 60% and 80%. Somewhere along the way, this became acceptable and normal.
Imagine trusting that level of accuracy in other sectors. What if your bank balance was only 70% accurate? Or if your navigation app only managed to get you where you needed to go 80% of the time?
We would not accept either of those scenarios. Yet retailers are running their businesses with impaired information. Decisions about purchasing, staffing, marketing and fulfilment are being made based on incomplete, out-of-date or flat-out wrong information.
That lack of accuracy shows up everywhere in your business:
- Overstocking because the system under-reports stock levels
- Lost sales because the system over-reports
- Unnecessary reordering of stock hiding somewhere in the business
- Hours wasted hunting for items the system claims to exist
- Disappointed customers when “in stock” turns into “we can’t find it”
All this chips away at your margins, staff morale and customer satisfaction. It’s never an emergency, but like a slow leak in the hull of a ship, eventually it can become catastrophic.
Invisible stock means lost margin
When you can’t see the stock you have already bought and paid for, you don’t have an inventory shortage. You have an inventory visibility issue.
Looked at another way, you have “free stock” sitting in stores and warehouses. These are items you could sell today, except that the system (and therefore staff and customers) can’t find them.
We call it “free stock” because you don’t have to buy more inventory, you just need to locate what you already have on hand.
Every misplaced SKU is a lost sale and a hidden cost.
When barcodes can’t keep up
Barcodes were originally designed for checkout, not for real-time, accurate inventory counts. They require line-of-sight scanning, manual throughput and flawless human workflow, which are hard to achieve in a busy retail environment.
RFID tags have none of these limitations. They don’t need to be seen. They don’t need a perfect, up-close scan. And they don’t rely on staff remembering where items were last seen and spending a lot of time manually checking and double-checking where items are located.
With RFID, thousands of items can be scanned in seconds, with the simple wave of an RFID reader across a store, stock room or shelves.
This simple act reveals not only how many items you have on hand, but exactly where they are.
That’s real visibility. And accuracy you can run your business on.
Accuracy means confidence
We talk a lot about speed and accuracy with RFID. But there’s another benefit that’s just as important. Confidence.
Decisions made with accurate data are better, more confident decisions. No more estimates, assumptions and guesswork. Just solid decisions based on robust and reliable information.
This newfound confidence delivers right across your retail business:
- Efficient buying
- Improved stock availability across stores and online channels
- Better customer experiences
- Reduced staff stress
- Management clarity
Operating with confidence unlocks you, your team and your business. And it’s all built on the foundation of accurate and timely information at your fingertips.
RFID closes the accuracy loop
True inventory accuracy is no longer a long-lost dream. With RFID item-level tagging, retailers can finally see what they own, where it is and how it’s moving.
Better visibility. Better decisions. Better margin.
That’s the real value of accurate data.
If you’re ready to see more clearly, talk to the visibility experts at Ramp.
