A Data-Driven Approach to Improving Retail Store Operations

March 13, 2014 Lea DeJarlais

The Impinj Store Performance Simulator (SPS) is a retail store simulator that uses a method known as Discrete Event Simulation to play out shopping and store operations activities while keeping track of the cumulative results. Developed to bring low-risk, low-cost experimentation to retail operations, SPS scenarios consist of over 25 inputs that describe how a specific store, or a product category within a store, operates. Inputs that describe SPS scenarios are organized into:

  • Operational parameters such as opening hours, supply chain responsiveness, and customer service availability
  • Inventory management variables like cycle counting activity, replenishment frequency and performance, and shrink rates
  • Merchandising data including numbers of SKUs, target inventory levels, shopper traffic, and seasonality
  • Financial information about selling prices, variable and fixed costs, and wages

Users can plug real data into SPS to determine the benefits RFID will bring to their business.

Store Performance Simulator

SPS simulates store performance with or without RFID and with various front-stock and back-stock ratios, supply chain replenishment speeds, customer service levels, stock-taking labor rates and numerous other factors, displaying the effects these parameters have on store performance.

Store Performance Simulator
A chart at the end allows users to view the impact an RFID implementation has on these factors versus current operations.
Store Performance Simulator

Though SPS was developed with RFID in mind, it is not just for RFID analysis. In fact, one of the most powerful aspects of SPS is that it allows retailers to quickly and cheaply compare many ways of improving store operations. For example, with SPS retailers can experiment with different front-stock and back-stock ratios, faster and slower supply chains, and different staffing levels for customer service or stock management.

For more information on SPS, read our Case Study, written in cooperation with a Fortune 500 brand owner. It details the benefits of store simulation and describes how Impinj’s SPS predicts the impact on performance and profits from changes to store operations, thus pointing the way toward a new data-driven approach for improving retail operations.

Interested in learning more about implementing RFID in a retail location? Download our free eBook: The Top 7 Reasons Retailers Implement RFID

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