Shoppers are playing it safe right now. Between inflation, tariffs, and continual economic uncertainty, even loyal customers are pulling back. Major retailers, including Kohl’s, Macy’s, Walmart, and Target, have recognized this and are forecasting lower earnings to reflect today’s cautious consumer behavior.

In a market like this, managing inventory strategically becomes a make-or-break factor for profitability. Globally, the retail industry loses an estimated $1.75 trillion annually due to out-of-stock items, accounting for roughly 8.3% of total retail sales.

Additionally, 91% of consumers say they’re less likely to shop with a retailer again after a negative experience like a stockout. When every purchase matters, keeping up with shoppers’ demands while avoiding stocking errors becomes a high-stakes balancing act.

The true cost of inventory mistakes

Even in stable markets, managing inventory is difficult. Overstocking ties up cash and often leads to markdowns. Understocking, meanwhile, means missed revenue and lost customer trust. Of the $1.75 trillion lost annually, out-of-stocks account for a staggering 68.2% ($1.2 trillion), while overstocks make up the remaining 31.8% ($562 billion).

The root causes behind inventory errors are varied and complex. Supplier issues, like delayed deliveries, quality problems, and cost fluctuations, cost retailers an estimated $418 billion annually. Retail theft and organized crime account for another $379 billion in losses, while outdated systems and inefficient processes add an additional $412 billion in losses.

In today's market, overcoming these difficulties and meeting consumer demand requires a high level of supply chain visibility. Traditional inventory systems just aren't able to provide the information necessary, but real-time tracking with RFID can.

RFID’s role in reducing inventory errors

RFID technology allows retailers to tag and track individual items throughout the entire supply chain. When paired with RFID management software like TrueCount, retailers can achieve real-time inventory tracking, leading to improved inventory management. Here’s how.

1. Reduced stockouts

RFID real-time tracking delivers live inventory data whether items are on the shelf, in the backroom, or en route. This end-to-end visibility helps prevent misplaced products, reduce shipment delays, ultimately reducing stockouts by up to 70%.

2. Smarter forecasting and replenishment

With item-level accuracy and real-time data, RFID helps retailers understand exactly what’s selling and when. RFID systems consistently achieve 99.99% inventory accuracy, far surpassing traditional methods. This precision enables more effective forecasting, prevents over-ordering, and ensures products are replenished exactly when and where they're needed.

3. Loss prevention

RFID goes beyond basic theft deterrents. While traditional tags trigger alarms, RFID systems provide detailed logs of when and where an item was last detected, whether it left the sales floor, was rerouted, or went missing. These insights make it easier to identify suspicious activity, such as repeat losses in specific departments or shifts, and take swift, informed action.

4. Optimized processes

RFID simplifies everything from restocking to customer service. Associates can locate products in seconds. Plus, inventory counts can be automated and reorders can be triggered based on real-time data. The result? Fully stocked shelves and faster service for every shopper.

The bottom line

RFID’s power lies in its ability to tackle multiple causes of inventory errors, whether it’s supplier delays, internal miscounts, theft, or inefficient processes. With accurate, real-time data, RFID doesn’t just solve stock issues — it equips retailers with the insights they need to continually refine and optimize operations.

We know that implementing RFID can feel daunting, but that’s exactly where Charming comes in. Our TrueCount software makes it easy to embed RFID into your packaging and logistics workflows, giving you end-to-end visibility without disrupting your existing operations.

Ready to improve your inventory management and stay in sync with your shoppers? Schedule a consultation with us today!