What: New research reveals the enduring dominance of physical retail, with stores now serving as integral hubs for e-commerce fulfillment through RFID technology and smart solutions that boost inventory accuracy from 60-70% to 98%.

Why it is important: This transformation of physical stores into tech-enabled fulfillment hubs demonstrates retail's evolution towards true omnichannel integration, addressing critical challenges in inventory management while meeting growing consumer demands for seamless shopping experiences.

Physical stores continue to dominate the retail landscape, with 99% of brands and 96% of consumers favouring in-store experiences. The role of stores has evolved significantly, now serving as crucial components of e-commerce operations, with 42% of online orders involving physical locations for fulfillment or pickup, a substantial increase from 27% in 2015. This shift is driven by consumer demand for rapid delivery and pickup options, alongside retailers' efforts to maximise inventory efficiency. RFID technology emerges as a key enabler, dramatically improving in-store inventory accuracy to warehouse-level standards of around 98%. The technology's benefits extend beyond inventory management to include enhanced order preparation through features like "Geiger mode" for item location and ceiling-mounted RFID antennas for precise mapping. This integration of digital capabilities with physical retail spaces represents a fundamental transformation in how stores operate and serve customers.

IADS Notes: Recent retail innovations demonstrate the growing importance of smart store technologies. H&M's new store concept launched in November 2024 showcases how RFID integration can enhance both customer experience and operational efficiency . This aligns with broader industry trends, as 61% of retailers plan to implement RFID by 2026 . The technology's impact is particularly significant in inventory management, with retailers like Macy's expanding RFID use to include loss prevention , while European consumers continue to show strong preference for physical stores despite digital growth .

How smart stores are boosting the omnichannel experience