RFID (Radio Frequency Identification) adoption in Retail
Updated: Oct 19, 2020
Facilitating Omni-channel offerings and manifold Retail operations.
In our previous articles, Online, offline, Omni-channel Retail https://www.barcodeireland.ie/post/online-offline-omni-channel-retail and Online store for your Offline business https://www.barcodeireland.ie/post/online-store-for-your-offline-business, we discussed the importance of a full portfolio omni-channel offering for retail. Omni-channel retailing, where customers are able to shop not only in the physical store but also online and on mobile devices, has changed how the industry views the retail store.
RFID technology is a critically important enabler of omni-channel retailing, the retail industry being the driving force behind the adoption of RFID in the last couple of decades. Here we discuss the manifold benefits of employing RFID in the retail setting.
RFID, Radio Frequency Identification
RFID has been around since the 1940’s when it was first used for the tracking and identification of friendly aircraft in WW11. Today, it is used throughout the retail supply chain performing essential functions such as the tracking of inventory and inventory accuracy, supply chain management, security to name but a few.
This tracking technology uses radio waves to read and transfer data from RFID tags containing a chip to a reader. The tags are read by handheld or fixed RFID readers, providing real-time inventory visibility throughout the supply chain.
By tagging items with RFID tags, inventory and stock levels can be monitored in real time providing the instant data required to satisfy modern customers expectations. In retail, they can be employed on clothing or movable assets such as trolleys in store, forklifts in the warehouse.
RFID chips and barcodes share mutual qualities. Both technologies are used to track inventory as it moves through the supply chain including variations in a single product. However the barcode system is limited in that items require individual handling using ‘line of sight’ scanning at a fixed station or using a hand held device. RFID tags can read multiple items from several hundred meters depending on the reader.
RFID facilitates the scanning of hundreds of tags simultaneously allowing real time data on stock levels thereby avoiding out of stock scenarios, enabling the ready replenishment of shelves thereby meeting customer expectations and improving shopping experience.
RFID, where employed, has been demonstrated to improve inventory accuracy to upwards of 98%, boosting sales and identifying popular in demand items.
Inventory accuracy is a crucial component in a comprehensive retail omni-channel offering. Connected customers expect to be able to research and order online and then collect in-store the following day - if not immediately!
It is estimated that some 80% of customers are reluctant to visit an offline store if the current stock is not indicated on their online store.
RFID therefore supports the omni-channel retail approach by ensuring instant stock updates, location and product availability thereby avoiding disappointment online/offline and enhancing shopper experience.
Supply chain management
RFID tracking can also be used to improve product visibility in the supply chain right through from manufacture, to warehouse, to in-store. Retailers can see real time where their products are, in a pallet or container, giving them greater oversight of the supply chain process.
Retailers can also use readers installed at the entrance/exit of their warehouse to read tags on shipped items and delivery vehicles thereby improving the speed/efficiency of the warehousing processes.
Improved shopper experience
RFID is changing the way customers browse and shop for products in traditional bricks-and-mortar stores. Interactive touch screens in fitting rooms geo-locate products and track the item being fitted using their RFID tags. Customers are presented with varying sizes, alternative colours, complementary clothing, accessories etc. and even with how they may look on.
Such interactive shopping experiences build brand awareness and customer loyalty whilst at the same time differentiating retailers products from the competition. The rise of experiential shopping has made physical shopping more fun and technology such as AR and artificial intelligence has made it even more convenient thereby enhancing customer experience and resulting in increased sales.
RFID technology has impacted data collection concerning customer behaviour and insights. Each RFID tag contains data such as product numbers and information about each SKU, which data can be paired at the checkout in realtime with customer data such as payment method, loyalty card, returning customer etc.
RFID tags can be used to track how customers and products navigate the retail space. This data can then be used by retailers to reconfigure their store layouts and marketing tactics based on customer interactions with their products.
Time and labour saving
RFID expedites parts of the retail process, such as stock taking/accuracy and the tracking of items across various locations, allowing for more efficient/less effort labour and freeing up store floor staff to interact with the customer.
RFID enabled POS (Point of Sale)
RFID enhances and may even eliminate the checkout experience. Using RDID tags, customers can log their purchase by swiping an item using an app on their mobile phone. Instead of queuing at the checkout, they can pay automatically on their smart phone. An alternative is to use tunnel readers where all items in the basket are scanned instantly at the checkout leaving shoppers to swipe their card or mobile phone on the POS (Point of Sale) reader.
Amazon Go is reducing checkout queues and shortening the POS process by allowing customers to walk freely out of the store through a RFID gate, their purchases debited to their credit/store card.
RFID can be used for two key security areas, access control and theft prevention. RFID devices, such as smart cards and wristbands, can be used as electronic keys giving individuals access to areas where they may enter. Both stock and company equipment can be RFID tagged eliciting an alarm should an item leave the premises irregularly.
Retail industry driven RFID technology adoption therefore facilitates the new era of customer driven omni-channel retail offerings and manifold essential retail operations.
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