September 25 2019
It has been a favourite topic in the retail industry for what seems like 15 years. A constant theme that sounds more like a Game of Thrones trailer than a true industry development; “RFID is coming.” We’ve heard all the legendary promises of what it can do, what it will do, and the fundamental changes it will truly bring to the retail industry. Well, where is it? Is it finally here?
RFID has finally hit the retail market and is starting to make its first widespread impact for both online and offline retailers. Overall RFID technology costs have dropped, making the adoption for RFID much easier to swallow and bringing about true ROI for those who have integrated it into their systems and processes. Across the spectrum of retail, one can see a number of successful uses of this technology, such as making inventory counts faster and more accurate, using RFID for loss prevention and having true visibility into retail shrink, and making the retail environment interactive and more personal for the consumer.
With so many retailers starting to dive into the world of RFID, we begin to ask the questions, “will retailers who don’t adopt RFID fall behind? Will they be able to offer the experiences and customer service that consumers will begin to expect and demand of their brands?” It is a logical question to be asked and one that should definitely be explored as retailers are now evaluating the pros and cons of diving into RFID as organizations
Retail’s Future
When we look at the future of retail, we can see how things will undoubtedly change: mobile phone checkout, shrink visibility, real-time inventory and display compliance, are all areas that are made functional only through RFID technology. For those retailers who are resistant to this change, they will have difficulty evolving and offering these types of service to their customers. Without accurate inventories, how will retailers offer services like BOPIS (Buy Online, Pick-up In-Store) with any degree of confidence? What happens if retailers offer BOPIS and, because of bad inventory accuracy, have unhappy customers leaving their stores without products in-hand? How will that affect their customers’ brand loyalty?
We know BOPIS is here to stay so retailers must start updating their systems for offering this service. Statistics show that 67% of shoppers in the US have used BOPIS in the past 6 months. With this type of adoption, imagine the insights retailers can gain on their customers? Other statistics indicate that 88% of retailers who deploy BOPIS programs can track incremental in-store purchases from these customers. Also, it was determined that 98% of retailers who have adopted these programs say they’re getting additional in-store purchases from BOPIS users. Therefore, not only does this create a better experience for the customer, but it also creates additional sales. Without RFID, BOPIS is almost impossible to manage and execute with an acceptable level of success.
Retails Studies
Retail studies suggest that the biggest pain points for customers is the checkout process. Because of this pain, many retailers are evolving to some version of self-checkout or mobile pay checkout. These new evolutions make loss prevention even more challenging, with retailers having to decide whether to ditch the EAS hard-tag model in order to provide convenience to their customers or deploy some self-detagging station, which is just another cue that customers would have to navigate through. How long will stores be able to offer self-checkout at the expense of high shrink or a cumbersome customer experience? Well, RFID can curb these challenges. These RFID systems can read products walking out of the store and know whether they have been sold or unsold, thus resulting in accurate alarms. No longer do you need to have hard tags detached at the point of sale. Retailers can now have a system that knows when each specific product is sold, thus resulting in an “unsold” alarm at the EAS system. This is impossible to do without RFID technology.
The Cost
Not only has the cost of RFID deployment decreased, which opened the doors for implementation, but new services like BOPIS, self-checkout and 100% inventory accuracy has created a demand where RFID is now a must, not a luxury. One can see that product manufacturers are starting to source-tag their products with RFID labels, which will only help the implementation. Things are moving fast in the RFID retail world and the big question retailers must ask is, “do I begin the road to RFID, or do I watch as the future of retail passes us by?”
