Top 3 Reasons to Avoid RFID, and Why You Still Need It.

RFID can be a scary acronym for retailers and supply chain operations. For years, it has carried these top three stigmas:

  • The Range of an RFID signal is too short
  • Liquids and metals interfere with RFID signals
  • RFID technology is costly

Taking a look at each of these objections individually will help readers reach an understanding of why RFID solutions has become a must-have in the retail industry, as well as other industries in which inventory accuracy maximization and inventory loss minimization are essential. Consider the stigma that the range of RFID signals is too short. This may be true in some industries, but it certainly is not true when it comes to inventory management and tracking within retail and supply chain operations. Using RFID to manage and track inventory is crucial when one considers any attempt to make a mark in the omnichannel space. In fact, Bill Connell, senior vice president of logistics and operations for Macy’s, stated during a panel discussion at the RFID in Retail and Apparel 2016, that “omnichannel was critical to success in the current retail market. Connell went on to state, “RFID is essential to omnichannel execution. Therefore, RFID is essential to retailing.” Regardless of RFID range, it is clear the current technology suits retail and supply chain industries well.

RFID labels for food Nedap

The second stigma that may be causing some companies from diving in to RFID technology has to do with liquids and metals. Albeit true that these two things can cause interference, we have found once again that solutions are in place to minimize interference by liquids and metals, rendering this a non-critical concern. Placement of RFID readers, such as Nedap’s !D Top, which is an overhead reader that replaces traditional pedestals, helps to overcome interference, making it the industry’s leading choice for RFID/EAS solutions. And not only is this technology well-suited in general merchandise and apparel retail segments, but it is also viable in the food sector.

And finally, the oldest and most popular falsehood about RFID: cost. For decades, RFID technology has carried this stigma, and until recently, it may have been true. But like all technology, the cost of RFID has drastically declined. Retailers may also be surprised to learn that Nedap’s RFID/EAS solutions are futureproof, meaning they can be used strictly as EAS systems today, and as RFID systems in the future without having to replace any hardware. This helps to further leverage the cost of RFID technology.

Retail store entrance RFID technology Nedap

Now that the top three obstacles to RFID technology have been addressed, it is time to discuss the benefits. The retail and supply chain landscape has changed significantly over the last couple of years, and changes are still coming. The number of people who order items online and pick them up at store locations continues to increase. What happens when customers order online, only to find the item is not at the store location at the time of their scheduled pick-up? The answer to that is easy: brand damage. Building trust within the customer base takes time, but it takes even longer to earn trust back once it has been lost. This is at the heart of experts’ claims that RFID technology is paramount for successfully competing in the omnichannel space. Knowing merchandise levels in real time is essential in order to deliver customer satisfaction throughout the shopping experience. And when one considers that a store employee, when using RFID, can take a full and accurate store inventory within minutes, it becomes clear why RFID technology is a must-have.

About Nedap Retail

Nedap brings 40 years of global experience, market expertise and close cooperation with leading retailers. Everything we do is driven by our mission to make it simple for retailers to always have the right products available. To achieve this, we offer industry-leading solutions for our customers’ diverse needs in loss prevention and stock management. For more information, visit www.nedap-retail.com.

Citations:

http://www.rfidjournalevents.com/retail/quote_connell

RFID: The Last Piece to the Omnichannel Puzzle

Retailers who develop omnichannel strategies are committed to providing true continuity of their brands, products, and shopping experiences for their customers. So while they are ensuring that their company Facebook page reflects the design of the website, which matches up with their customer’s in-store visits, they are also making sure customers engage in rewarding buying experiences. This may include allowing customers to own their data to use to navigate future experiences or guide the creation of new experiences. Omnichanneling works to provide context for shoppers to help mold their purchase decisions: price, service, distribution, brand relationship, satisfaction, etc.

Thinking Ahead To The Holidays

Preparation for the upcoming holiday retail season is underway. Research shows that while some retailers embarked on omnichanneling during the last holiday season, few had immediately observable success and thus, put RFID inventory-management projects on hold. Rather than abandoning omnichannel strategiesbecause immediate outcomes were sometimes difficult to measure, perhaps looking into what can further enhance the success of the plan as a whole is a better way to move forward.

RFID Can Help Manage Your Omnichannel Strategies

Connecting and integrating multiple online platforms with physical storefronts can be a daunting endeavor… and one which requires the latest technology to keep up with data input, data generation, and data analytics.

How can retailers successfully manage and track their business processes while engaging in omnichanneling? 

The emerging technology for capturing, storing, and using data provided through omnichanneling is RFID(Radio Frequency Identification). RFID tags, or smart labels, have been around a while, but they are rapidly becoming part of retail data management due in part to improved technology and lowered costs.

“Rise in e-commerce and m-commerce has led to the adoption of omni-channel distribution systems, which require sophisticated inventory management systems to monitor operations. M-commerce and e-commerce companies compete on the basis of price, quality, and delivery time. RFID systems use an electronic data interchange to provide real-time information about the status of ordered goods to customers and retailers,” says Amrita Choudhury, a Technavio lead industry analyst.

How Can RFID Technology Help Retail?

RFID tags that are attached to products contain integrated circuits for information storage and processing, and can transmit ID signals that provide stock number, production place/date, or other information. RFID tags can be attached to objects, then used to manage inventory without manual data entry. They can be used to track shipments, provide surveillance on equipment and fixtures, and they can follow products within a store. Tags are great for tracking promotional products, yielding data on where and when the product was sold, and whether it was at full or a discounted price. RFID Tags have been called intelligent bar codes which can talk to a networked tracking system that can follow every product.

RFID readers (called interrogators) can check authentication and monitor when tags go in and out of interrogation zones. They can help reduce in-store and out-of-store theft, inventory accounting inaccuracies, and other inventory loss situations. RFID tags are more easily “read” than bar codes, and can be read even if covered, inside a bag, or stuffed in a pocket. Multiple tags within the range of the RFID reader can be accessed simultaneously and this capability alone puts RFID far ahead of the UPC bar code that had been put into widespread use the past few decades. 

Embracing RFID Technology Leads To Omnichannel Success 

One of the must-haves for omnichannel success is a strong foundation of RFID system management. Enhanced consumer convenience options such as in-store pickup of online purchased products, reduced multi-step buying processes, assurance of product authenticity, elimination of in-store register lines, improved item replenishment, and increased in-store inventory accuracy, all starts with the implementation of RFID technology. RFID can enhance and interconnect in-store and online strategies to enrich your customer’s multichannel shopping experiences.

Business Wire, a global business news outlet, sums up some of the benefits of RFID in this way,

“Increasing acceptance of RFID technology in the retail sector is the major trend in the market. RFID systems for retail applications are applied by the business to increase their return on investment as these systems help reduce the delivery cycle time of goods and the number of defects.” — Business Wire

RFID systems provide transparency and help streamline supply chain operations. With the help of RFID systems, retailers are able to capture the data and use inventory management software and big data solutions to identify the buying patterns of customers and form different promotional schemes to increase sales.”

Preparing For Tomorrow? 

RFID is a foundational key to omnichannel success. RFID can track and monitor physical retail business automatically and accurately. RFID tags can identify a product, where it is, and its condition through a globally interconnected information system web. RFID enhances a customer’s online and in-store buying experiences and provides product authentication, product tracking, supply chain management, fewer out-of-stock items, efficient distribution, easier returns, and ultimately … customer satisfaction.

RFID for Retailers: Either Lead or Be Led

The retail industry is ever-changing. New technology and innovation re-focuses and alters the marketplace at every turn. Retailers must stay ahead of the curve to attract new customers, retain the loyalty of existing customers, and streamline operations to sustain profits.

Adopting RFID is a win-win strategy that allows today’s retailers to forge ahead in this ever-changing landscape while leading the industry in a new and innovative direction. Mark Roberti, founder and editor of the RFID Journal, says in an article, “RFID’s Tipping Point, “What I see is a technology that is beginning to build critical mass in retail. At some point, enough retailers will have put RFID in stores that suppliers will decide they might as well tag all of their clothing. At that point, other retailers will quickly follow suit, and RFID will spread rapidly through the rest of the retail sector.”

IS RFID A REALITY?

Some large global retailers such as Walmart, Macy’s, Zara, and JC Penney, are already using RFID technology and the use of RFID tagging has significantly increased over the past five years. But the industry is poised for an exponential growth surge in the very near future. The RFID Journal reports that the retail industry could “see tag volumes grow from 5 billion [at present] to 10 billion to 50 billion in the space of just a year or two.” A Frost & Sullivan report on tags, hardware, and middleware/software, predicts that the RFID retail market “will grow from $289 million in 2011 to $3.2 billion in 2017,” with significant growth in the areas of “apparel and footwear, perishables, jewelry, and personal care.”

Retailers who do not jump on the RFID bandwagon soon, may find themselves lagging behind their competitors in several key areas, such as inventory control and distribution, product authentication, and customer satisfaction.

THE TIME FOR RFID IS NOW

Retail innovators are eager to get started using RFID technology and realize that, as with the implementation of any new idea, there is a foundation to be laid.

  • RFID requires a commitment from manufacturers and suppliers to put tags on goods.
  • RFID infrastructure takes time to install in stores.
  • RFID necessitates a strategic and purposeful allocation of resources.

Some retailers have started their RFID plan with a limited number of product categories and then expand to more categories as time and money allow. This way they will not be caught short when the “tipping point” is reached and the majority of retailers are scrambling to develop and execute RFID programs.

BENEFITS OF RFID

What can retailers gain from adopting and implementing RFID technology? Business Wire reports, “Increasing acceptance of RFID technology in the retail sector is the major trend in the market. RFID systems for retail applications are applied by the business to increase their return on investment as these systems help reduce the delivery cycle time of goods and the number of defects. RFID systems provide transparency and help streamline supply chain operations. With the help of RFID systems, retailers are able to capture the data and use inventory management software and big data solutions to identify the buying patterns of customers and form different promotional schemes to increase sales.”

Benefits of using RFID technology:

  • Accurate inventory tracking
  • Less discrepancies in inventory accounting
  • More efficient distribution
  • Reduced costs due to inaccurate accounting or delayed reporting of theft or other product loss
  • Identification of individual product items beyond their product type
  • Location of items beyond a direct sight line
  • Access of information from thousands of items simultaneously, all without manual data input or manipulation
  • Immediate access to information about the product that can be sent to inventory systems and/or manufacturers
  • Increased efficiency of operations
  • Improve asset accounting
  • Decrease reliance on manual input
  • Reduction of operations costs and supply chain inefficiencies
  • Simultaneous and continuous collection of useful data for analytics
  • Ability to identify the buying patterns of customers, online and in-store, to create targeted promotions that increase sales

TAKING THE FIRST STEP TO RFID

Retailers are beginning to get off the proverbial fence and really start to look at implementing RFID technology. This area is expected to expand, especially with businesses that can respond nimbly to new technologies, cutting-edge innovation, consumer demands, and marketplace pressure. Technavio, the leading global technology research and advisory company, reports, “Increasing adoption of RFID technology will significantly propel the global inventory management software market in the retail sector until 2020.”

Building an RFID strategy requires accurate planning by manufacturers and retailers to address an often complex set of objectives with the goal to ultimately better serve their vendors, distributors, and consumers both in the real world and in the virtual online marketplace.

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