Avery Dennison’s Kris Barton on the RFID Retail Revolution
Posted by Alex Samuely on Apr 8, 2024
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While many different technologies help drive omnichannel retail, RFID technology is uniquely positioned to streamline both retailers’ and customers’ experiences. Thanks to its ability to track products in real time, RFID technology can significantly enhance inventory accuracy on the retailer side while facilitating easy in-store checkouts for shoppers. It also assists with loss prevention and returns fraud, among other features – which are revolutionizing the retail sector.
RFID, which stands for radio frequency identification, lets brands track products from their initial shipment to the point of purchase. RFID technology leverages wireless communication and electromagnetic coupling to give an item a unique identifier. This identifier then becomes an RFID tag that brands can link to particular products, in lieu of a barcode. With many retailers attempting to streamline their physical and digital shopping channels to maintain a more accurate overview of their inventory and create better in-store experiences for customers, RFID technology is rapidly rising in popularity.
Kris Barton, Senior Director of Market Development at Avery Dennison, discussed RFID’s transformative impact on retail operations during an Endless Aisle podcast episode with Marcus LaRobardiere, NewStore’s Vice President of Marketing. During their conversation, Kris and Marcus explored how brands can leverage RFID technology to glean more valuable data, improve inventory management, and provide product authentication.
Read below to learn more about how RFID technology is enhancing omnichannel retail, and listen to the full podcast episode here.
RFID technology’s access to real-time data enables those who leverage it to identify gaps across retail operations and inventory management practices. By giving retailers insight into these analytics, the technology can help reveal any supply chain issues, as well as consumer demand for certain products.
“The interesting thing is when people ask, ‘what does RFID do?’” Kris said. “The short answer is it tells you where your problems are. I tell people, ‘RFID doesn’t fix your problems, but it helps you see your problems.’
“I often talk about it like a flashlight in the corner,” Kris continued. “Everything looks fine over there. You put the flashlight [on] and you’re like, ‘Look at all that dust.’ What RFID does is allow you to collect a lot of data in a very precise fashion in a very fast period of time. Now you have the ability to react to real-time data.”
Kris also detailed how a variety of industries are taking advantage of RFID technology’s many benefits – not only the apparel sector.
“Apparel remains the largest penetrated group for item-level RFID,” Kris said. “But there’s a lot of other activity going on in pharmaceuticals. There’s a lot of stuff going on in aerospace, in automotive, and other industrial settings. We’re seeing these other areas see the benefits of RFID and leverage that technology to handle the gaps they’ve got.”
RFID technology is widely recognized for equipping retailers with better inventory insights. This results in retailers being able to make more informed decisions on stock levels across their locations and the types of products they carry. Inventory accuracy also helps minimize overstocking, which can significantly impact a brand’s sell-through rate.
“When I think about a typical retail environment, the inventory accuracy is going to be in the neighborhood of 65 to 70% accurate,” Kris said. “That doesn’t mean [retailers] think they have 100 items and only have 65 items across the entire store. What it means is…if you think you have five [items] and you only have four, that’s inaccurate. If you think you have five and you have six, that’s inaccurate.
“So when you are trying to capture data, it becomes a bit more tricky…like, ‘hey, what can I promise to the consumer in terms of online sales?’”
Investing in technology that yields better inventory accuracy is also helpful for companies that measure their inventory on an infrequent basis.
“Typically, retailers will do inventory once or twice a year,” Kris said. “It’s very expensive, so they don’t want to do it very often. A lot of times, they’ll do it in periods where they’ve got the lower level of inventory so that it takes them less [time] to count. But ultimately, over time, that inventory will degrade.
“The ability to collect this data and make better decisions is really driving RFID across the board.”
Another use case of RFID technology that’s growing in popularity is returns fraud. Once products receive their unique identifier, it becomes more challenging for individuals to engage in returns fraud and attempt to collect a refund or store credit for an item they didn’t purchase.
“Inventory accuracy is at the heart of almost every installation we do,” Kris said. “But some other use cases have emerged. Combining a digital ID with the garment that gives that EPC value, which is basically a serialized version of the SKU – some representation at the point of sale – is a big unlock.
“Most retailers are utilizing a linear barcode,” Kris continued. “You’re checking out at the SKU level, not at that particular item level. So somebody brings something in – it’s another one of this particular SKU…did they buy it? You don’t know. They don’t have a receipt.
“You give them store credit. You don’t know that might have been a shrink incident. So if you have that as a 2D barcode and you’re matching that with the EPC and ringing out at that level, now you know this item has been purchased or it’s not been purchased. Returns fraud is an area that we’re seeing grow very quickly with several different retailers.”
In addition to reducing returns fraud, one of the fastest-growing use cases of RFID technology revolves around in-store checkout experiences.
“The other one that’s been growing a lot would be self-checkout or assisted checkout,” Kris said. “We’ve all been to stores, especially during peak season, [where] queue lines are long. I could [take] all my items and put them in a basket; it rings it all up, shows it on a display. I swipe my credit card, and I’m out the door in 30 seconds.”
This method of line busting can serve as a major incentive for retailers seeking to enhance their in-store shopping experiences. They can also invest in mobile point-of-sale (POS) systems equipped with RFID technology. These solutions allow customers to check out from any point in the store using contactless payment methods, like Tap to Pay on iPhone.
Additionally, brands can use RFID technology to offer product authentication and information – such as details about the materials found within the item. If the item is sustainably made, retailers can promote that as a selling point for environmentally-savvy shoppers.
“We’re seeing some other things around product authentication,” Kris said. “If I get a digital ID, I can do consumer engagement things through a QR code and look at the origins of this or the production methodology, the material makeup – all the sustainability things people are starting to become more focused on.”
Ultimately, retailers that can collect and leverage more data will be better positioned to upgrade their omnichannel practices. With so many brands offering both digital and physical shopping options these days, the ability to more accurately manage their supply chains will streamline retail operations, reduce extraneous costs, and enhance their customers’ shopping experiences.
“The people that can have the data better in a faster period are going to be able to react better and make the right decisions,” Kris said. “Their costs are going to go down. Loss prevention is becoming a huge piece, in the U.S. especially. I also think it’s going to allow people to be a little leaner in their supply chains because they’re going to know, ‘Hey, I can ship this down here and know that when it’s gone, I can replenish faster.’”
Companies must also realize that omnichannel now plays a crucial role in retail operations – and data-driven solutions like RFID technology can truly revolutionize the sales journey for staff and customers alike.
“Omnichannel has been around for a while, but people still call it omnichannel, and to me, it’s called retail,” Kris said. “If you’re not doing omnichannel, you’re not doing retail.
“This is something everybody talks about – how do I do omnichannel? Why do I need RFID to do omnichannel?” Kris continued. “You need RFID because you need to do retail. And being omnichannel enabled is part of table stakes right now.”
“You can’t do good retail without good information about what you have and getting all those benefits that you see with RFID every day.”
To learn more about how your business can take advantage of omnichannel data, speak to one of our experts today.
