Must-Know Benefits of RFID Technology in Retail
Posted by Alex Samuely on Oct 3, 2023
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In today’s digital era, many aspects of retail are going contactless – from payments to inventory tracking. One technology that’s powering the ability to visualize inventory across its shipping and purchase life cycles is RFID. Thanks to RFID solutions, retailers can transform the way they approach their inventory management. This allows for more product visibility, streamlined operations, and additional contactless payment options.
RFID technology also provides benefits to consumers and removes friction from the in-store shopping experience. It enables shoppers to quickly scan products and check out via mobile point-of-sale (POS) solutions. Ultimately, the benefits of RFID technology in retail have made it a vital asset to brands. It especially aids retailers that want real-time data to gain better insights on their products and their consumers’ shopping habits.
RFID stands for radio frequency identification. It’s a form of technology that enables retailers to track items from initial shipment to point of purchase. RFID technology encompasses four major components: RFID tags, receiving antenna, RFID readers, and software.
The RFID system uses wireless communication and electromagnetic coupling to assign a unique identifier to an item. These unique identifiers become RFID tags that brands can link to specific products. RFID technology has started to eclipse the popularity of barcodes, as it offers real-time data updates and the ability to identify items not in direct view.
Kris Barton, Senior Director of Market Development – RFID at Avery Dennison, recently sat down for an Endless Aisle podcast to discuss the rapid adoption of RFID technology in the retail industry.
“What RFID does is allow you to collect a lot of data in a very precise fashion in a very fast period of time,” said Kris. “When I think about a typical retail environment, the inventory is going to be about 65 to 70% accurate. The ability to collect this data and make better decisions is what really is driving RFID across the board.”
For more insights on the benefits of RFID in retail, listen to the full podcast and read on below.
“When I think about a typical retail environment, the inventory is going to be about 65 to 70% accurate. The ability to collect this data and make better decisions is what really is driving RFID across the board.”
Kris Barton, Senior Director of Market Development – RFID at Avery Dennison
RFID technology offers many benefits to retailers, with the following notably streamlining experiences for store associates as well as shoppers.
Inventory management is crucial to both retailers and consumers. It allows brands to view real-time information on sales, stock levels, and consumer demand for specific products. This then lets retailers make more informed choices about which products to stock, reducing out-of-stock situations and minimizing overstocking.
Meanwhile, real-time supply chain visibility allows consumers to browse up-to-date products online or via mobile. They may then choose from a variety of fulfillment options at the point of purchase, such as buy online pick up in-store (BOPIS), same-day delivery, and ship-to-home. RFID solutions also offer a faster returns process, which saves consumers time.
RFID technology’s real-time tracking analytics offer numerous ways to streamline retail operations and fulfillment. The ability to quickly locate products via tags enables store associates to order more inventory as needed. They can also quickly find customer-requested items in the store.
If the customer’s desired items aren’t available in a particular location, associates can check nearby stores’ stock. This omnichannel approach to fulfillment helps staff ensure that customers can receive the items they need.
Another benefit of RFID technology in retail is its ability to support better inventory management across many sectors. For example, RFID tags can monitor certain product temperatures and alert if moisture compromises storage conditions. They can protect luxury goods by including product authentication information as well.
RFID technology also helps manage smaller products, including beauty items. It can monitor the number of items left on shelves to ensure that shelves always remain stocked, displaying all available options to shoppers.
Additionally, RFID systems offer discreet anti-theft solutions. If an individual attempts to leave a store with a stolen product, that product’s RFID tag will transmit a wave to the nearest receiver and alert the staff. This results in greater loss prevention.
RFID technology can serve as a shopping companion for customers, especially when used in smart fitting rooms. Retailers that offer RFID-enabled fitting room experiences enable shoppers to walk inside with their items and access personalized information about other available product styles and colors, as well as styling suggestions. This can also be an optimal way for brands to upsell other products and services.
While consumers enjoy a completely customized shopping experience, brands will also gain important data. This can include data around shopping habits, such as conversion rates for items brought into fitting rooms and information on which products garner the most interest.
Another common use of RFID technology in retail is for line busting in stores. This occurs by supporting seamless and faster checkout experiences. Line busting is when store associates leverage mobile technology to help customers quickly move through lines at brick-and-mortar retail locations.
Mobile point-of-sale (POS) systems or self-service kiosks with RFID technology can scan products and let customers check out from anywhere in the store – without encountering long lines. Shoppers can also use contactless payments to make purchases, which results in a much more convenient experience. Solutions like Tap to Pay on iPhone capture payments via platforms including Apple Pay, physical credit cards, store gift cards, and more. Ultimately, contactless payments help drive more sales, especially during peak shopping periods.
The many benefits of RFID technology in retail underscore why it’s a staple in the commerce ecosystem. As brands consider strategies to enhance in-store experiences for sales associates and shoppers, investing in RFID-enabled solutions offers a significant return on investment. RFID technology also allows retailers to seamlessly manage their digital and physical offerings, as well as forecast potential best-selling products or shopping trends.
This ability to monitor inventory across its lifecycle and personalize consumers’ shopping experiences – all within one technology’s system – helps brands become true omnichannel retailers.
Speak with one of our experts today to learn how your business can reap the benefits of RFID technology in retail.
