How has RFID changed retail in 2021?

Ailen Bilharz
17 January, 22

While Radio Frequency Identification technology (RFID) is by no means new, the disruption of the supply chains throughout pandemic and the rise in sustainability demands has led to its use picking up momentum in the retail space, with a recent study revealing that 46% of brands have focused more on RFID in response to COVID-19.

While there has been a shift in the sector in recent years, RFID is playing a big part in how retailers approach a new stage of life cycles in the industry. This is a natural cycle for most new and transformative technologies, but the effects of the pandemic have accelerated this. Not only have many brands found merely surviving a struggle, but have stated that one of the key reasons for implementing RFID is to benefit from an omnichannel strategy, something which has gone from being just ‘beneficial’ to almost ‘non-negotiable’.

With 82% of retailers agreeing that RFID is essential when implementing emerging technologies, it’s clear that it is here to stay, and it’s exciting to imagine how retailers will use it next. RFID’s full potential is yet to be unlocked, with the majority of retailers (80%) saying that the benefits of RFID cannot be replicated by any other technology.

Seamless shopping experiences drive the demand for RFID

RFID has fast-evolved from it’s unlikely beginnings as a means of identifying Second World War aircrafts to a global technology that is delivering business results to retailers everywhere. Today, RFID is a fast evolving market with a bright future. Tracking systems are now on a very complex level, providing retailers with incredible benefits such as improved data accuracy, faster data collection, improved inventory tracking, and reduced labor costs.

One factor driving the demand for RFID is omnichannel retailing, as the growing eCommerce sector requires better inventory tracking and management than ever before. Retailers have come to understand that although customers may be shopping across separate mediums it is essential that they uphold their brand image regardless of whether they buy online or in-store. RFID is incredibly beneficial in creating a seamless, standardised customer experience by including valuable data about retailers’ consumers and their interactions with goods. Regardless of the sales channel, RFID allows purchase information to be communicated across all connected platforms. This not only alerts retailers to a sale but it also represents one less product in their inventory and a demand for supply chains to meet.

Stores are transforming into an even more important asset to give shoppers a full omnichannel brand experience. Retailers are now able to use them as mini distribution centres which assists with making informed decisions on stock levels. For example if a customer lives near a physical store, increased inventory visibility allows retailers to make the efficient and sustainable decision to ship the parcel from the nearest store rather than a distribution centre. Therefore cutting down on delivery times and fuel emissions.

RFID is not only effective at creating seamless omnichannel experiences, it also can boost retailers’ return on investment by minimising shrinkage, reducing safety stock and manual count time. Traditional barcode tracking requires a direct line of sight and can only provide a certain level of data, whereas RFID readers can easily track everything within the vicinity and provide information on assets with pinpoint accuracy. RFID not only enables loss prevention benefits when alerting EAS (electronic article surveillance) installations, loss prevention applications are occurring across the store floor and supply chain. RFID gives retailers much more precise information about exactly what is being stolen and where, which enables increasingly targeted prevention efforts to minimise shrinkage. The benefits of  streamlined inventory accuracy and the associated cost reduction is not lost on retailers and has accelerated the global adoption of RFID technology.

Looking ahead to a new era for retail

RFID has typically been used for inventory visibility and asset tracking, but it is becoming clear that the most adaptive retailers are discovering many new uses for the technology. Although inventory visibility remains the most common use of RFID, it is important to note that supply chain visibility, omnichannel offerings such as ship-from-store, buy online and pickup in store and self-checkout are close behind. The pandemic has also created a shift in demands with concerns such as contactless shipping, labor shortages, and strict hygiene protocol having an overwhelming impact on RFID systems.

While a lot of exciting RFID and barcoding developments are already underway, it is also likely that the application of the technology will continue to adapt in the near future. Advancements in RFID tags such as thinner and more flexible designs powered by high-performance thin-film transistor technology allows the technology to be mounted to a wide array of surfaces. These enhancements open up possibilities for a range of versatile applications that avoid the physical strain sometimes placed on conventional solutions. As a result, RFID systems will become a realistic option in settings that once seemed out of reach.

The very structure of today’s RFID tags makes them uniquely versatile, but exciting new integrations take this to the next level. Warehouse management systems are already benefiting from RFID solutions which are improving traceability and precision but in the near future, smart-sensing RFID solutions will bring the best of the Internet of Things to the modern warehouse. This will allow long standing RFID benefits such as mobility to take on a new dimension as cloud-based data storage becomes an integral component of tomorrow’s RFID systems. When stored in the cloud, real-time data becomes far more accessible, thereby enhancing stock accuracy, product availability, and replenishment. Cloud systems can streamline processes in all areas of the supply chain, thereby improving productivity and accuracy among warehouse employees, IT experts, and a variety of other critical team members.

Beyond the materials and technologies discussed, RFID will evolve as retailers imagine new methods to capitalise on these solutions. Increasingly, these systems will be appreciated for their role as interconnected solutions that incorporate a variety of applications and readers. One thing is for certain, RFID technology is poised to take over the supply chain, leaving the retailers that fail to keep up at a huge disadvantage, with the technology only continuing to grow and thrive in 2022.

By Ailen Bilharz,Director of iD Cloud Platform North America, Nedap Retail

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