What are the uses and benefits of RFID in retail

8th May 2018

uses and benefits of RFID in retail - OCS Retail Support

Radio Frequency Identification (RFID) tags are quickly replacing barcodes as the retail industry’s primary method of keeping tabs on stock. The technology has been developed to improve the accuracy of inventory tracking as well as improving customer experience in store, and can easily work alongside smart shopping and the Internet of Things.

RFID inventory management works by attaching a microchip to the product, or to the box which contains your products. This microchip holds all manner of information, such as product type, size, colour, manufacturer, and serial number. RFID tags can be used in almost all stores for tracking any type of retail stock, vastly improving the shopping experience for staff and customers.

RFID technology provides real-time visibility on stock levels

With the continuing shift in customer preferences towards online shopping, retailers face a fiercely competitive digital environment. Brands must be able to provide services like one-click shopping and same-day deliveries, but to stay on top these demands it is vital to have up-to-date inventory and consumer behaviour data available. This is where RFID technology comes in.

RFID can be used to ensure that there are no blind spots in the supply chain, with tags applied and scanned through every stage of the supply process following production, from warehouse storage right through to the final sale.

Store managers can ensure they have the right amount of stock delivered by simply scanning each box’s RFID tags upon delivery. Multiple tags can be scanned at once, making it easier and quicker for staff to count the number of items received in one delivery, and giving an accurate stocktake reading. Once items have been sold, the RFID tags can be scanned to update the inventory, giving an indicator of what needs to be replenished, and what is still available in store.

Stocktakes should be completed frequently in order to keep on top of how much product is held in storage, and minimise the potential for any damaged or stolen items. RFID inventory management technology offers increased stock accuracy of between 65% and 95% when maintained on a regular basis. This gives an accurate and up-to-date status on stock availability, and can improve customer satisfaction.

Brand loyalty and reputation can be improved with accurate online order statuses

One of the most important elements of a retailer’s strategy is the order fulfilment process; if a customer finds that an order isn’t available as promised, it puts a brand’s reputation and the loyalty of the customer at risk. It can also benefit competitors if an unsatisfied customer decides to take their custom elsewhere.

According to data compiled by business strategy firm Accenture, customers are much quicker to act when they are unhappy. Half will quit doing business with a company immediately after a bad sales experience, while one-quarter take to social media and 54% start engaging with other companies. Brand reputation is particularly in important in the age of social media. Bad reviews via word-of-mouth are damaging, but exposure is limited to those within a particular social circle. Bad experiences that make their way onto Twitter, Facebook or other social platforms have the potential to a reach a much wider audience.

Having real-time information about stock levels can help eliminate this risk, increasing customer satisfaction and encouraging brand affinity. When using RFID tags, unfulfilled web-based orders can be reduced by over 10%, making this technology a worthwhile investment for store managers.

In store experience can be enhanced with interactive RFID

Strategically placing fixed RFID readers in store can provide an easy way to track products as they move around the premises, from the stockroom to the shop floor to the checkout. This provides real-time business insight into how customers shop in store, which can then be used to increase sales. For example, popular products can be placed towards the front of the store in order to entice shoppers inside.

In addition to this, RFID technology can be used alongside the Internet of Things (IoT) to create interactive elements, enhancing the experience customers have in store. For example, the technology has been used to create smart mirrors in changing rooms. These mirrors assist customers by offering practical advice, for instance suggesting items that complement the outfit and demonstrating what the outfit will look like in different lighting conditions. The mirrors can also display similar products, as well as pricing and product information directly on the screen.

Even shelves can be enhanced using RFID tags. Smart shelves track inventory in real-time, alerting staff when items are running low. This intel can be used as an indicator to the most popular products, which can help store managers replenish stock without having to physically scan products as part of regular stock takes. Information gathered this way can also be used when deciding on sales and promotions, as managers and staff will have data on the most and least popular products available.

Payment processes can be sped up with checkout-free stores

Amazon’s checkout-free grocery store, Amazon Go, opened in Seattle at the start of 2018. Customers are able to simply walk out of the store with items, without having to physically pay for them. The store works by having customers sign into their Amazon accounts when they first enter the store; cameras and sensors placed around the store then track what has been picked up and added to each shoppers’ basket. The total spend is then calculated and charged to the card linked to each customers’ Amazon account once they have left the store.

While RFID technology is not used by Amazon Go itself, it could be used by future checkout-free stores, as sensors placed around the store will be able to track where each product is, and whether customers have left with the item. As product information is stored on a database, all items can be updated in real time, in case of any promotions or markdowns, giving customers the most accurate product information available.

When running a retail business, you want to make the process of keeping track of stock much easier. Using RFID tags can help minimise the time spent on stocktake, while also providing real-time updates as stock is moved around the store and sold on to customers. It can also be used to enhance the customer experience and maximise sales, by providing up-to-date stock information, without the risk of mistakes by human error.