CSA Exclusive: Twelve retail business cases for RFID

Dan Berthiaume
Senior Editor, Technology
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Chain Store Age has exclusive first access to a new study suggesting that RFID is becoming a viable solution for workflows across the retail enterprise.

According to “RFID-Powered Solutions: More Attainable Than Ever,” a new study from Cambridge Retail Advisors sponsored by Sensormatic by Johnson Controls, retail has reached an inflection point for RFID. Cambridge Retail Advisors (CRA) suggests that the average cost of labor at retail companies and the increasing value attached to inventory visibility and availability has created a new justification for retail RFID implementations.

In 2021, with improvements in manufacturing and economies of scale, the cost of individual passive RFID tags has come down significantly, to as low as 3.8 cents per tag. CRA says this price point has even midsize retailers starting to consider RFID implementation. 

[Read more: Three retail solutions evolving in unexpected ways]

Following is a brief overview of 12 business use cases CRA says are currently helping drive RFID adoption in retail.

With RFID, self-checkout can be a simple process. Customers place items into a boxed area on the self-checkout kiosk so the RFID tag on the product can be read and the item’s price and details captured. The customer then removes the item from the boxed area and adds the next one. 

If an item is not recognized, the customer is advised to scan the barcode instead. They then review and verify their order before using the kiosk’s touchscreen to complete the transaction. RFID self-checkout solutions provide reductions in wait time and labor costs, as fewer store associates are required to assist customers. A further opportunity exists to combine RFID with individual biometric authentication, an alternative to traditional methods of payment, creating “walk-through shopping.” 

RFID technology can also help solve the problems created by the growing volume of customer returns by enabling “drop and go” returns. If items are RFID-tagged, customers can drop their return off at kiosk embedded with an RFID reader in the store, without ever having to interact with a store associate. By reading the RFID inlay in the tag, this reader can identify who made the purchase, using what payment, and automatically credit the customer. 

Order fulfillment 
The COVID-19 pandemic expedited the adoption of BOPIS, ship from store, curbside pickup, and other omnichannel fulfillment options. RFID handheld devices have a “Geiger counter” feature that provides easy locating of items. When an
item’s information is entered into the device, the handheld scanner beeps as the associate approaches the merchandise. 

The closer the associate gets to the item, the louder or faster the beep occurs, saving labor and increasing the efficiency of locating items. Associates are able to pick items for fulfilment faster. 

Combat fraudulent returnsnand counterfeiting
EPC/RFID tagging provides the serialization of items, allowing retailers to uniquely identify each unit. This enables each RFID tagged item to be distinctive, as compared to a standard SKU-based identification system where all similar-sized, color, and styled items have the same SKU identifier. 

When a customer brings an RFID-tagged item for return, the retailer will be able to identify if that specific item was sold and if it was the exact item that was purchased, not another size/color/style of the same item. This ensures the exact item that was purchased is returned. 

In addition, if loss prevention teams come across stolen or counterfeited products, they can search their database for the unique serialization. 

Hard tag reduction 
Applying RFID tags to products during manufacture or attaching RFID tags later on, provides similar in-store theft prevention benefits to electronics article surveillance (EAS) hard tags, but with reduced cost. Distribution center workers or store associates would no longer have to manually attach or remove EAS hard tags to garments, resulting in reduced labor across the entire organization. 

The reduction in use or total removal of hard tags from the business also paves a path for the retailer to implement RFID self-checkout and cashier-less stores. Pairing RFID technology with computer vision, artificial intelligence, and cameras eliminates the need for checkouts and cashiers, creating stores that are similar to Amazon’s Just Walk Out technology. 

[Read more: Amazon opens second high-tech grocery store with ‘Just Walk Out’]

Increase speed of markdown process 
Historically, when a store associate receives a list
of items that will be marked down in price or moved to the clearance rack, they have to manually go search the sales floor or stock room for the items. 

By utilizing the Geiger counter feature within the RFID handheld, associates are able to locate items faster. The Geiger counter directs the associate to exactly where the item lives. This reduces the time needed to complete markdowns given items are easier to locate with an RFID handheld device. 

Merchandising, planning and customer journey
Frequently updated inventory data significantly increases the effectiveness of merchandising and planning tools that provide the basis for real-time fulfillment, replenishment, and reorder processes. Increased accuracy in the inventory data that feeds merchandising and planning tools minimizes out of stock positions and leads to a better customer experience. 

In addition, accurate inventory data allows the retailer to stay in stock based on customer demand and to be in position to offer “last units.” This reduces the need for safety stock that many retailers apply to product availability as a workaround strategy to avoid stockouts. 

Using RFID, knowledge can be gathered about when and where an item was touched, tried on, and eventually purchased—or abandoned. Mapping the customer journey in the store to track product flow provides insights that can enable stores to create more effective planograms, placing products in high traffic, or long dwell time areas to generate additional sales. 

[Read more: Oldies but goodies – Don’t overlook these legacy solutions]

Shrink reduction 
Implementing RFID can reduce shrink, loss, and counterfeiting, with many applications in luxury merchandise and electronics. By coupling sales and video data with RFID tracking capabilities, stores can identify which items left the store without being purchased, and when. Combining this data provides visibility into what was stolen, when it was taken, who committed the crime, and even which door in the store the perpetrator entered and exited from, creating a full picture of the theft. 

Retailers are able to see shrink happening, in real-time; creating opportunities to take immediate action such as alerting associates, loss-prevention personnel, or the authorities. 

Inventory receiving 
RFID usage has increased throughout the entire supply chain, providing improved visibility from manufacturing to distribution-center processing, to inventory receiving at the store level, to stocking the floor from the receiving door. The retailer receives information, generally through advance shipping notices (ASN), on when their merchandise is arriving at their warehouse, distribution center, or store. 

Increased merchandise readability and traceability enabled by RFID allow retailers to better staff stores; store management knows what merchandise is arriving and when it will arrive. RFID enables assumed inventory receipt at store and warehouses. 

Cycle counting 
Most, if not all, retailers conduct inventory counts in their warehouses, DCs, and in stores. Counts are completed to update inventory management and financial systems. 

Traditional means of taking inventory involve associates, or an external firm, counting products section by section in the store or designated area. With RFID technology, retailers can enable cycle-counting automation. When merchandise is RFID-tagged, an associate can simply wave a handheld RFID reader over the merchandise, reading multiples items in a shortened period of time. Cycle counting becomes more productive, optimizing labor in stores and DCs. 

Fitting room insights 
Item tracking enabled by RFID technology in fitting rooms provides data on product movement, dwell times, item conversion rates, session duration, staff response time, and abandoned merchandise. Store leaders and merchants can use this generated data to better allocate merchandise to meet customer needs, while loss prevention (LP) personnel can better track items a customer is carrying in and out of a fitting room, an opportunity to reduce theft. 

Individual productivity and asset tracking 
Providing employees with badges embedded with RFID tags enables the logging of their movements from area to area. Employee tracking and monitoring improves productivity, safety, security, and time and attendance compliance. With improved individual productivity tracking enabled by RFID, retailers gain visibility into where employees are most efficient. Managers can then create more individualized training programs to close gaps identified in associates’ productivity. 

RFID tagging and tracking also increases time and attendance accuracy. Automating the tracking of employees’ clock-ins and clock-outs makes it easier to process payroll due to improved accuracy and reporting, saving time for employees and managers alike. Active or passive RFID tags can also be attached to equipment such as handheld scanners, mobile devices, and non-retail items, improving the management of assets. 

Accelerate merchandise recovery
RFID enables directed put-away, speeding up merchandise recovery. Tagging merchandise with RFID can improve the recovery process. Upon receipt of inventory, RFID software prompts associates to identify specific locations of merchandise placement on the sales floor and in the stock room.