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Four reasons to consider a holistic retail tagging strategy

RFID tags can help retailers optimize operations.

Use of stores for e-commerce fulfillment, staffing shortages, rising crime, growing shrink, and supply chain troubles have all made headlines as challenges to retail, alongside claims that complexity within the industry is rising.

However, this framing doesn’t quite capture the reality. It’s not that the landscape is more complex; it’s that we now have the data to see retail challenges clearly.

Organizations and industry watchdogs can quantify challenges and opportunities with more precision than ever before. Seeing all this data laid out can be daunting. However, the same technology that brought retailers’ obstacles into focus can highlight opportunities to address these issues.

How inventory intelligence breeds innovation

To succeed in today’s market, retailers can no longer rely on broad market intelligence. They need item-level insight into operations at the enterprise, regional, and even location levels. That’s what technology driven inventory intelligence offers.

To get this insight, retailers need to expand their technology suites, incorporating new types of radio-frequency identification (RFID) tags to ensure comprehensive visibility into merchandise’s movement from source to sale. Hard tags work well for some products, but they aren’t a one-size-fits-all tool. Integrating embedded soft tags, such as care or brand labels or dual-technology options can show where merchandise is, how it moves throughout the store, and how shoppers interact with different products on a much broader scale than any one tag style alone.

When done right, adopting a blended tagging program also drives more efficient operations by:

  1. Facilitating precision.

Using a mix of tags can help retailers develop more strategic loss prevention and merchandising programs. Hard tags create visual deterrents, which can be useful for some merchandise. However, they can also get in the way of well-intentioned shoppers, creating unnecessary friction.

Blending tag types helps retailers put extra protections on high-risk items and reduce barriers elsewhere—while still having analytic “eyes” on inventory. Furthermore, specific brands may prefer the use of one option over the other for aesthetic, material, or values-based reasons. Intimates, for example, may be ruined by traditional hard tags but still need protection from theft. Integrating multiple options into your toolkit can help support a wider range of suppliers.

  1. Reducing labor demand. 

Many retailers have started applying hard tags to items at the source to reduce labor needs but integrating other tagging options into the mix can push these efforts even further. For those not already tagging at the source, it can also reduce the number of hard tags that need to be applied in-store. For those that are, thoughtfully deploying a mix of tags and labels can reduce the need for extra cashiers at peak hours without sacrificing insights. Even better, this comprehensive view further informs labor allocation on the floor by highlighting friction wherever it arises.

  1. Streamlining distribution.

Tagging items at the source helps retailers visualize supply chains, identify areas for improvements, and streamline fulfillment. However, hard-tagging merchandise at the manufacturer comes with the risk that already-tagged items get shipped to consumers—a generally unwelcome surprise. When distribution centers only hard-tag the most at-risk items and those likely to be sold in stores (like name-brand handbags, for example) while forgoing hard-to-remove tags on other merchandise, they are more prepared to fulfill e-commerce orders promptly and without mistakes.

  1. Optimizing checkouts.

Overuse of traditional hard tags for tracking and protection can lead to friction at checkouts, both self-service and traditional. Removing tags takes time, and those precious seconds add up quickly. And self-checkout doesn’t lighten the load, as customers are often unable to remove them without employee assistance.

To avoid this, many retailers that run self-checkouts—particularly in big box stores with a wide range of merchandise—may forego traditional hard tags on high-risk but popular items to avoid long wait times. Using next-generation one-piece hard tags can help provide that visual deterrent and insight while promoting frictionless self-checkout, as these RFID-enabled pins only release after purchase.

Getting started with smarter tools

Approaching operational improvements through the lens of intelligent inventory management can help retailers shift focus. Taking the first step can be challenging, as years of investments have gone into building current systems. However, retailers exploring the benefits of a holistic approach should remember that the journey to better processes is just that: a journey.

Retailers can start by exploring dual-use tags, which can act as a bridge between legacy technologies (like Acoustic-Magnetic [AM] EAS systems) and RFID-based inventory management. Starting with a blended approach can help allow retailers to expand their inventory intelligence while planning for larger, more widespread investments in the future.

As retailers roll out more diverse toolsets, their insights will only become more valuable and drive more precise operational decisions in turn. Then—and only then—can retailers get to work stopping retail crime, optimizing merchandising, streamlining shopper journeys, and making other strategic improvements for long-term success.

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