RFID: Why it should matter to Retail

Radio Frequency Identification (RFID) tags are more and more replacing the existing barcode ticketing. The technology has been available for quite some time, but the concept of tracking products with the help of RFID tagging didn´t really catch on, primarily because RFID equipment prices (both labels and devices) have been too high to offer true competitive benefits for early adopters. However, as RFID technology has evolved and become more mainstream, prices have come down and today it offers interesting alternative for retailers that want to improve their customer service and operational margins.

Gain a Holistic View of the Product Journey
Standardization of protocols support the adoption and utilization of RFID tags with an Electronic Product Code (EPC) designed to track product data around the complete supply chain. Tagging items, identifying the product type or SKU and making them unique with an SGTIN (Serial Global Trade Item Number), retailers are able to capture, store and access data and events which have been created at different places in the supply chain. As every product is uniquely serialized, all physical movements and major ‘events’ can be fully tracked:

– Timestamp of the event

– Manufacturing and environmental data (expiration, temperature, etc.)

– Transactional data (e.g. invoices)

– EPC product master data

– Location (GLN or SGLN)

– Product state (e.g. sellable, inactive, sold, etc.)

– Business process step (e.g. receiving, shipping, etc.)

Distill Supply Chain Data into a Single Repository
As described on GS1’s site, standardized formats like GS1 EPCIS allow trading partners to share information about physical movements and status of products as they travel throughout the supply chain, from business to business and ultimately to consumers. Such a repository can act as a data hub for other applications, delivering product status information to Merchandize Management systems, Analytic systems and/or to an ERP system. Messages which have been captured may contain information like:

– Timestamp of the event

– Manufacturing and environmental data (expiration, temperature, etc.)

– Transactional data (e.g. invoices)

– EPC product master data

– Location (GLN or SGLN)

– Product state (e.g. sellable, inactive, sold, etc.)

– Business process step (e.g. receiving, shipping, etc.)

These repositories can meet real-time data demands by supplying powerful system connectors.

Enhance Stock and Inventory Management
Manual barcode scanning for stock taking and preparing inventory is a time-consuming process and by itself sometimes a source of errors. Often, additional staff is needed to ‘count items’ in-store, and many retailers respond to these challenges by conducting the process less often. This infrequent stock taking tends to increase inventory differences (i.e. the numbers of item in stock according to the merchandize management system differs from the actual number of items in stock) and also inhibits recognizing theft in time.

RFID´s abilities to track stock data are quite different from what retailers were able to do in the past. With the right devices in place, retailers can conduct “just-in-time” inventories, receive daily alerts for out-of-stock items, and have better visibility to theft. Overall, it becomes much easier to provide better customer service while driving smarter processes for ensuring product availability.

Improve the Check-Out Experience
In the battle against long checkout lines, RFID tags can play a critical role, as placing RFID-tagged products on a reader enables the device to scan a group of product codes at once, drastically reducing the time customers spend checking out or waiting to check out.

On the other hand, if most items in the store are labelled with an RFID tag, it´s also possible to make a profitability assessment of the store´s checkout area and optimize the store layout accordingly.

Drive Better Fraud Control
RFID tagging enables Electronic Article Surveillance (EAS) systems to read the SGTIN information of an item once, and then in real-time request the status of this unique item from an EPC repository. So if the sales process in the checkout area has changed the status of the item to “sold,” retailers can see the change in status in real time. And if the EAS reads the tag and the item status does NOT say “sold,” but the item is being removed from the store, the system can send an alert. Without any additional labeling, RFID technology is able to offer real-time notification of security breaches.

RFID Tagging in Food Retail: Big Opportunities Exist
In the past, discussions tended to focus on tagging higher value products, which led to RFID technology most commonly being adopted in a fashion environment.

The globalization of food supply chains, however, has impacted how retailers manage distribution and stock. Grocers not only maintain stock of thousands of different items, they also have to monitor perishable items like meat, fish and poultry throughout their stores. The ability to track supply chain processes so closely means that RFID technology can support reducing in-store waste and, especially in this segment, also improve productivity and  reduce labor costs dramatically, e.g. because of the elimination of manual and visual verification of each product received at the retail store.

RFID is now at a competitive price point, and allows retailers to reap the benefits of improved checkout experiences, better fraud and theft control, lower stock and inventory costs and enhanced product information for consumers. The retail industry is moving toward standardized tagging, and longer term, we’ll see non-removable, un-destroyable labels integrated directly into products so that even low-cost items—like vegetables and other food retail items—will be trackable from beginning to end.

Have you considered how RFID tagging might enhance your retail strategy? Let’s discuss the right way to implement this technology to drive efficiencies and growth for your store network.