Have Retailers Really Opened the Doors to RFID?

RFID and retail: at this point, there is no denying, they are becoming an inescapable pair. But what is it that makes a retailer adopt this technology? And what stops him from doing so instead?

Now we will let our RFID Specialist speak.

Let us start off with figures: in 2018 Accenture published a study extracted from a survey by Kurt Salmon Associates, who had interviewed 110 global managers in the retail sector.

Surprising results, but not so much for those who belongs to this world: 69% of those interviewed reported a significant level in RFID technology adoption. A first answer comes by itself: the increase in use on a worldwide level convinces competitors much more than any other data about investment profitability. But if this is not enough, there are other aspects in the motivational top chart:

  • Frenzied research to satisfy multichannel exigencies
  • Customer Experience improvement
  • Stockpile and Inventory accuracy

Let us analyse these 3 motivations in a more profound way:

Omnichannel

85% of the retailers interviewed offer at least one omnichannel purchase method to their customers and the highest management costs are those related to shipping organization, above all when warehouses are distant. It seems commonplace, but splitting shipments has a terribly high cost, stunningly increased by free returns. Well, RFID reaches one of its maximum performances precisely in constantly monitoring our stockpiles. Being able to know where my products are at any moment allows me to pass this precious information to my customers: “Dear customer, check from your home whether the product you are searching for is in a given store, or order it online and collect it anywhere you choose.”

I will always remember this sentence as a kind of mantra: “an article which is not exposed to the public is a missed sale.” Pity an RFID system would have told you in time, dear Store Manager!

Customer Experience

Directly related to the previous point, RFID is helping retailers to combat online sales knights. It is a paradox, because they have been forced to make themselves similar to their “enemies” but in a different way, making traditional sales become a kind of purchase augmented reality. Additional information layers enrich our purchases with the help of a small electronic label. And let us not be charmed by superfast cashdesks where shop-assistants literally throw our items into magic baskets. That is the simplest and most immediate thing, but behind the scenes there are complex systems which control the flow of my product from birth to sale, maybe also guaranteeing its authenticity.

Stockpiles and Inventories

It is maybe the most complex aspect but the most spectacular one at the same time, the famous ticket that is worth the price. Have you ever seen a store manager who sees the stock of his point of sale in real time for the first time? Without having to wait for approximate night reports? He shows a most beautiful face. And the assistants responsible for replenishment without having to count garments one by one and walk about warehouses for hours? They look 5 years younger. Not to mention higher levels where, thanks to BI, sale, stockpile and transfer monitoring becomes much more immediate.

Just a note on data accuracy before and after RFID. We move from a 60% average up to tips of 98%. This means always knowing how many garments I have got in a given point of sale, how many are exposed to the public and how many remain in warehouse. It means not having to engage resources for days on end to “shoot” barcodes or deciding to make an inventory of just some of my articles, making my ERP produce approximate forecasts.

And yet all this does not seem to suffice, especially in Europe, taillight in the RFID retailer lovers classification. We are those who lower the percentages mentioned above, that is, we are at 30% adoption level, compared to 92% in the USA. Ample growth margins ahead but, above all, a huge conviction work to be done in our horizon, ROI at hand.
And this is precisely the topic of my next article.

Alberto