Vertical Markets

RFID in Retailing

by Mark Rowe

Retailers are using RFID technology in-store to improve profitability. That’s according to a report, Utilising RFID in Retailing: Insights on Innovation, authored by Emeritus Professor Adrian Beck from the University of Leicester and the ECR Retail Loss Group and supported by the product manufacturer Checkpoint Systems. More retailers are seeng the benefits of RFID, the report suggests.

The report claims that as businesses are becoming more established in their use of RFID-generated data, they are gradually incorporating more use cases into their business-as-usual practices.

In particular, more and more retailers reported using RFID to streamline the audit process (as an alternative to infrequent organisational stock takes), which not only delivers cost savings, but provides more regular insights into the status of inventories. It also found that using RFID was having an impact on store processes. While RFID has always been key to inventory accuracy, some companies are now using this data to further improve business activities such as reducing phantom out of stocks, improving rapid stock search and find tasks and developing ship from store (SFS).

Beyond the more traditional retail model, RFID was seen as a key facilitator in delivering omni-channel retailing by those questioned. Without the inventory accuracy offered by RFID, few retailers believed they could reliably use their stores as fulfilment centres to output online orders. Indeed, one retailer admitted to only making RFID-enabled store stock available for this purpose. The use of RFID to improve online order accuracy is also becoming more commonplace, to reduce errors in the picking and packing process, therefore improving customer satisfaction. One retailer reported a 90 per cent reduction in incorrect orders and customer complaints since introducing RFID into the process.

As for the future, one area where RFID is starting to be tested is self-checkouts (SCO). While limited due to the need to have 100pc SKU (stock keeping unit) tagging, retailers are starting to recognise what the technology could offer – increased speed of checkout, reduced likelihood of double scanning and thereby improved customer service. Another area where retailers also reported using RFID was loss prevention. While none of those interviewed argued that reducing loss was the primary reason for investing in RFID, many acknowledged they were using the technology to tackle refund frauds, enable dynamic loss product profiling, manage e-frauds and identify stolen products.

Prof Adrian Beck said: “Previous research has shown that in the appropriate retail context, RFID technologies can deliver clear-cut benefits in terms of inventory accuracy and the provision of valuable data. In this study we wanted to find out how its use evolved over time – understand what innovation looks like as well as delve into the benefits and limitations of the technology. While some retailers are certainly pushing the boundaries when it comes to RFID usage, others have adopted a much more incremental and gradual approach to its application.”

And Mariano Tudela, VP Europe Sales, from Checkpoint Systems added: “It is great to hear that companies are looking beyond the traditional benefits of RFID to find new and innovative ways to use the technology and it will be very interesting to see how this develops over the coming years. One of the key evolutions for RFID recently has been in omni-channel retailing, and particularly following the covid-19 pandemic, it is an area that we expect to see taking off in the future. RFID technology is the only way to ensure a successful omni-channel strategy, and retailers that don’t adapt their offering are likely to be left behind. With decades of expertise, Checkpoint Systems is market leader in RFID technology making it any business’ strategic partner of choice.”

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