Is RFID the Future of Retail?

Is RFID the Future of Retail? 

What I learned at the NRF’s Big Show in New York City

In mid January, I made my way to New York City, along with 35,000 others, to see what exciting trends are starting to emerge for those in retail at the National Retail Federation’s Big Show. The show was jam packed with attendees and exhibitors and after a few days of walking the floor, I can tell you one thing – it’s all about technology.

Of all the solutions demonstrated at the show, what really drew my attention was RFID, or radio frequency identification. From upgrading the retail shopping experience, to improving inventory management and multichannel fulfillment operations, RFID offers incredible opportunities for brands to engage with their customers, increase sales and become more efficient in their daily operations. NRF truly highlighted how RFID is becoming something all brands should look to incorporate to continue seeing increased profits and customer satisfaction.

Here are three ways RFID helps streamline operations:

The Customer Experience

Imagine your customer walking into your brand’s retail location, picking up a pair of pants that most appeals to them and not being able to find a sales person to answer questions or find the right size. That’s not the experience they were hoping for and it most likely will result in a lost sale. With an RFID chip embedded into a product or on a tag, your brand can turn to automation and let technology assist your customer. Using an RFID scanner, your employee (or even a robot) can instantly access a POS screen that already knows what item your customer is holding in their hand. The screen can play a corresponding video, answer questions or give the consumer the ability to read information about the product and order it in a few simple clicks. Should the consumer not find the product in the specific variant they’re looking for, RFID can quickly let your POS know where the item is located and how soon your customer can have it delivered to her doorstep. It’s a great way to ensure customer satisfaction while at the same time enhancing your omnichannel strategy.

Using an RFID scanner, your employee (or even a robot) can instantly access a POS screen that already knows what item your customer is holding in their hand.

Inventory Management Accuracy

Knowing exactly what products you have in stock at your retail locations and your fulfillment center is critical for inventory management. Having accurate inventory data at your fingertips allows you to forecast purchases, returns, and determine the overall health of your brand’s business at any given time. In addition to inventory management, RFID also helps with retention. Typically, in a retail setting, inventory is entirely a manual process with associates tallying what’s in stock on shelves, in the backroom, and what’s been received, by hand. Manual counting inventory is not only a timely process, it is also prone to human error. Moreover, according to Dr. Bill Hardgrave, dean of the College of Business at Auburn University and former director of the RFID Research Center, the average inventory accuracy rate is in the range of 60% - 65%.  Is this an acceptable number for your brand?

With RFID tags on each product and with the appropriate infrastructure on the backend (i.e. readers, antennas, etc), a brand can bolster inventory accuracy across the board. Brands such as Lululemon and Adidas are seeing tremendous success with their implementation of RFID. With handheld scanners, sales associates are quickly updating the status of merchandise once it’s received, then again once it’s placed on shelves, and once more when the goods are sold. This is all data that’s captured with precision and immediately available and accessible to the brand for tracking, management and forecasting.

A Smaller Footprint

With the future pointing to showroom-based stores, RFID can help retailers and brands by lowering the amount of inventory a store has to carry. With this in mind, a showroom would only need to stock enough inventory for customers to try an item, and using RFID, approach a kiosk and order it in store to be delivered to their doorstep. On the backend, RFID tells the POS where the item is located and if it is located in multiple warehouses, it can choose one closest to the customer’s delivery address thus alleviating high shipping costs and long delivery times.  Showrooms also help with the rising rent costs of physical retail stores. Brick and mortar stores are often expensive to operate simply from a real estate perspective and the reality is that many brands are downsizing them so that they can invest in more valuable things like engaging more with their customers and ensuring they have the best experience possible.

After touring NRF’s Big Show this year, I found that this type of technology is really the future of retail. With RFID leading the way and robotics following suit, more technology will be incorporated into the way customers shop and experience a brand.  I encourage you to look more into the new technologies and applications available to ensure your brand is ahead of the curve.

To learn more about how to leverage technology in your eCommerce business, click here.


By Rob Coon, Head of Sales & Marketing