Benefits of RFID Technology in Retail Industry


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With the rapid development of the economy, the retail industry has undergone a dramatic transformation in recent years. In particular, with the rise of e-commerce and innovative technologies, the retail world has become hot pets in the market. As online shopping has become a new trend of shopping, traditional retailers are facing significant pressure to cope-up in the competition. Retailers are always looking for ways to manage their inventory as efficiently as possible, to distinguish themselves from the competition and to enhance the shopping experience. For this reason, RFID technology is rising in the retail industry. According to a strategy consulting firm, Kurt Salmon, “Retailers that have adopted RFID tagging have achieved a sales increase of 3% to 10% due to this technology”. Some of the well-known cases are John Lewis, Mark & Spencer, Macy’s and Levi’s Brazil. However, very few of the retailers understand how important this technology is for their business to grow.

RFID stands for radio frequency identification, an automatic identification procedure by radio. This versatile technology uses radio waves to read and capture the information stored in the tag of the specific product. With regard to retail and inventory management, this technology has become an unstoppable force. In fact, it is estimated that 96% of retailers use RFID technology to tag and track clothing.

Whether you are running a large-scale operation or a family store, this article will give insight into how RFID technology can help you improve your load management.

  • Automatic scanning for accurate inventory management 

RFID technology can effectively track products throughout the supply chain. For example, RFID tags are already programmed and installed by the manufacturer. Then, through RFID reading points – for example, portals – these tags are scanned when they leave the factory, when they arrive at the distribution center and when they leave for the retail store. The final scan is then done when the goods arrive at the retail store and go through the checkout. This accurate record throughout the product lifecycle enables complete and efficient inventory management.

  • Improves Inventory Accuracy

Nowadays most of the retailers are adopting an “omnichannel retail strategy” which means the customers can choose the product online and then can pick up their products themselves in a physical store. Of course, this click-through and pick-up strategy depends on the accuracy of each store’s inventory count. In other words, if the system shows that there are two units of stored goods in a store, but the fact is that there is no inventory in the store. Thus, when the customer appears in the store and doesn’t find the chosen product, the whole scenario gets very embarrassing for the customers and the retailers. It also gives the customer a very bad experience of shopping. To tackle this embarrassing situation, retailers are using RFID technology which tells about the exact location of the product along with the quantity.

  • Provides Protection against robbery

The RFID technology allows anti-theft detection labels associated with store alarm systems. For example, clothing stores are traditionally favorite places for shoplifters. RFID is an effective way to secure products. With an electronic chip equipped with an antenna, the RFID tags are able to store large quantities of product information such as the date of manufacture, shipping, serial number, price, size, color, etc. Thus matching this smart tag to an alert system at the exit of any store, where the security staff can be alerted when a product is stolen from the store.  With this smart anti-theft strategy, you can catch thieves red-handed, make your store theft-resistant, and reduce losses.

Wrapping Up

Looking at the cases mentioned above, gives the impression that RFID in retail is a player in the retail world, right? Yes, but that does not mean that you in your enterprise can no longer take advantage of this technology. By adopting tags and data collectors that feature this technology, you can streamline inventory and inventory management processes more efficiently.


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