On the RFID Bandwagon? Here’s How Retailers Can Ensure the Investment Pays Off

The ‘90s aren’t just back in the form of plaid flannels and wide-leg cargo pants. For retailers everywhere, the past few years have seen a resurgence of RFID as the solution to many of their most pressing challenges. Need more accurate inventory tracking? RFID. Customers want seamless self-checkout? RFID. Theft levels constantly on the rise? RFID.

An Accenture study revealed that 93% of North American retailers have recently been using or piloting RFID. This is a drastic increase from 34% in 2014. And since the start of 2022, several prominent retailers, including Walmart, Target, Macy’s and Nordstrom, have instituted RFID tag mandates for their affiliated partners and suppliers. The notable surge in RFID adoption within the retail sector prompts the question: What factors are driving this seemingly sudden growth in RFID utilization within the retail industry? And, perhaps more importantly, are the retailers adopting RFID using it effectively?

What’s old is new again? Not exactly.

Over the past two decades, RFID technology has experienced notable enhancements in readability, range and affordability. The typical cost of an RFID tag has seen a remarkable reduction of 80%. RFID readers have dropped in price by over 50%. And at the same time, read accuracy has more than doubled, and the operational range has quintupled. 

Plus, the timing is just right. RFID technology now stands ready to cater to the specific use cases that most often occupy the minds of retail executives everywhere, in every sector: enhanced omnichannel capabilities, data-driven operations, real-time merchandising analytics for better planning and allocation, heightened accuracy, and customer-centric shopping experiences.

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The inventory accuracy jump

Achieving ~90% inventory accuracy with RFID technology can absolutely help retailers boost the top line and reduce hourly labor costs. Yet, the jump from 90 to 99% accuracy is significant in terms of profitable growth and overall operational benefits. 

Presently, most retailers using RFID depend on scheduled cycle counts (monthly, weekly or daily) to achieve “snapshot” or “point-in-time” inventory visibility. However, many leading brands like COS (H&M Group) have seen that instant or real-time visibility (exceeding 99% accuracy) is the linchpin for an enhanced customer experience and industry-leading operational excellence. 

5 ways a real-time platform gives retailers a competitive edge

With an AI-powered software platform, retail stores can maximize the value of their RFID investment. A real-time RFID data feed can automatically generate and assign the optimal tasks, layouts, promotions, processes, analytics and insights. The move to real-time inventory visibility and management:

1. Empowers store associates to help customers find and purchase desired items in-store, leading to higher customer and associate satisfaction. Advancements in RFID technology, coupled with an AI operational platform, enable 98% or better inventory accuracy and location precision of up to 3-4 feet. Store associates know exactly where every article is, on the floor and in the backstore (even when an article isn’t where it should be).
   
   
2. Reduces the strain that daily or weekly cycle scans put on operational bandwidth
   
   
3. Plays a pivotal role in expediting the transition to complete omnichannel integration. Precise in-store inventory data facilitates quicker, more seamless processes such as online purchases with in-store pickup (BOPIS) and curbside delivery.
   
   
4. Allows retailers to adapt more quickly to supply chain disruptions
   
   
5. Enables contactless checkout options, creates cross-sell opportunities and opens doors to innovative customer experiences

RELATED READ: Getting Customers in the Door with AI-Enabled Experiences

Is it time to take the real-time inventory leap?

In conclusion, the resurgence of RFID technology in the retail sector can be a transformative solution to critical retail challenges, from accurate inventory tracking to enhancing customer experiences. And while achieving 90% inventory accuracy is valuable, the real magic happens when you exceed 98-99%. Real-time visibility through an AI-powered software platform is the keystone for operational excellence and improved customer satisfaction. It reduces strain on operational bandwidth, empowers store associates, expedites omnichannel integration and enhances adaptability in a volatile supply chain landscape.

So, for retailers looking to make the most of their RFID investment, embracing a real-time platform is the way to provide the sort of innovative, data-driven and customer-centric shopping experiences that will continue to define success in 2024 and beyond.