Radio-frequency identification (RFID) technology is one of the fastest growing retail initiatives today. RFID consists of electromagnetic tags attached to objects, tickets, assets and merchandise that contain electronically stored information, sensors and antennae.
Through radio waves and hardware such as beacons for proximity marketing or communication sensors, the tags are activated by the reader/antennas which read and emit data. These tags are not only attached to products but also to shelving and display tables within a store and are embedded in many luxury goods.
RFID entered the retail market in the late 1980s, primarily for tracking inventory. Early on, RFID hardware and tags were cost-prohibitive for the mainstream with a price of $1 per tag or higher plus antennae and sensors. In 2015, the RFID market was valued at $26 billion, and innovations within the Internet of Things (IoT) was on the rise. Today, the cost of tags is approximately 10 cents per tag, making it cost-effective for the industry at large.
RFID spans tag makers, sensor hardware, platforms, software and solutions. We will focus on the retail business solutions where RFID creates a “smart product” delivering information, promotions, recommendations, as well as identification and location services.
Luxury brands are embedding technology into their products to identify that a unique item is authentic while mainstream retailers are focused on inventory management, which alone makes the return on investment easy to achieve.
RFID solutions are delivered with the IoT and across the supply chain, streamlining operations, gaining efficiencies, enabling true omni-channel inventory as well as tracking an item from design to delivery and beyond into the hands of the customer for the life of the product. In-store solutions heat-map a store, empower sales associates with product information, provide real-time inventory for increased sales, replenish back stock, deliver promotions and recommendations, and provide personalized customer experiences.
Retailers are also gaining data analytics for conversion from selling floor to fitting room, tracking product journeys and combining this data with customer data for valuable insights. RFID is also integrated with the interactive technology that powers magic mirrors, digital fitting rooms, kiosks and digitizing the selling floor for customer engagement.
Companies such as CXignited was recently acquired by Mojix. CXignited embeds tiny tags inside luxury items including apparel, footwear and leather goods to not only track unique items across the supply chain but also provide authenticity and deliver in-store experiences. Mojix hardware and IoT platforms combined with CXignited solutions provide a comprehensive solution for the luxury and specialty retailer.
Zebra Technologies includes enterprise asset intelligence, RFID products and real-time location systems in its product portfolio. Smartrac offers scalable products connected to the IoT that enable businesses to identify, authenticate, digitize and track merchandise through RFID technology.
Catalyst, a Li & Fung company, offers an end-to-end RFID solution for tagging, inventory, security and customer experiences. Checkpoint Systems is a global leader in merchandise availability through RFID offering software, hardware, labels, tags and connected cloud-based solutions. Impinj offers a solution platform with RAIN RFID connected to IoT inventory and asset tracking, real-time transparency, and item-level visibility and intelligence.
Retailers are experiencing success with RFID. Some recently mentioned in the news include Lululemon, a leading vertical athletics retailer, which has improved inventory and now delivers guest experiences where sales associates locate inventory without leaving the customer’s side, resulting in an increase in sales. It also receives products in minutes and can take a full-store inventory in less than an hour.
Specialty retailer Rebecca Minkoff launched a limited-edition smart handbag with RFID. Not only is it authenticated, but it also delivers loyalty-program perks and personalized promotions to the owner as well as recommendations and invitations to private events. In addition, it utilizes smart mirrors, digital concierge walls and self-checkout to enhance the customer experience.
Leading department-store chain Macy’s claims RFID had a big impact on sales and profitability, reducing out-of-stocks by 50 percent and increasing revenues.
It’s clear that the business benefits of RFID are plentiful. It can streamline highly manual and labor-intensive processes in the warehouse and in-store for picking, packing and receiving by retailers, achieving 99.95 percent inventory accuracy. Retailers enjoy decreased stock-outs, increased sales, real-time accurate visibility and a better customer experience.
We will only see this market grow even more as time goes on. Pricing, availability, software, hardware, and solutions will make it even easier to implement for all of the other markets who wish to see some of the benefits that the retail market is experiencing.
