RFID in retail is an efficient and effective way of simplifying your retail inventory process. RFID (Radio Frequency ID) is a wireless technology with two main components: tags and readers. The retailer places the RFID tags on items — and these tags give signals to RFID readers. This information is then processed by inventory management software, allowing real-time visibility and control of your stock.
Given the drastic changes we’ve seen in retail and supply chain issues in the last couple of years, RFID wireless technology has now become vital. RFID makes it much easier to track inventory throughout your supply chain — from the warehouse shelf to your retail stores. And the best part? It makes it much easier to reduce costs.
Here’s how it works and why it’s essential for your omnichannel retail success.
“RFID tags and handheld readers allow you to accurately track and identify objects from a distance — not just in-store, but at every step along the supply chain.”
How does RFID work in retail?
Far more advanced than traditional barcodes, RFID tags and handheld readers allow you to accurately track and identify objects from a distance in-store — and — at every step along the supply chain.
RFID tags can be applied at the manufacturing point and embedded into price stickers or hang tags. This process serialises all products at an item level, so that each product can be tracked from production to point of sale.
You can use RFID readers in your storage and distribution centres to dramatically improve the speed and precision of receiving goods. Plus, you can quickly and accurately allocate and despatch orders to store.
Better still, staff can use RFID readers to easily perform weekly stock-takes in-store with an inventory accuracy of over 99%.
It’s pretty exciting technology — although having been around for 20 years, it’s not so new. But now, it’s become far more sophisticated and affordable for retailers — and is exactly what they need right now.
"Stores will inevitably serve new roles in the “next normal” shopping journey, and retailers will be ... looking for ways to improve operations and reduce costs... We believe (RFID) has the power to unlock up to 5% top-line growth from better stockout management and shrinkage reduction and 10–15% reduction in inventory-related labor (sic) hours." – McKinsey: RFID's renaissance in retail
How does RFID fit in with omnichannel retail?
Omnichannel retail allows all data to be centralised and visible in real time. Omnichannel software has myriad well-known benefits for both customers and retail business owners. For example, your staff know where stock is located (and can sell more) and you can display live stock levels online (giving customers a better experience and you more profits).
But since suffering the retail setbacks of Covid, skyrocketing fuel prices and inflation, supply chain and stock control issues have dominated centre stage. As industry researchers McKinsey report, retailers are changing how they operate and choosing their physical stores (not warehouses) to be the backbone of operations.
All this change requires some serious operational savvy: the sort of savvy that only RFID technology and omnichannel software can provide. These advancements end traditional manual data-entry processes and automate all data capturing, so that inventory levels are always accurate.
Plus, by using inventory management software, you can leverage powerful inventory optimisation and automated replenishment features to minimise understocks and overstocks.
In addition — you end up saving hours of unnecessary admin time.
But it gets more exciting ...
With an RFID retail solution, you can:
- Identify and track objects from a distance, almost like pointing a space-age laser gun at your stock — whether in a pallet, case or retail shelf. (This is a vast improvement on previous ‘line of sight’ technology, meaning the scanner had to see the barcode to read it.)
- Hold more data in the tags than traditional barcodes, enabling more accurate information at every stage of the supply chain.
- No longer worry about moisture damage. RFID tags are often weatherproof, making them less susceptible to damage during packing, shipping and receiving.
Benefits & competitive advantages of RFID in retail stores
RFID tags and scanners give retailers the operational finesse they require to succeed today. Retailers need the most sophisticated, precise and unified systems, which is why RFID is now becoming exceedingly valuable for retailers.
Start using Radio Frequency ID, and look forward to:
Avoiding understocks and overstocks
Did you know that 8% of all retail products are out of stock at any given time, according to Harvard Business School? You can avoid this by using RFID to count inventory fast, often and accurately.
Once you input this data into your centralised omnichannel software, you’ll know where all the stock is. You can maximise stock availability and prevent out-of-stock situations. There’s no more expensive overstocks and no disappointing understocks. That’s what we call a win-win.
Improved omnichannel fulfilment
Omnichannel retail maximises your sales by offering the right amount of stock in the right place at the right time.
But how do we count our stock?
Traditionally, warehouse inventory counting has never been much of a problem and had a high accuracy of around 99%. But in-store, this number drops to a staggering 65%. RFID technology in retail can drastically improve accuracy to offer better customer experiences and sell much more.
Reduced shrinkage
You can minimise all those nasty issues retailers hate: supply chain errors; shoplifting and employee theft —these problems are much easier to spot and manage with end-to-end visibility and accurate monitoring via RFID.
Next steps (adding RFID to your retail tech ammunition)
Retailers must keep up with the “new normal”, particularly with those critical supply chain and inventory management issues we are currently facing. If you’re still adhering to outdated manual processes, take a look at how RFID technology could help you:
- Streamline your operations by digitalising your stock-take and inventory control processes
- Save time and wages by tracking and counting your inventory faster and with greater accuracy
- Speed up the fulfilment process and enjoy optimal precision by using handheld RFID readers in storage and distribution centres
- Avoid overstocks and understocks by having the correct data and leveraging automated replenishment
- Maximise customer satisfaction by accurately allocating the products they want
Find out more about the deep integration between Retail Express omnichannel software and RAMP RFID. Get a free, personalised demonstration today.
