As retailers and brands seek greater inventory visibility, radio-frequency identification (RFID) technology continues to play a more significant role in the market. The technology is also becoming more cost-effective.
Here Pat Glennon, vice president of North America Retail Sales at Zebra Technologies, shares insights into the technology, how it is being deployed and how RFID improves the shopping experience.
WWD: How has RFID technology changed over the past decade? Are the chips less expensive? What’s new?
Pat Glennon: Over the past decade, RFID technology has significantly evolved and greatly impacted the dynamic of operations across various industries such as retail. Processes like cycle counting in stores and warehouses used to solely focus on counting pallets and cases but with recent advancements in the technology, cycle counting can now be done at the item level. Hardware and tag providers have contributed to the technological progress by improving data-scanning performance and tag sensitivity, allowing modern RFID solutions to routinely achieve 98 percent-plus accuracy for cycle counting.
In terms of pricing, costs have come down and implementations are easier. RFID use in retail has been accelerating in the past few years with both retailers and suppliers deploying RFID and realizing very good return on investments (ROI). Most of these deployments have leveraged handheld RFID readers, which have proven to be flexible, easy to deploy and cost-effective. Recently, pilots with newer technologies, such as overhead RFID readers, offer the promise of a more automated and continuous real‐time view of what is happening in the store, enabling use cases beyond optimized inventory management and enabling new shopping experiences.
WWD: Why is the omnichannel experience important for retailers?
P.G.: Shopper demands and expectations are continuing to increase every day and customers expect to have a seamless experience whether it be online, in-store or both — making the omnichannel experience a core element for effectively competing in the market. Retailers are focusing on executing their omnichannel strategies by expanding their abilities to provide shoppers with multiple fulfillment options such as ship to home; ship to store for pickup (Click and Collect); and ship from store. In addition, retailers are also investing in creating interactive in-store experience zones to drive shoppers into the store and keep them engaged.
WWD: Given the current retail environment, how can RFID help brands and retailers deliver a better shopping experience — online and in-stores?
P.G.: Out-of-stock merchandise is high on the list of reasons for customer dissatisfaction — which is not surprising amid the rising expectations of today’s technology-empowered consumers who can tap into any retailer’s stockroom right from their smartphones. Zebra’s 10th Annual Shopper Study found that out-of-stocks continue to plague retailers, as 70 percent of shoppers reported having left the store without purchasing what they were seeking.
Other studies show that superior omnichannel support requires 90 percent inventory accuracy or greater. Currently, retail inventory accuracy hovers around 65 percent. However, RFID platforms can help increase inventory accuracy to 98 percent, while out-of-stocks can be reduced by 60-80 percent with item-level RFID tagging. By significantly increasing cycle count through fast and accurate scanning of inventory and cross-referencing databases to see what’s available in the store in real time, mobile RFID technology can reduce out-of-stocks, which not only decreases lost revenues for the retailer but also improves the shopper’s experience and determines whether they will continue to be a customer or go elsewhere.
Ultimately, inventory visibility is a critical element to consider if retailers want to roll out an effective omnichannel strategy and leverage their stores for fulfillment.
WWD: Is 100 percent inventory visibility possible with RFID? And why is having high inventory visibility key to today’s business?
P.G.: Inventory accuracy is the cornerstone of an omnichannel strategy and is critical to the success of retailers today and moving forward. RFID technology is a highly accurate solution for inventory visibility and as the technology continues to mature, we expect to see much higher rates of accuracy become possible. In 2017, Zebra launched SmartLens for Retail, a solution that combines RFID, video and micro-locationing technology to identify and track the journey and location of merchandise, associates and shoppers in a retail store in real time. With SmartLens, we can estimate 99 percent inventory accuracy for items tagged with RFID. This is a result of constant inventory monitoring and sensing from receiving, to back room, to store floor, to the sale of the item and enables retailers to achieve optimal stock levels as well as improve the shopper experience and increase loss prevention.