Customer experience, theft prevention, inventory transparency and more take center stage
RetailNOW panel explores rising RFID use cases
With technologies improving many aspects of retail operations, one longtime standby not to be overlooked thanks to its convenience and versatility is radio frequency identification (RFID). Best known for simplifying inventory management, RFID has evolved to improve the customer experience and boost operating efficiencies by streamlining transactions, preventing theft and raising inventory transparency.
Retail technology decision makers got an update on RFID’s emerging capabilities at last week’s RetailNOW show at Caesars Palace in Las Vegas during a session, “RFID’s Edge: Unlocking New Retail & Hospitality Revenue Opportunities for VARs and ISVs.”
Affordability improves
A key factor driving RFID’s emerging capabilities is the technology’s declining cost.
“We’ve seen this resurgence in the industry of RFID, probably because of costs,” said session moderator Brett Bennett, president of POSitive Technology, a retail software provider. “The price of tags has gone down over 10 times in the last 10 to 15 years.”
The declining cost became noticeable following the pandemic, a period of supply chain disruption when RFID became critical for many businesses, said panelist Duane Roebuck, retail and IoT channel manager at Bluestar, a distributor of B2B electronic devices that sells exclusively to value added resellers.
“RFID was making some strides pre-pandemic, and then during pandemic we had supply chain issues,” Roebuck said. “Those have largely been corrected, but one of the key benefits is that companies like Walmart…leveraging RFID, the cost of the tags have come down…pre-pandemic tags were over 10 cents per tag (on average)… now you’re seeing some, based on quantities, as low as 4 cents and there are some instances even lower than that.”
Theft prevention
The panelists agreed that RFID has made significant progress in reducing retail theft, both external and internal.
“You can combine your point-of-sale with your theft prevention to actually know exactly what is going out the door and when,” Bennett said. “You know exactly which item was taken.”
Beyond determining that an item was stolen, RFID enables the ability to identify what particular product was taken.
“The loss prevention team can target certain items and follow that,” said panelist Jim Schaffer, senior North America channel distribution manager at Bixolon America Inc., a mobile, label and POS printer manufacturer.
“It helps in addition to finding the inventory and locating where it is, but it’s also becoming a loss preventative tool,” agreed Roebuck, adding that RFID antennas are usually mounted on ceilings and around doors.
Gone are the videos of gangs coming into stores and grabbing merchandise, said Roebuck. “You don’t see that as much any more,” he said. “Part of it is because a lot of those retailers have incorporated RFID.
”Two years ago there was a big hit on a San Francisco (Lululemon) store with around $50,000 worth of merchandise stolen,” he said.. “What these guys (the thieves) did is they waited, then tried to return the products to the store in amounts of 5,000 to 7,000 at once…But once they walked into the Lululemon store with the product, it immediately uploaded back into their inventory system and it was flagged, so the Lululemon security was made aware as well as the manager. So everybody was made aware. Police were alerted…they were able to start busting those guys that way.”
Stores such as Macy’s have also integrated RFID with security cameras. “Now, not only can they see what you leave with, but they can go back and trace your whole pattern throughout the store,” Roebuck said.
One retailer, he noted, was able to identify an internal theft ring operated by a 40-year store employee.
Food retail and foodservice benefit
The decline in tag costs is especially beneficial for grocers, a sector that has faced unique challenges implementing RFID.
“Grocery has become a challenge simply because you can’t tag everything,” Roebuck said. The cost per tag in grocery is 5 to 7 cents currently, with larger volume grocers achieving a lower cost.
The ability to track product temperature and expiration dates throughout the supply chain, however, is especially important for both grocers and foodervice.
For perishable items, RFID allows accurate inventory checks in minutes versus hours, with 95% to 99% accuracy compared to 65% to 70% accuracy with traditional methods, according to one case study slide Bennett presented. The tags can store and transmit expiration date information, enabling automatic identification of products nearing expiration.
RFID also provides end-to-end traceability from farm to shelf, which enables compliance with food safety regulations such as the Food Safety Modernization Act.
“Not only do you know where the product is, but you know when it came in, when it expires; there’s a lot more data that you can track now that you know exactly which product is which product,” Bennett said. “Because you’re actually knowing exactly which product is which, you can really drive down to those expiration dates or other identification (information) bits of the item.”
The tags’ ability to trace the product’s temperature across its journey through the supply chain also helps comply with product contamination recalls.
“They can go right to that one location where it’s at and track it to its source,” Schaffer said, then pull the product at that location versus having to recall all products throughout the supply chain.
Faster checkout
Another benefit especially helpful for large venues such as stadiums and special events is faster checkout.
RFID enabled self-checkout kiosks at several NFL stadiums have improved transaction times with speeds reaching 28.5 seconds per transaction, according to a slide Bennett showed, while event managers can boost customer throughput to 72 hours per customer per hour per kiosk, translating to 1.2 customers per minute.
Customer experience
Panelist Mike Nicholson, principal and co-founder at POSitive Technology, noted the benefits of Geiger Counter functionality on RFID readers that allow users to determine the location of an RFID tag within a certain area. This can come in handy when a retailer needs to find an item in a large storage area.
“The Geiger Counter functionality allows you to go and say ‘here’s the serial numbers left in inventory for that particular size jersey and you start wandering around the room and it’ll beep louder and start to point towards it as you get closer to it,” he said. The user types in or clicks on an RFID tag’s EPC number. Once the tag is in range, the reader will beep louder the closer it gets to the tag.
“It’s really a major customer satisfaction addition as well, because nobody wants to turn down that rabid fan when they’re standing there going, ‘can I get this?,’” Nicholson said.
Speed also translates to ease of use for the customer.
“Because of the ease of use, the customer is adding more to the basket,” Nicholson said. “Prior to RFID, we were pretty much seeing a 1.7 items per transaction…Today we’re seeing that start to increase another single item, which is a huge impact to the revenue for the team.”
Market opportunity
The panelists advised listeners that opportunity exists in supplying RFID tags as demand for the technology expands.
“Once you get RFID installed, what do they need? Tags, continually,” Bennett said. In the meantime, he said manufacturers and distributors of some products are starting to put the tags on the products for retailers, which will further drive tag prices down.
For RFID suppliers, Roebuck said the opportunity is through collaboration with players who don’t have RFID expertise.
“There are going to be some sourcing changes here,” Nicholson said. “A lot of manufacturing capabilities are already in progress.”
While prices are expected to continue to decline, Roebuck said it’s important for users to consider more than the price of the tag.
“Really vet out the tags because you may save over one tag and you may get hurt over a bunch of other ones,” he said.
Cover photo: At left Duane Roebuck, Bluestar, Jim Schaffer, Bixolon America Inc. and Mike Nicholson, POSitive Technology.
