Use cases of RFID in retail
1. Store level inventory process and data improvements
- Improvement in overall accuracy. RFID can transform in-store inventory accuracy to upwards of 98%, approaching that of warehouses. The typical retail inventory process is very manual, time-consuming, and only done at predetermined intervals. Historical data shows that for every ~3% improvement in in-store inventory accuracy, you can expect a ~1% increase in sales. Typical retailers operate at ~70% accuracy by year-end (2–3% reduction in accuracy per month), leaving significant opportunity for positive impact on sales.
- Receiving . Because RFID antennas and wands do not require line of sight to scan RFID tags, shipments to the store can be instantly and accurately received into inventory. This is a huge win compared to time-sucking individual carton and item scanning, or even worse, blind receipts.
- Finding items. Handheld RFID wands typically have the ability to track items in the store using a system akin to metal detectors, beeping faster as the wand approaches a given item. More complex systems of fixed antennas throughout a store can also be set up to pinpoint a specific tag’s location.
- Cycle count time . Since line of sight is not necessary and RFID antennas can work at a distance, a cycle count can be done significantly faster and more accurately than any traditional processes.
- Removal of formal inventory counts . RFID readers are accurate enough that RFID-based inventory counts may be allowed by auditors after showing a history of accuracy.
- Auto reorders at safety stock levels . Because overall accuracy is improved, rules for replenishment orders can be set and forgotten, with no more need for manual spot checking or ensuring replenishments are needed.
2. Store operations
- Spread breadth of available products while reducing depth . With a product like men’s jeans, one style may have ten different widths, ten different lengths, and ten different colors. It can be virtually impossible to keep any significant amount of inventory for all variations displayed. Inevitably, many will stock out on the floor and others will have no movement. This may change on a day-to-day basis with some trends, but not enough to make impactful floor inventory decisions. With RFID in place, employees can be notified when a specific combination is no longer available on the floor (or has low inventory), where to find it in the backroom, and exactly how many to pull, on a nearly instantaneous and continuous basis.
- BOPIS and ship from store. Both buy-online-pick-up-in-store and ship from store are customer expectations approaching a must-have capability for retailers. If a business can’t trust its inventory accuracy, it cannot consistently deliver these capabilities. In simplest terms, without accurate, real-time inventory counts, a retailer could be selling an item for pickup that isn’t actually available in the store.
3. In-store traffic patterns
- Customer and product flow . By aggregating and plotting RFID item movement throughout a store, retailers can begin to draw conclusions about how people and products navigate the physical confines of the space. Benefits may include monetizing high-traffic endcaps, tracking in-store cart or product abandonment, removing physical pinch points, and understanding how certain product categories or items correlate to different paths in the store at different times of day, days of the week, etc.
- Associate flow . Whether for training purposes or data collection, RFID tags can be used to track employee movement throughout a store.
- Equipment flow . Whether its forklifts at a home improvement retailer or a restocking cart at a clothing store, valuable data can be gleaned from seeing how equipment flows through a store’s physical space.