Benefits of RFID in Retail
Table of Contents
With the development of the Internet, RFID tags are also being used more widely, with a higher penetration rate in the retail industry. Whether it’s in supermarkets, the clothing industry, the food industry, and so on, from the supply chain to sales and after-sales, RFID tags have brought significant benefits to the retail industry.
Inventory management and visibility
- Improved Inventory Accuracy
Effective management of inventory, including storage, usage, inventory checks, and disposal, relies on detailed and precise records. Maintaining real-time data updates inevitably requires a considerable number of warehouse personnel.
However, in large warehouses, goods are often diverse and disorganized, increasing the likelihood of errors due to the numerous operational steps for each individual. Even during the recording process, errors are highly probable.
RFID tags offer automated and real-time recording capabilities, reducing manual input errors, significantly enhancing inventory accuracy, and showcasing precise data.
- Enhanced Inventory Control
The adoption of RFID can reduce the number of personnel required, facilitating the implementation of a more effective accountability system.
This helps to prevent losses and damages caused by a mix-up of personnel or improper operations, ensuring the identification of responsible individuals and safeguarding the company’s interests.
The use of RFID tags allows for precise recording of inbound and outbound timings, quantities, and relevant personnel, thereby assisting your company in strengthening inventory control.
- Strengthened Loss Prevention Strategies
Product expiration and misuse contribute to significant losses in inventory. The application of RFID tags in the retail industry provides warehouse personnel with clearer visibility of product expiration dates and remaining quantities, while setting reminders beginning several months before expiration.
This enables your staff to respond promptly, and initiate discount or promotion activities for the corresponding products to avoid wastage.
Operational Efficiency
- Reduced Labor Time and Costs
RFID technology enables rapid, bulk reading of information from tags, significantly reducing manual labor time and costs. Whether in counting or locating processes, it can quickly and accurately provide information to your employees.
Improved efficiency and labor savings lead to a significant reduction in operational costs for your business. Moreover, the reduced likelihood of errors during operations helps prevent major losses.
- Reduced Checkout Queue Length
The application of ultra-high frequency electronic tags allows your employees to read multiple tags at once during the checkout process, unlike barcodes that require one-by-one flat, clean, and perpendicular positioning for scanning.
By utilizing RFID tags, the length of checkout queues is significantly reduced, making your employees’ work more comfortable and enjoyable and fostering a greater love for their work.
- Automated Checkout
In the event that queues at the checkout during holidays are unable to meet your customers’ demands, you can also implement an RFID tag automated checkout system.
By placing all items in a designated location, the reader can identify the tag content of the purchased products, swiftly and accurately displaying the amount on the screen.
This allows your customers to simply pay the displayed amount and take away their purchases, streamlining and enhancing the shopping experience.
- Improving inventory visibility
Improving inventory visibility can be achieved through the use of RFID technology. With real-time RFID data, you can easily compare the required information and make inventory allocation decisions to avoid stockpiling and ensure timely stock scheduling to meet customer demands.
Compared to traditional manual and barcode inventory counting methods, RFID enables faster, more accurate, and more systematic inventory management and allocation. Through real-time data and RFID technology, you can achieve greater benefits and advantages in inventory management.
- Reducing the time for periodic inventory counts
Have you ever encountered a situation like this before: spending 2-3 days every month on inventory counting, involving almost all your employees?
This not only disrupts your normal business operations but also causes considerable hardship for your employees. Furthermore, the manually counted data is prone to errors.
On the other hand, if you conduct inventory counting once every 3 months, you may miss out on the latest data and subsequently lose many business opportunities.
However, by using RFID technology, inventory counting becomes easy and accurate. Your staff can simply use handheld RFID readers to scan the warehouse, collecting all inventory information in no time.
Even with weekly inventory counting, your business operations can continue as usual without any impact.
Enhanced Customer Experience
- Personalized Shopping Experience
RFID technology can enhance your customer shopping experience by offering personalized recommendations.
Customers no longer need to ponder how to combine a particular garment or pair of pants. By simply scanning the RFID tag on the garment at a screen-equipped reader, they can view a model wearing a complete outfit, including coordinated accessories such as bags, hats, and scarves.
This not only provides customers with varied outfit options but also facilitates the sale of additional products, thus boosting your sales revenue.
- Faster and Smoother User Experience
With the help of RFID tags, your store employees no longer need to rummage through the warehouse to find the pair of shoes requested by a customer. No longer will they end up sweaty and exhausted after a prolonged search, only to find that the customer has left due to impatience.
Instead, you can simply allocate a handheld reader to your employees. With a quick scan of the product’s code, they can promptly locate the requested shoes, even in a disorganized warehouse.
Faster try-ons, expedited self-checkout, and a series of seamless experiences will only serve to increase your in-store sales.
- Enhanced Product Information
When your store employees explain a product to your customers, does it often feel abstract and hollow, or do they hesitate due to complex installation processes?
Why not consider embedding a video link into an NFC tag and attaching it to each product? When a customer inquires, they can simply tap their NFC-enabled phone near the NFC tag to view a clear and detailed video, presenting every aspect and step of the product.
This way, customers can gain a clear understanding, even if they forget a step, they can revisit the video after making a purchase.
There’s no need to worry about them memorizing a web address incorrectly and increasing your after-sales support, as they won’t need to rely on memory at all.
- Diversifying Payment Methods
How can you deeply engage your customers to spend more in your store? One effective method is to issue an RFID loyalty card.
Customers can pre-load a certain amount of money and receive discounts or gifts in return. With funds available in your store, even if they don’t have enough cash while out shopping, it won’t hinder them from making purchases at your store.
- Fitting room and magic mirror
When your store experiences high foot traffic and the fitting rooms are often full, do you lose some potential customers who would have made a purchase if they were able to try on items?
Installing RFID mirror fitting rooms can solve this problem. By simply scanning the RFID tags on the clothing with a reader, customers can quickly and conveniently assess how the clothes would look on them, almost like looking in a regular mirror.
This not only enhances efficiency but also significantly increases your sales revenue.
Safety and Loss Prevention
- Enhancing Security and Theft Detection
Have there been instances in your store where small but valuable items have gone missing without a clear reason?
It could be the work of dishonest customers or even a case of your staff being negligent and misplacing items. However, in the end, it is you who bears the brunt of these losses.
By investing a small amount in placing RFID tags on your products, you can receive an alert the moment a tag moves a certain distance away from the reading device.
This way, you can not only identify the culprit but also prevent losses. Isn’t it worth considering?
- Anti-Counterfeiting Measures
After years of perseverance and hard work, you’ve finally managed to establish your brand among a wide customer base, only to later receive complaints about the quality of your products.
You might immediately recognize that these complaints don’t align with the standards of your store, but the presence of your logo on these subpar products leaves you without concrete evidence to convince your customers that these are counterfeit.
However, NFC tags can effectively address this issue for you. Only NFC tags authorized by you can open within your app or validate successfully on your website.
This not only protects your customers’ rights but also upholds the reputation of your brand.
Supply Chain and Process Efficiency
- Supply Chain Traceability
If you have multiple suppliers providing goods to you simultaneously, but later encounter quality issues during sales, identifying which supplier is responsible can be challenging.
The use of RFID tags can easily resolve this issue. By encoding the relevant supplier’s identifier within the tag, only a reader matching that specific tag can identify its contents.
This is especially crucial for managing food, fresh produce, and pharmaceuticals.
- Enhancing Process Efficiency
When entire containers of goods are being received, are you still manually counting box by box? Or, are you able to swiftly record incoming inventory by simply using a handheld RFID reader to scan the entire pile of goods?
Alternatively, by installing fixed RFID readers at the warehouse entrance, the in-and-out movements of whole pallets can be instantly recorded. It’s not difficult to envision the chaos of manual counting, with frustrated truck drivers waiting in queues.
On the other hand, using RFID tags to track warehouse entries and exits ensures a methodical and efficient process. This not only saves you time and costs but also relieves the burden on your employees.
- Improvement in Overall Accuracy
Are you calculating your inventory management accuracy by the box or by the crate? If it’s done manually, even counting by the box can be an enormous task.
However, if you’re willing, using RFID tags can elevate your accuracy to the individual unit level. Simply affixing a UHF tag to each product and scanning it with an RFID reader can provide the most precise inventory count.
This process can be completed in just a few seconds, eliminating the need for 2-3 days of manual counting.
After-sales Support and Operations
- Returns and Replenishment
When a customer comes to your store requesting an exchange for a product, how can you easily determine if it was originally sold in your store?
You might rely on years of experience or barcode scanning, but barcodes can be easily swapped, and experience isn’t foolproof and isn’t suitable for beginners.
This is where RFID tags can provide assurance. The UID number is globally unique, and verifying whether a product belongs to your store simply requires reading the UID.
This approach prevents embarrassment for your customers and minimizes losses for your store.
Additionally, real-time inventory management enables you to quickly ascertain if the warehouse has the item and provide a more accurate timeline for the exchange, rather than delaying with uncertain responses.
Once the exchange information is confirmed, it also prevents other stores from reallocating the item.
- Tracking Pickups/Try-ons and Purchases
When customers try on multiple pieces of clothing, do they all get returned? Relying solely on memory may not be completely accurate, and there may be instances of items getting lost in this process.
If each piece of clothing or pair of pants is tagged with an RFID label, even a pile of items can be quickly identified.
This eliminates the need for customers to wait a long time for you to individually confirm each item and prevents you from getting overwhelmed by a large number of customers.
- Providing Real-Time Data
When you ask your staff to submit sales reports every day, they are certainly extremely reluctant. After a busy day, they would need to individually calculate sales and inventory levels. Even if you receive the data they provide every day, you still cannot confirm its accuracy.
However, RFID technology can provide you with real-time data – as long as the tags on the items are within the range of the reading device, inventory data and specific sales with timestamps and quantities are automatically recorded.
You no longer need to inquire every day, and your staff no longer need to perform these calculations.
Store Operations and Experience
- Broadening Product Range, Reducing Depth
When opening a new store in a different area, it’s crucial to initially test the preferences of the local population. Therefore, broadening the range of product categories and reducing the depth of each category is essential.
RFID tags can better assist in managing a diverse range of products with varying quantities. They facilitate rapid inventory and data updates, enabling you to make informed decisions for the next steps in product selection and production investment through real-time data comparison.
- Effectively allocating inventory
The traffic patterns in different stores naturally vary, with some experiencing high footfall while others see less traffic.
Effectively allocating inventory without causing waste is indeed a significant consideration.
Leveraging RFID technology to provide real-time data and comparisons allows for quicker responses and decision-making in addressing this issue.
In conclusion, the mentioned benefits are just a part of what RFID can offer to the retail industry, and there are even more advantages to explore. If you’re in need of a customized RFID project tailored specifically to your retail needs, feel free to get in touch with us today!