American Apparel's deployment of RFID remains the "most impressive" example of how the technology can aid the retail industry, according to Dean Frew, president at SML Intelligent Inventory Solutions.
The fashion retailer's use of the technology effectively saved the company, Frew argued, with the business also seeing an overall reduction in inventory and growth in employee satisfaction.
At this year's European retail tech solutions show RBTE, which takes place between 10-11 March at London's Olympia, retail visitors will have an opportunity to visit a dedicated RFID Zone showcasing nine companies – including SML Intelligent Inventory Solutions – that are bringing the technology to the retail sector.
It is the second year in succession that RFID will be featured in such a way at the European show, and on this occasion visiting retailers will also be able to catch up with representatives from BT Global Services, Enso Detego, Impinj, Nordic+, OCS, r-pac, Smartrac and TRC Solutions.
Essential Retail spoke to SML Intelligent Inventory Solutions' Frew to hear his views on RFID's growing influence on the industry.
Why are a growing number of retailers realising now is the right time to invest in RFID?
Unfortunately for a lot of them, it is because they are watching the retailers who already invested in RFID out-execute them in things like omnichannel fulfilment and in-store experience. The pendulum has swung far enough that RFID is rapidly becoming the technology for inventory management in stores, and adopting it is no longer a matter of being an innovator, it's do-or-die mass adoption. They almost have to invest, and the numbers are there to support investing. When you compare the proven hard benefits that an RFID inventory system brings with it (increased sales, reduced shrink, inventory reduction & elimination of third-party audits) against the softer benefits initiatives like mobility might bring to a retailer, it's no wonder why RFID solutions are moving up to the top of the IT spend priority list. I think that we are seeing customers focused on working with partners that can simplify RFID deployments. This is a major focus for us at SML.
What is (or has been) the most impressive use of RFID in retail that you've seen?
I think we have to distinguish between the kind of thing shown off in a trade show booth and the pragmatic use for inventory management that is being done in the real world. There are a couple of interesting deployments I can't really talk about, but to me the most impressive use of RFID is still American Apparel. They jumped in with both feet and tagged everything, and the results were concrete and phenomenal and helped save the company. They saw all kinds of unintended benefits, like an overall reduction in inventory and increases in employee satisfaction. To this day, it is the most significant and comprehensive rollout of the technology. Their inventory management and replenishment models are literally built on RFID. And it has been running in production in 20 countries and hundreds of stores for over four years. That's impressive.
What role does your company play in bringing RFID technology to retailers, and which companies are you working with?
We're a software solutions company within a branding solutions technology company, so we can pretty much bring the end-to-end solution (tags, hardware, professional services and software) to market or we can be as a la carte as the customer likes. That's one of our key values: we're very focused on giving the customer what will add the most value for them, not on maximising how much we can charge. We work with several large apparel retailers in the United States and Europe and have industry leading deployments in both regions. We also work with brand owners and apparel manufacturers and have several key customers helping them with supply chain and company owned store solutions.
Everyone's talking about the Internet of Things (IoT); what's your definition of this term and how central is RFID in this ultimate drive towards 'a connected world'?
I view the Internet of Things as the expansion of the digital data layer we've created through the internet to the physical world. It is literally making physical objects part of an integrated digital universe. Passive RFID so often gets overlooked for things like Bluetooth and iBeacons or ubiquitous Wi-Fi-connected devices and active tags, but I think it is actually the bedrock of IoT. The reason is simple: most of the objects in our world are not connected to a power supply, and it would be inefficient and uneconomical to place one in them. Books, clothing, furniture, your pen… no power supply. And these things make up 98% of everything, yet they remain blind to the data collection, tracking and management technologies of today. Passive RFID is the one thing that can solve this in an economical way. I love talking about this because giving an inanimate object a unique identity and coupling it with autonomous reading technology is a game changer. The applications are endless…
Tell us what to expect from this year's RFID Zone at RBTE?
You'll be able to get a good sense of where the market is headed as we expect to see customers focused on 'can you simplify this for us?' rather than 'does the technology work?' We expect to also see more advanced technology that enables faster reading, lowers costs of deployments and more scalable software solutions. We're showing a version of our software that is scalable and easy to deploy; it's got a beautiful UI, makes stock-taking a snap, and is overall just fun to use because the benefits versus tracking stuff by hand or barcode are so obvious. We have focused a lot of R&D into how can we build software applications that actually, through smart integration, make a customer's existing systems more effective rather than obsolete. I think it is bigger and better than last year and is definitely going to be one of the peak attractions at RBTE.
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