Ten years ago RFID was going to change the retail world. Then nothing happened, and a number of myths about the technology were spread. In this article we look at why the time for RFID in apparel is now.

In the apparel industry the modern consumer is pushing for lower prices, perfect availability and quicker delivery – to many different pick-up points. The digitally connected consumer demands the product they want, supplied through the channel of their choosing, at their convenience.

To meet this challenge retailers and brands must have the right product in the right place at the right time. In other words their inventory management systems must provide 100% visibility of stock, from source to the end consumer.

One technology, much hyped in the past, is now providing the solution to an increasing number of apparel retailers and brands – RFID, or Radio Frequency Identification.

Think of an RFID tag as a more powerful barcode. It can store more data and multiple tags can be read in seconds, without the need for 'line of sight' that a barcode needs.

Ten years ago the hype behind RFID was deafening, but then not much happened and during that time a number of myths about RFID were spread throughout the industry.

However now, in 2015, we are seeing an ever increasing number of retailers and brands, in the UK and globally, adopt RFID for item-level tagging, providing the platform to generate multichannel growth, and offering consumers a seamless shopping experience.

So what were the biggest myths of RFID in apparel retail, and why is RFID now being adopted ever more widely?

Myth 1: RFID is unnecessary; I can do my stock management using barcodes, just like in grocery retail

  • In apparel it is important that every colour and every size of every item is available to the consumer when they are shopping in-store. If not, they may leave without making a purchase
  • While it is possible to count stock and ensure perfect availability using barcodes, it requires a lot of manual intervention, and it is far less productive than the quick and accurate counting that RFID provides

Apparel retailers are typically seeing 80-90% time savings using RFID for stock management.

Myth 2: The cost of RFID tags is too high

  • During the last ten years the cost of tags has reduced by three-quarters. This has been driven by the development and widespread industry acceptance of a single standard for tags – GS1 EPC-enabled
  • The cost of tagging is now a small percentage of the retail value of a garment

The cost of tags represent less than a quarter of the total cost of a typical RFID installation – and most ROI studies indicate relative insensitivity to higher or lower tag costs.

Myth 3: The use of RFID infringes my privacy as a consumer

  • This has never been the case, but the myth has been perpetuated for many years. A GS1 EPC-enabled tag carries no sensitive consumer or product data, containing a non-significant number which can only be interpreted when connected to an associated database
  • Retailers working with RFID have agreed to strict privacy guidelines and support GS1 privacy impact assessment protocols

Under EU regulation consumers have the right to have all tags 'killed' or removed at the point-of-sale.

Myth 4: RFID as a technology just doesn't really work

  • Apparel items are made of very RFID-friendly materials, and developments in RFID technology continue to drive even better performance, in what were previously considered difficult operating environments
  • Today, RFID is a stable technology. It's why so many top retailers are now deploying it as every-day technology, not just trials

RFID performs to extremely high levels of reliability – with 99%+ read-rates.

Myth 5: As a multichannel retailer I always know where stock is available, in all my physical locations

  • Barcodes identify a type of product; RFID identifies every instance of that type of product. In multichannel retailing, where consumer orders are fulfilled as individual orders throughout the supply chain, consistent and total visibility of each instance of a product is a must. This can only be achieved with RFID
  • Without the real-time, always-on visibility that RFID gives it is difficult to know exactly where stock is available across all channels with absolute certainty

Retailers who have deployed item-level RFID tagging have shown both increased sales in-store and also online.

Ten years ago the discussions around RFID focused on the technology: materials, tag costs, tag read rates, positioning of readers and so much more. Today the conversation has moved on: It's about how RFID improves operational efficiencies and delivers a return on investment.

GS1 UK will be providing a regular column for Essential Retail on technology in relation to retail industry standards and the wider supply chain.

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