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Retailers realising multiple benefits of RFID adoption

With UK supermarket group Asda recently announcing the start of an RFID pilot alongside Tyco Retail Solutions, it is clear that the technology is increasingly being touted as an essential component of a retailer's toolbox.

The Walmart-owned grocer has teamed up with Tyco to pilot the introduction of RFID in stores on an item-level inventory accuracy project for its George clothing business, but recent research shows that there are a whole host of reasons why retailers are embracing this technology.

Other retailers, including Macy's, Saks and Walmart itself, are using RFID on billions of their items, while the recent NRF Big Show in New York highlighted how top retailers are keen to investigate the different options available to them in this field.

A recent survey of 120 global retailers by US-based research organisation ChainLink Research, sponsored by Tyco Retail Solutions, showed that the top three reasons companies are implementing RFID, are: improving inventory accuracy; reducing out of stocks; and increasing on-floor availability.

The research also indicated that almost all of the retailers that are progressing with widespread RFID roll-outs have seen sales grow in the categories where they implemented item-level RFID. These results were primarily attributed to a reduction in out of stocks due to the increase in accuracy RFID can bring.

Commenting on the findings, Ann Grackin, CEO of ChainLink, said: "RFID has come a long way in the last few years – standards have been established, prices for systems and tags have plummeted [and] RFID technology has become much more reliable.

"Software applications that can be integrated into retailer IT systems and that are user-friendly at the store level are now available. There are many more experienced implementers, technologies have evolved into a complete solutions approach and technology providers and systems integrators have considerably greater experience with retail and integration with operational systems."

The use of RFID in retail is continually evolving, though, with loss prevention and specifically RFID-at-the-store-exit given as the top responses when retailers were asked to envision future implementation of the technology. According to the report, some retailers are also investigating how RFID technology can provide item-level shrink visibility that hasn't previously been available until now.

The results of the survey, which was distributed to retailers on both sides of the Atlantic, certainly bring some clarity to the industry's current usage of RFID, but so too will this year's leading European retail solutions event, RBTE.

During the two-day event at London's Earls Court, in March, visitors will have the opportunity to visit the In-store RFID Customer Experience Zone, which aims to provide retailers with an understanding of how RFID can bring benefits to almost every part of their business.

Representatives from the zone's main sponsors ADT Tyco, Smartrac and Nordic ID UK (which as of February will be rebranded Nordic+), will be on hand to demonstrate RFID's multiple functions and advantages across all aspects of retail.

Matt Bradley, event director at RBTE, said: "The RFID zone is one of the great success stories of RBTE. Originally born out of a demand from our visitors, it's great to see more and more retailers awakening to the incredible amount of opportunities RFID offers."

RBTE has played host to an RFID area over the past two years, but in 2014 even more attention will be given to this fast-developing sector of the retail technology landscape.

"This year, we will be taking visitors on a fully interactive retail journey – from warehouse to the shop floor," explained Bradley.

"And with even more specialist suppliers now on hand to answer any queries I fully expect the RFID zone to be one of the high points of RBTE 2014."

This is the first article in a five-part series on RFID. Over the coming weeks, Essential Retail will profile the use of RFID at the different stages of the retail supply chain, where we will hear from the key sponsors of the RBTE In-store RFID Customer Experience Zone, Tyco Retail Solutions, Smartrac and Nordic ID UK.