How Will RFID Change Retail in 2021?
Over its rich history in the last 90 years, RFID is ever-evolving. -Recent pressure on supply chains made many retailers revisit the idea of implementing an RFID solution. They’re leaning into the technology to help improve operations and reduce the burden on staff. Over the last 20 years, RFID technology matured to the point that it can help most organizations optimize their business models.
RFID in retail environments saw early adoption with Walmart implementing RFID for item-level identification 11 years ago. Since then, Walmart now sees RFID as irreplaceable in their supply chain tracking, stock management, inventory control and retail sales management. Advances in supporting technologies like the IoT, big data, and artificial intelligence is giving RFID new life and helping redefine what’s possible in the retail space.
Even before the COVID-19 pandemic, the global RFID market was set to grow by more than 10% CAGR over the next five years. After analysts revised their projections last year, the RFID industry will still see an average growth of over 6% every year until 2025.
- Request for Information and Qualification (RFIQ) is a new way that companies can approach their RFID adoption and measure their maturity against competitors
- RAdio frequency IdentificatioN (RAIN) RFID aims to bridge the gap between the physical items and digital systems that retailers use to manage operations
- Combining legacy (2D barcode) systems with new RFID solutions provide the quickest, most effective method for implementation
- Connecting big data analytics with RFID sensor information is finally making big waves in the retail sector
Latest RFID in Retail Trends for 2021
RFID and its associated technologies such as near-field communication (NFC) and Bluetooth Low Energy (BLE) are reshaping the retail landscape across the entire lifecycle. With logistics, distribution, stock placement, and fulfillment already finding ways to improve processes using RFID, the increased adoption continues to lead to innovations.
Current statistics support this assertion. According to GS1, 47% of the items received by retailers carry RFID tags and 57% of retailers are now implementing the technology. With the additional insights into every element of retail operations, brick-and-mortar shops aim to level the playing field against online competitors and use RFID to enable their own ecommerce presence.
Although each business case varies, the latest trends continue to improve on existing efficiencies with reduced costs, easier integration, and hybrid implementations. Here are some of the latest trends for RFID in retail that will shape 2021.
Introducing RFIQ for Retailers
Marshall Kay introduced a new concept for retailers in a recent Forbes article. RFIQ, according to Kay, is a way for companies to learn their RFID intelligence and understand where there are opportunities to improve. Although Kay readily admits he doesn’t have a standardized test yet, some questions can help retailers uncover additional value from their RFID operations.
- What RFID is and how it benefits consumers?
- What companies use RFID and how it helps them?
- Why do competitors view RFID as essential and where do they apply it?
The idea is that some organizations matured with the technology and today are benefiting from a higher intelligence in its use and application. For anyone looking to catch up, the learning curve may be steep but not insurmountable. Moreover, newcomers to RFID will have the benefit of learning from those who already paved the way and the technologies it spawned.
RAIN RFID is Bridging the Online and Physical Gaps in Retail
RAIN is the global alliance that promotes the use and standardization of ultra high-frequency (UHF) RFID solutions. RAIN RFID doesn’t just push for adoption and standardization, it also focuses on finding new and innovative applications for the tech. A way to achieve this is by warning retailers about a large-scale adoption, which may be cost-prohibitive and complex.
Instead, RAIN RFID advises focusing on elements like targeted accuracy, real-time visibility, omnichannel capabilities, and securing inventory. With RAIN RFID, retailers can automate their inventory data and improve accuracy by 30% while reducing out-of-stock situations by 50%. By helping retailers streamline the entire lifecycle of operations one-step at a time, the company can maximize its ROI and ensure a smooth RFID rollout throughout the organization.
Combining Item-Level RFID with 2D Barcodes
Many retailers remain locked-in to legacy systems. Everything from their financial to material management systems took years to integrate with 2D barcode solutions. What last year showed us is that these technologies remain entrenched in the retail sector. Even if their inventory management did take more time, swapping out one system for another simply isn’t feasible.
The answer to this question now seems to be to adopt the newer GS1 standards for both technologies, allowing companies to combine and integrate new RFID systems with legacy applications. For organizations that need stock accuracy, a local RFID system that integrates with national inventory can help increase efficiencies drastically. In some pilot projects, companies were able to save 50% on costs by implementing RFID with their 2D barcode systems.
RFID and Big Data Analytics
Big data analytics is now a mature and intelligent technology that helps improve business operations. The benefits of having a relationship between RFID and big data is easy to understand – better data equals better analytics. By gaining an overview of all operations, from its source to the fulfillment center, analysts can use the data to streamline routes, optimize inventory, or even predict demand for a specific product.
The better connected the physical retail world becomes to the digital systems that manage them, the more efficient a retailer can operate. The rapid development of information and communication technology (ICT) and improvements in both RFID scanning and transmitting systems means any organization can implement a solution that helps increase their efficiencies quickly.
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