In the first of a new series of blogs revealing everything retailers need to know about RFID, GS1 UK zeroes in on the technology’s retail benefits in a multichannel world.
We‘re all aware of how the digital world is revolutionising the way we live, work and shop. And, well, we are becoming a demanding bunch. We hunt through a world of options with just a swipe of a finger – and if you’re anything like me, without even getting out of bed.
It’s well documented that patience is no longer a virtue many of us possess. When we’ve found that product, at the right price, we expect it to be in the correct size and available for purchase – delivery or collection at our convenience.
Meeting these high demands from consumers is crucial for retailers, as they look to provide a seamless brand experience across multiple platforms and channels. Retailers strive to outdo each other, wooing shoppers with the latest functionality on their websites, apps or in stores. However, behind all this sits a basic need, to take a product from source and get it to the consumer. A retail fundamental that has become an increasingly complex task in itself.
To deliver a multichannel service that consumers will love, retailers need speed and flexibility. But, how can they achieve this?
To manage your inventory, you have to be able to identify what the product is, how many you’ve got and where it’s located. For years we’ve done this with barcodes, they revolutionised retail some 40 years ago. But, as we know, we live in a digital world now. Time is money, and machines are faster and more accurate. Barcodes still require human intervention, and we have a tendency to get things wrong or take longer than our impatient customers can bear.
A digital solution
Radio Frequency Identification (or RFID), has been a much talked-about topic in the retail community. But what is it?
RFID tags are similar to a barcode – storing a number that can be machine read to uniquely identify the item it’s attached to. Where it becomes different is there is no need for ‘line of sight’ – tags in the vicinity of a reader are able to pass their data by radio waves almost instantly. What is known as a read event is then logged on a system, noting a time and date as well as a unique serial number for the individual product scanned.
Be seen to be flexible
RFID creates a platform to gain visibility into items and processes. With accuracy rates way above what is humanly possible, retailers using RFID now know where each individual product is along their supply chain. Precise information that can be acted on in real time is vital to having the flexibility required to run a multichannel supply chain efficiently. Moving products between channels, with a single view of stock is an ambition of many, but often an impossibility with current systems.
Working across channels, RFID allows retailers to optimise a product’s journey through its supply chain, placing it where it’s in most demand with maximum efficiency. This translates into leaner stocks, and lower costs. This level of information doesn’t just benefit the guys in operations or supply chain, it can be shared through departments, informing business decisions to make sure that a product is deployed where it has the best chance of being sold at full price.
The killer application
When a tagged product gets in store, RFID is able to make a huge difference in one area in particular – stock availability. Store staff are able to take check of what is available on a shelf in seconds, finding the replenishments in the stock room quickly and getting it out on the shopfloor – taking the available stock for sale from 63% up to 95%. Retailers that have been using RFID have seen this positively impact their sales. By reducing the number of sales lost due to out of stocks, retailers have achieved gains of between 2% and 20%.
What to look for
RFID tags come in a variety of specifications. But only one has the backing of industry and a global standard. Electronic Product Code (EPC) enabled RFID tags now have a critical mass driving down costs for retailers – by some 75% in the past four years.
Developed by GS1 and industry, EPC RFID tags are passive (without an independent power source) and operate at an Ultra High Frequency (UHF) – 860 to 950 MHz depending on local regulation.
The GS1 open global standard includes how data to be encoded onto a tag is to be structured and how the tag talks to the reader – the air interface protocol. This ensures that any reader can interrogate a tag. With these in place retailers and their suppliers are free to invest in the technology of their choosing, with assurance and protection that it will remain relevant.
- Andy Robson is Supply Chain Solutions manager at GS1 UK – a community of more than 28,000 members working in retail, food service, healthcare and more. As one of 111 independent, not-for-profit GS1 organisations across 150 countries worldwide, GS1 helps everyone involved in making, moving and trading goods to automate and standardise their supply chain processes using the common language of business. Find out more here.