Radio frequency identification technology (RFID) has helped many apparel businesses improve their inventory performance, but as these deployments mature, they’re finding additional use cases for the technology.
Today, many leading retailers view RFID as indispensable to their operations, especially where omnichannel is concerned. In fact, 92 percent of North American retailers are “progressing toward full adoption” of RFID, according to the Kurt Salmon part of Accenture’s RFID study, Transforming Modern Retail 2018, published in August. This figure indicates that RFID has become mainstream. Consider that 96 percent of retailers that have adopted RFID offer one omnichannel fulfillment option and 83 percent offer three, compared with 59 percent with one capability and 24 percent for three, among retailers that aren’t using RFID.
As a result of RFID’s maturity, retailers are beginning to explore other use cases in order to maximize the value of their deployments.
“Most apparel retailers today are using RAIN RFID for inventory management and then as they become more comfortable with the technology they expand their deployments to include benefits in shipment and logistics operations, loss prevention, store operations, and in-store experiences,” said Ashley Burkle, senior manager of retail solutions at Impinj, a provider of RFID and Internet of Things technology to wirelessly network large quantities of items.
Impinj’s RFID technology can be used to prevent short-shipping from factories, or delivering less product than promised. Supply chains are most vulnerable to short shipping during the pick and pick process, when employees are building each pallet, or right at the warehouse dock door as part of shipping. However, Burkle said most customers are interested in ensuring the correct carton or pallet of goods is loaded onto the right vehicle, rather than explicitly targeting short-shipping, which is an ancillary benefit of optimizing for shipment verification. Companies that want to incorporate RAIN RFID to manage carton or pallet accuracy usually do so as part of a separate step in the logistics value chain, Burkle explained.
Apparel customers might be drawn to shipment verification as another attractive use case for RFID because it’s considerably simpler to deploy than it is for inventory management. Impinj’s RAIN RFID platform requires readers, or gateways, installed at a warehouse dock door, and cartons and pallets each get an RFID tag. When trucks loaded with these cartons and pallets pass beneath a gateway, the RAIN system automatically reads the tags as a batch and determines whether or not the packing list matches what’s actually departing the facility—and can even determine the direction of travel to understand if goods are being shipped out or received. Avery Dennison offers a similar technology in partnership with InforNexus that allows containers to be packed with RFID tags to reduce instances of short-shipping.
“This automated process significantly decreases the shipment process as there is no need for manual barcode scans or slow-downs of the line or shipping process,” Burkle said.
Impinj, whose customers include Zara, La Chapelle and Decathlon, has found that sometimes a whole pallet will somehow be missing from an order, and so “we are finding a lot of opportunities today where we are just focused on making sure that companies are able to confirm that the correct pallet is traveling through the dock door onto the correct truck with shipment verification,” Burkle explained.
“But there is the potential that short shipping could have occurred upstream,” she continued. “We expect as more companies are putting RAIN RFID tags onto individual items at the point of manufacture they will also add carton contents verification to confirm that the correct items are packed into the correct carton to further reduce short shipping.”
Much of this demand for increased shipment accuracy and inventory visibility via RFID stems from the rise of e-commerce, which has not only changed the face of retail but also fundamentally altered behind-the-scenes operations. Whereas distribution centers were once simply holding zones for store replenishment, today many ship product directly to end customers, making it critically important to know in granular detail what is and isn’t in stock—and where product is at any given time.
And as retailers look for more creative ways to use RFID, the technology is finding its way into interesting applications. Impinj customer Decathlon, a sporting goods and athletic apparel store, deployed Simbe Robotics’ Tally bot equipped with a RAIN RFID reader to continuously scan the store for inventory counts and accuracy, and relays its findings to employees. RFID is also making itself useful in Amazon Go-like frictionless payment applications, though without the $1 million price tag for an expensive network of cameras.
Mishipay, for example, leverages Avery Dennison’s RFID tags to allow in-store shoppers to pay for purchases without waiting in line. The self-checkout application incorporates a QR code, which connects to a weblink and contains a unique EPC, printed on an Avery Dennison RFID tag affixed to a garment. To purchase, a customer scans the QR code with her phone, pays via Apple Pay or Google Pay, and an overhead reader from Nedap receives a signal to ignore that RFID tag when the shopper exits the store.
The RFID report found that “newer and less proven” cases like RFID-enabled self-checkout yield lower ROI versus traditional use cases like inventory accuracy, store replenishment and out-of-stocks, which yielded the greatest return at 8.5 percent and higher.
“As retailers continue to learn about these capabilities and the technologies become more widespread, the financial benefits are expected to improve as capabilities continue to mature,” the report added.