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Will the Store of the Future be RFID-Enabled?

“If you know what you have, then you know what you sell and you know what you don’t need,” Craig Leonard, president of Denim Wall Inc. and owner of seven G-Star Raw franchise stores in the U.S., said at the National Retail Federation’s (NRF) Big Show in New York on Tuesday.

During a panel discussion titled, “Mid-Market Retailers Get Competitive With RAIN RFID Inventory Intelligence,” Leonard lauded the results he’s seen since implementing a radio-frequency identification (RFID) overhead reader in one of his G-Star Raw stores. (For the uninitiated, RFID tags are tiny tracking chips attached to products that can be electronically loaded with information.)

“It’s constantly reading our inventory,” he shared. “When you have a retail store one of the biggest problems is not being able to find something when you need to find it. Having RFID enables us to do that job.”

Hans Petter Hubert, retail director at European brand Moods of Norway, echoed that. “We saw that our stores continuously complained about poor deliveries, blaming the warehouse guys and the warehouse guys blamed the stores. The problem was inaccuracy in our inventory levels,” he said, noting that’s what sparked the decision to test RFID two years ago. “During our pilot we had double-digit growth in pilot stores. This was really striking. It really improved our inventory accuracy. You can’t recommend the product to your customer if you’re not sure that you have it.”

Not to mention, it minimizes the amount of time spent searching for styles or sizes requested by customers. But a more accurate view of what’s in stock is not the only way RFID can improve the in-store experience. At retail logistics firm ShopWithMe’s “smart store” in Chicago, when a shopper picks up an RFID-equipped product from a so-called “react table,” they’re immediately presented with additional information such as what sizes are available in the store.

“In the past you would probably have had to find the barcode sticker on the product, walk to a barcode reader, scan it, get a price. With RFID you don’t have to do that,” Jason Chen of ShopWithMe said. “It’s almost a natural process in the way that we appeal and serve that customer in our smart store.”

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Eric Broderson, chief operating officer and president of Impinj, which shipped three billion RFID chips last year, said the technology enables multiple business uses within retail, from omnichannel fulfillment and loss prevention to high degrees of interactivity and data-driven improvements.

“We now literally have a system where a customer can come in, pick up an item, if they don’t see their size they can ask the sales person if we have it and the sales person can now pick up his cellphone, put it next to the item and pop up on his phone exactly what it is, how many we have in stock and where they are in the store,” Leonard summarized. “It makes the customer experience a better one because they don’t have to wait around for sales people. It’s hard to put a value on that. It’s priceless really.”

He added, “RFID is starting to show us that we can figure out what is happening with the inventory and why we have it and why we don’t have it and what we have to do to improve those percentages. It all comes down to strong numbers on your accuracy.

In addition to rolling out RFID overhead readers to the rest of his G-Star Raw locations, Leonard also wants to use the technology to incorporate more interactive experiences around the store and in the fitting room, similar to what ShopWithMe currently does. And he’s not worried about pushback from employees.

“If you have a staff that’s excited about this stuff they’re going to use it. It’s been pain-free so far. Installation [in the pilot store] was quick, it only took a few days. Training with the staff is easy,” he shared. “People in our stores are running our stores so we need a system that’s really simple, easy to use and one that can basically solve all the problems we’re looking for it to solve.”

Hubert agreed. “We don’t have a huge IT department—we’re not entirely a one-man show but close—so I think to implement a project like this for players like us is to find the right partner and have the right people in your stores. Those are the most important resources in RFID rollout. If you have those two things in place it’s actually surprisingly easy,” he said.