The Benefits of RFID for Retail Shrink and Theft
Retail executives at NRF’s Big Show have been praising the benefits of RFID technology for understanding merchandise movement, managing retail shrink, and combating retail theft. RFID uses electromagnetic waves to identify and track tags attached to objects, providing real-time insights into stock levels, replenishment needs, and digital fulfillment. It has become an essential tool in retailers’ arsenal, offering a tried-and-true way to understand loss in stores.
How Major Retailers Are Utilizing RFID Technology
Major retailers like Macy’s and Levi’s have embraced RFID technology to gain valuable insights into retail loss and theft. Macy’s installation of RFID readers at exits and entrances has unlocked a level of data previously thought impossible, providing video evidence of individuals leaving the store with unpaid products. Levi’s, on the other hand, has found that RFID is critical for inventory accuracy and successful omnichannel execution. The cost of RFID has dramatically decreased over the years, making it more accessible for retailers.
The Unparalleled Inventory Accuracy of RFID
According to Accenture, 93% of North American retailers use RFID to some extent. Those who have fully adopted RFID technology reported a 10% return on investment in 2021, compared to 9.2% two years prior. RFID offers unparalleled inventory accuracy, helping retailers identify and address theft, accounting errors, and vendor fraud. This level of accuracy is crucial for retailers aiming to improve merchandise visibility, stock management, and resource allocation.
The Growing Ubiquity of RFID in Retail
RFID technology has become increasingly widespread in the retail industry. Many multi-brand retailers are finding that products come to their stores with RFID built-in, making it easier to track and manage inventory. For instance, Snipes, an online footwear retailer, discovered that 70% of items on its site were already tagged via RFID. This growing ubiquity highlights the industry’s recognition of RFID’s value and its potential to transform retail operations.
Going Beyond Theft: The Wide-Ranging Benefits of RFID
RFID technology offers benefits beyond theft prevention. Radar, a hardware and software platform that combines RFID and computer vision, uses this technology to locate in-store inventory accurately. The data collected by RFID sensors attached to the ceiling can help retailers identify missing inventory, prevent out-of-stock situations, and optimize store layouts. Furthermore, RFID’s location accuracy enables retailers to understand customer behavior and improve the overall shopping experience.
As RFID technology becomes more prevalent, retailers are increasingly adopting it to enhance their operations. The benefits of RFID are undeniable, providing real-time insights into stock levels, preventing theft, and optimizing inventory management. Its unmatched inventory accuracy and growing ubiquity make it a table stake for any retailer looking to improve merchandise visibility, reduce shrink, and enhance the shopping experience. The potential for RFID technology is vast, with continuous advancements and integration into various retail processes on the horizon.
Analyst comment
Positive news. The market for RFID technology in retail is expected to grow as more retailers adopt it to improve operations. The benefits of RFID, such as real-time stock insights, theft prevention, and optimized inventory management, make it essential for retailers. RFID’s unmatched inventory accuracy and growing ubiquity are driving its adoption. Continuous advancements and integration into various retail processes offer vast potential for RFID technology.
