In today’s increasingly popular online shopping, out of stock issues often lead to customer churn. According to a survey, 41% of American online shoppers immediately turn to other similar brand stores to place orders when they encounter a shortage. This is not just a minor inconvenience, but also means that the brand or online merchant loses valuable sales opportunities. How to effectively solve this problem has become the key to enhancing the competitiveness of the retail industry. Christophe Castagne, Director of Retail Product Visualization Solutions for Southeast Asia at Baodian Systems, pointed out that adopting an RFID (Radio Frequency Identification) based Electronic Article Surveillance System (EAS) can reduce out of stock rates and resulting business losses by up to 50%.
RFID technology is no longer an emerging concept, and its applications are widely involved in road toll collection, inventory management, and anti-theft fields, even dating back to the history of identifying enemy aircraft during World War II. With the development of technology, the importance of RFID in the retail industry is increasingly prominent, among which point keeping system companies, as market leaders, occupy about 45% to 50% of the market share. By partnering with Microsoft to cloud data, retailers can enjoy the five core advantages of RFID without the need for large-scale hardware investment.
1. Efficient anti-theft: reduce theft rate and ensure profits
In recent years, global in store theft cases have increased by 11%, and EAS systems can effectively intercept about 69% of theft, with a 47% reduction in theft rates for fresh meat products. This technology helps retailers significantly reduce losses caused by theft through hidden tags.
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2. Quick inventory: saving time and costs
Traditional inventory often requires closing doors for several days and hiring external personnel, resulting in sales interruptions and high expenses. RFID technology has changed this situation: an employee only needs about 20 minutes to complete weekly inventory, reducing inventory time to 4% of the original. A sports goods supplier with 1500 branches has seen a 17% increase in operating profit and a 6% to 7% increase in sales since introducing RFID systems in 2014.
3. Optimize the checkout process: eliminate queuing and waiting
Customers only need to put the selected products into their shopping basket, and the RFID system can display price, discount, and inventory information in real time, without the need to scan each item one by one. This not only accelerates the checkout process, but also enhances the shopping experience for customers and reduces waiting time.
4. Tracking stolen goods: timely replenishment and identification
Although theft cannot be completely eliminated, RFID tags sewn into clothing or embedded in packaging can help retailers quickly grasp stolen product information and achieve instant restocking. Even if the goods flow into the black market, the police can quickly identify their ownership after retrieving them, reducing secondary losses.
5. Customer flow data analysis: precise insight into customer behavior
By combining IoT sensors and big data analysis, RFID systems can monitor customer flow in the store in real time, and collect data on customer flow, gender, age group, and emotions in different areas. These pieces of information help retailers optimize their product layout and shopping routes, and increase sales conversion rates.
The application of RFID devices is extremely flexible: tags can be as thin as paper, embedded in fresh meat packaging, wine bottles, or clothing bags, almost invisible. For example, Decathlon, a French sports brand, uses RFID technology throughout its stores to achieve all-round management. For metal products, functional expansion can be achieved through external sensing devices or by attaching them to price tags.
In addition, RFID can also record detailed information from the production source to the sales process, such as origin, processing plant, purchase date, food shelf life, etc. The system can automatically prompt discounted pricing based on the approaching expiration date of the product, and the salesperson does not need to manually operate, and can quickly update promotional information through the electronic display screen.
Overall, RFID technology is driving the transformation of the retail industry towards intelligence and efficiency through five major uses: anti-theft, inventory, checkout, tracking, and customer flow analysis. It not only reduces operating costs and losses, but also helps brands maintain a leading position in fierce market competition by enhancing customer experience. With the continuous maturity of technology, RFID is expected to become an indispensable core tool in the future retail ecosystem.