Retail RFID Archives

I have visited NRF a half-dozen times, and know the challenge is the size of the exhibition: 1,000+ exhibitors, 35,000+ visitors spread over two gigantic halls at the Javits Center in New York. It’s easy to get overwhelmed and lost in there.

The three days spent at the show gave a fresh perspective into the forces that shape the future of retail. The angle I was specifically interested to learn more about is how the RAIN RFID market is evolving.

Lost and Found Buzzwords

Artificial Intelligence, AI, was The Buzzword, hands down. I saw less augmented reality on display than on the previous year and, surprisingly to me, sustainability was well hidden, practically non-existent. It serves to mention, that Digital Product Passport (DPP) was only highlighted on a couple of booths.

Grand Theme #1 – Loss Prevention

For the suppliers in the retail space, chargebacks are the elephant in the room that only a few have talked about in public, except for at the RVCF or GS1 events. For retailers as I gather, a similar pain point is loss prevention. Solutions and practices to address this area are very much rooted in the latest breed of inventory technologies, which lead to the ability to trace items and events, and ultimately in the data analysis that follows. I was specifically impressed with Sensormatic’s Shrink Analyzer.

The obvious 1st goal for everyone is to prevent loss in the first place, but without putting employees or store associates at risk. The second goal is to detect theft so that the inventory can be replenished without unnecessary delay. The third goal is to address the root cause of the issue. As heard from Joe Coll, Vice President Asset Protection Operations & Strategy at Macy’s, thanks to the advanced blend of inventory control, video surveillance, and other methods, retailers today are capable of serving air-tight cases of theft to law enforcement to study and prosecute.

All this is rooted in the ability to track inventory and events across stores and supply chains. In essence that requires item-level traceability, for which RAIN RFID is the dominant solution.

Grand Theme #2 – Consumer Experiences

The grand theme that many companies promoted was the increasing convenience of the consumer shopping experience. It builds on several factors: omni-channel sales, the right product selection on the shelves, associates that can focus on the customer, and fast self-checkout processes. Engagement and VIP-like experiences can be necessary add-ons, depending on the retailer’s market positioning.

Oddly, in a high-volume grocery business, product identification in checkout is still much reliant on barcodes. In lower-volume but higher product-value retail, product identification is more often based on RAIN RFID. As an example, the Amazon Just Walk Out concept has already been deployed at several stadium sports merchandise stores.

Interpretation of Themes

Putting past trends, such as omnichannel, BOPIS, and labor shortage, together with the new buzzwords, such as AI, loss prevention, and self-checkouts, leads me to think that traditional brick-and-mortar stores are becoming convenient fulfillment centers, where all events are being monitored and studied.

In a panel discussion with Levi’s, PacSun, and Nedap, Levi’s VP of Global Direct to Consumer, Kirsten L’Orange, noted her personal view, that RAIN RFID is enabling data mining in the stores! According to L’Orange, ”Omni-channel execution without RFID is not possible. […] The cost of RFID has come down tremendously.” Shirley Gao, CDIO at PacSun shared the benefits RFID has provided for PacSun: 30% from revenue uplift, 30% from savings in shipping costs, and 30% from shrink reduction.

I feel it’s cool to be able to state that stores are morphing into fulfillment laboratories.

It’s hard to imagine a laboratory without data. Going forward it may also become difficult to conceptualize a retailer without accurate inventory – almost the same as a consumer without a smartphone. As of today, I don’t see any other technology being able to provide similar transparency into supply chains and inventories as RAIN RFID does.

What’s in the Horizon

There are a few themes that I expect to come across in future NRF events: robots doing replenishment, item life cycle traceability, DPP, and sustainability. Inventory robots seem to be available already, but on-shelf replenishment requires additional robot capabilities. I expect that lifecycle traceability, DPP solutions, and the opportunities associated are going to hit EuroCIS already in 2024, and possibly NRF in 2026-2027.

Sustainability will also be everywhere, as our future on this planet practically depends on it. More sustainable practices, transparency, and traceability requirements hit the manufacturing, supply chain, distribution, and post-POS lifecycle of the product. Often the packaging and the practical recyclability of products will need to be re-invented. With that said, I am confident there are endless business opportunities for many stakeholders within the retail space. I wonder who are the first ones to ride that early wave in the US market?

Final take for those in the RAIN RFID industry – now is the time to review roadmaps to make sure our products and service offerings are aligned with these upcoming themes and requirements!

RAIN RFID is the key technology for item-level traceability.

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I had the pleasure of attending a networking event of Americas Apparel Producers’ Network – AAPN a few weeks ago. The presentation topics and discussions ranged from lighter reminiscences of past gatherings to hard core statistics around today’s retail.

As a take-away I thought a grim view was painted of the main stream apparel value chain of brand owners and retailers. This traditional apparel retail value chain seems slow and rigid; and is definitely challenged by online sales and vertically integrated fast fashion companies.

Recently I’ve also heard presentations from a couple of vertically integrated retail chains – with focus on their RAIN RFID projects. Those stories painted a more positive view of the retail value chain.

Read on to see how these two opposite forecasts might merge.

Slow Moving and Heavy Inventory Make Department Stores Suffer

The key issue is summed up in a few bullet points:

Traditional value chain takes an average of 9 months to get from a product idea to sales.
Because of slow processes the chain must rely on heavy stocking of manufactured goods.
Because of large stocks, a large portion of products are still unsold when fashion changes. Items are sold with high average discounts.
Add the fixed cost of retail stores and problems arise.

Announced department store closures were provided as an evidence:

Online and Fast Fashion Thrives

On-line stores can sell with the same cost of goods sold and pricing structure, but with lower fixed costs. Bottom line is still positive. Fast fashion chains can maintain lower stock levels and follow fast trends more quickly. There is less need to high discounts and margins are enough to cover fixed costs. There is profit to invest.

Root Cause Is the Traditional Management Focus on Costs

An analysis is presented in Apparel News article.

In the traditional model the link between retailer and brand owner is broken.
Retailers focus on cost. It is the only item they can fully control and they fully understand. And apparel manufacturers must follow with cost focus. There are no resources to improve processes or focus on the yarn types and fabric qualities. It is hard to break this malicious cycle.

Information Sharing Should Become The New Focus

RAIN RFID is a technology that can create a vast amount of data, and turn that data into meaningful information. When this information is produced at the retailer and shared with brand owner, the value chain can be improved.

Decathlon case study by Tageos
Inditex presentation

There are plenty of case studies like the ones above. But let’s look some use cases beyond the case studies – how RAIN RFID can be used in shortening the cycle times.

Faster Everything Means More Efficient Everything

With RAIN RFID tagged store merchandise, replenishment needs at the shop floor are noticed in real time, and the information can be shared real time with warehouse, distribution and factory. When the rules are set, just rely on EDI and automation to keep the stores running. Every party in the supply chain knows how much stock there is at various upstream locations, and when is their time to react.

The key enabler is the accurate and real time inventory – the key deliverable of RAIN RFID. When the process works, the initial stock levels can be lower across the value chain, and there’s your Cost Saving right there.

Instant Feedback from Store to Design Accelerates Season Cycles

As the merchandise is RAIN tagged due to the efficiency reasons stated above, smart fitting rooms, info kiosks and store associates can be utilized to collect information about consumer preferences. Real-time pre-purchase information about models, sizes, and colors that are interesting to customers can be used to optimize store layouts, but especially valuable it is to the brand owners.

Such insight enables the designer to assume a new kind of ownership of the product. Minor fixes can even be implemented during a season. This real-time collaboration through the value chain rises the clock rate of traditional brick and mortar stores to match and exceed the vertically intergrated ones.

What Should Apparel Manufacturers Do?

Instead of following the lead of retailers, the brand owners should assume a more active role. Here’s a couple of pointers:

Learn the basics of RAIN RFID – consider a webinar, attend a 101 course or follow the RAIN Alliance.
Take a look at what your fellow competitors are doing: The Herman Kay case study by GS1 sets a great example, and here’s another story referencing lululemon and Adidas
Instead of being compliant, manufacturers should check that requirements take into account also manufacturers’ own needs – manufacturers should especially demand the requirements in a format that enables them to scale and optimize, such as the GS1 TIPP grades.

What Has Voyantic to Do with All of This?

Voyantic offers RAIN RFID testing solutions and systems. Our performance testing equipment enables anyone to implement RAIN RFID tagging according retailer’s and manufacturer’s requirements. Our solutions ensure quality monitoring across the whole tagging process. We are happy to provide more information of RFID – start from our webinars, for example!