RFID is the hottest thing in retail

I’m trying on a new pair of Jeans and look into the mirror in the changing room to see a multimedia presentation played to me telling me about the jeans I’m trying on!

Guiding me through different features and colours I’m driven to touch the red button magically screening behind the mirror and I summons an assistant to bring me a different size in a different colour.

How did the mirror know it was me?

How did the mirror know what specific pair of jeans I had?

The answer is RFID!

I later learn that RFID chips embedded into the swing tag or label of garments is being adopted across the retail supply chain to automate real time data capture.

From the manufacturer in China, who attachesthe RFID tag, to the Electronic Article Surveillance solution in the store and the inventory management system in the front and back rooms, RFID is changing the face of retail information systems.

RFID is enabling retailers to know what’s “fallen off the back of the truck”.

Using RFID, retailers know what stock has been delivered and most importantly, since a lost sale through lack of availability is one of the biggest costs, what’s not on the shelves.

I recently had the pleasure of braving a cold January visit to New York where the National Retail Federation Conference and Exhibition exposed the latest and greatest retail technology.

It was here after years of providing RFID in all sorts of applications from Microchips in dogs and cats through to large inventory management solutions for BHP that I felt justified, I felt redeemed to see a number of RFID solutions on show and working brilliantly.

Finally I was not alone in my commitment and dedication to the technology!

The stand outs for me and, I must declare, so stand out that my company now represents these companies in Australia were Vue Technology and The Big Space.

These companies partner so they have smooth interaction between their products offering true supply chain benefits from source to sale and in between!

Vue provide the software in a number of modular forms to suite both small and large retailers and they boast clients in the apparel, books and pharmaceutical markets benefiting from their intelligent RFID shelf readers.

Retailers such as Tesco and Best Buy and now others in books and sports fashion report benefits such as 50% reduction in Out of Stock, 75% reduction in labor for restocking, double digit uplift in sales and significant reduction in shrink (or 99.47% inventory accuracy) versus 85% before.

On-shelf availability is reported as mid-80s to 97.3% , 18% uplift in sales and 1 year payback — yes, one year!

These figures are amazing and I must say quite consistent with the results our customers have seen in other Asset Management and Inventory Management application outside of retail.

It’s no wonder that the big guys like Checkpoint and Tyco, traditionally EAS (electronic article surveillance) suppliers or the dumb tag that sets off an alarm as you walk out the door because the sales assistant didn’t remove your tag, are jumping into the smart RFID rapidly.

The difference is that RFID enables retailers to identify each article unique rather than as a group.

RFID enables you to read hundreds of articles in the field at one time and through the strong efforts of GS1 (formerly EAN) in Australia and around the world we are hoping that RFID in Retail provides a greater further proof of the technology’s return on investment.

The technology and the applications around it has come a long way since Wal-mart started slapping RFID labels on pallets some years back!

There is evidence out there also that the large system integrators are now throwing themselves into retail RFID due to the compelling business case offered by the technology and the rapid increase in global deployment!

So writing this article I thought about Australia, what is happening here that’s in the public domain.

I Googled Retail RFID Australia and apart from the paid ads I couldn’t find much.

Once again the shroud of silence goes over RFID— but we know a lot is happening in the back ground. Perhaps no-one talks because they want to gain a competitive advantage through RFID?

Our company has a number of retail projects under our belt which are nearing completion and RFID has been used to drive a number of loyalty projects in this country using proximity based RFID tags for petrol loyalty ( and Club Loyalty ( .

We’ve also seen recently large Bank trials of RFID Smart Cards in the stored value capacity and we await the NFC (Near Field Communication) releases with RFID capacity in mobile phones meaning your phone becomes your card.

An added dimension to the use of RFID in retail is the major integrated ticketing systems happening in most major cities around the country.

This will see a plethora of 3rd part applications around these RFID smart cards over the coming years making payment and loyalty easier through stored value, points and multiple applications on the one card.

As far as long range RFID deployment is concerned in this country we have seen a lot of work being done on interactive shopping using RFID.

This concept enables personalised service and marketing to be conducted through long range, unobtrusive recognition through RFID.

For example, you walk into a shop or a restaurant and staff address you by name and offer you your favourite drink or a discount on your favourite wine. You are greeted by name as you walk up to the counter in a Bank.

The Australian market has also seen a number of retail supply chain demonstration projects run by GS1 using RFID to enhance efficiencies in the supply chain!

So the adoption of RFID is happening in the retail sector from the source and through the entire supply chain.

Direct comparisons for RFID have been made with the bar-code / EDI introduction in 1988 and the similar approach for retailers to investing in RFID technology in 2008 will prevail.

Watch this space as the business case seems compelling especially on high value items where a missed sale is a missed profit!

Scott Austin is president of Syscan Australasia

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