How RFID and Omnichannel Are Teaming Up

The data shows retailers recognize the potential of this technology to enhance operations and customer experiences.

It wasn’t long ago when only the most prominent retailers had the time, energy, and resources to make RFID part of their business. But that’s quickly changed in the face of a rapidly reshaping consumer landscape.

After years of considering this technology, merchants are making the leap into RFID. In 2020, 77 percent of European retailers had some sort of RFID investment, a 50 percent increase from two years prior, according to Accenture’s A new era for RFID in retail report. Furthermore, in 2021, 37 percent of retailers were rolling out their RFID strategies, and a nearly equal group (32 percent) had fully operational deployments at work in their operations. 

How Omnichannel Retailers Are Using RFID

Retailers continue to use RFID tags on high-value items to mitigate shrinkage, but RFID technology is the foundation of many more solutions in the industry. Moreover, after the supply chain disruption unleashed by the pandemic, sellers have a renewed understanding of the business-building benefits of intimately knowing what’s happening with their inventory.

Having a firm grasp of the whereabouts of any given item is the bedrock of providing shoppers with the omnichannel convenience they demand. Without RFID data, services like buy online pickup in store (BOPIS) can’t run efficiently. Customers who decide to click and collect will be disappointed – and perhaps take their business elsewhere – if the items that a website said were available were actually out of stock. Retailers can’t risk their reputation by failing to deliver on an omnichannel order.

The same goes for dispatching in-store inventory to online shoppers. Retailers increasingly want to expose more of their stock to a broader audience, whether the product is sealed up in a warehouse or sitting on a store shelf. RFID tagging gives merchants data-rich tools to maximize inventory productivity and sell through easy-to-use interfaces like smartphone apps.

The ROI of Omnichannel RFID Solutions

Of course, every retailer needs to ensure RFID makes financial sense. However, those who use the technology to power more omnichannel services are seeing a stronger return on their investment. Accenture reports that ROI is 20 percent higher for merchants using RFID for five omni features or more than those with four or fewer.

What’s more, advanced RFID deployments drive more attractive ROI. Asian and North American retailers are seeing 17-22 percent higher ROI versus those in Europe, where RFID investments are less farther along overall (with many still in the early pilot phase). Working with upstream partners makes a difference as well. Getting suppliers to take on the responsibility of source tagging results in a 16 percent healthier ROI.

Now that the benefits of RFID are coming into focus, many retailers are eager to embed the technology deeper into their operations, with ambitions varying from one sector to the next. For example, priorities for soft goods retailers include blockchain (24 percent), with even interest spread across self-checkout, supply chain, and analytics, and boosting customer engagement with smart tech (22 percent each).

Conversely, Grocers are united around slashing stockouts at 45 percent, though they are also looking at blockchain integration (33 percent) and making inventory more visible (24 percent).

Hardline retailers were the only group to include omnichannel fulfillment (28 percent) in their priorities list, where blockchain led with 33 percent.

Provide Solutions that Unlock Even More Value

With RFID interest on the rise, technology solutions providers (TSPs) should seize the opportunity to help retailers evaluate their options and choose technology with a track record of success in this growing space.

Today’s retail landscape is filled with challenges, and RFID offers the answer to mounting competition in an industry that grows more cutthroat by the day. TSPs who educate themselves on RFID’s potential will become trusted advisors and experts to omnichannel retailers looking for the next leg up. Position your business for growth by brushing up on a technology that’s fast becoming the foundation for modern retail.