Radio Frequency Identification (RFID) is not a new technology. It has been around since World War 2. However, retailers have just started to realize its potential in the past decade or so. There are a couple of ways to take advantage of this amazing technology within a store. For a refresher, please check out our previous article The Basics of RFID. But in this article we will be discussing specifically the stationary read points. These are devices that are meant to be placed in an area and stay there. This area might be on the ceiling overlooking a department or next to an exit to prevent theft.
While the cost can be more than other smaller systems, stationary point readers can provide quite a few advantages. The main reason to use stationary point RFID are inventory management and shrink reduction.
For retailers who are new to RFID, it might be hard to understand how big a difference RFID makes. But the impacts are far reaching, from reducing costs to improving customer experience to easier transfers between stores.
Every retailer knows how much of a pain it is to do inventory. The entire store has to be shut down, a third party hired to help, and the whole process is tedious. All of this is unnecessary with RFID. Because the readers constantly scan, inventory is always updated. This gives the store a perfect view of what inventory they have and where. The system can split the inventory in different areas of the store. For instance, there might be 15 items of a SKU on the sales floor and 35 more in the back stock.
Additionally, the store can compare current stock on the floor against the threshold provided. The system then is able to generate replenishment alerts on items before they go out of stock. Out of stock problems are a common pain point for retailers, as 42% of customers will not buy the item at that retailer if they are out of stock¹. They will not wait for it to restock, or order online. They will either not buy the item at all, or will go to a competitor who has that item. RFID provides a direct increase in revenue by reducing avoidable out-of-stock situations. Employees can move back stock to the sales floor, then order more back stock to keep the balance right. Because of the confidence that retailers can have in their inventory count, there is an average 10% reduction in stock by companies that have RFID as they remove the bloat and overstock².
But more than just within one retail store, RFID is able to help with inter-store transfers. The antennae can be put at the receiving and sending docks, tracking all tags that go through. The retailer will put a tag to each crate or pallet. They can then track the amount of inventory entering and leaving the warehouse, without opening each one to verify. The RFID system can then be combined with an inventory tracking solution. This allows the retailer to create new transfer slips to update both stores without human error.
The second major thing that RFID can do for retail stores is reduce the shrink. The store can install exit sensors at both customer and employee exits. The RFID sensors can check that each electronic product code (EPC) has been purchased. The EPC is similar to a serial number, acting as a unique identifier for each tag. Any tag that is not purchased before exiting will set off an audio or visual signal to alert loss prevention. Additionally, using the EPC, the system can log exactly which items left and set off the alarm. This allows the managers to know how many and which items were taken. This reduces overall shrink, and any shrink that does occur is all known and documented. An increase in shrink visibility allows the store to give more accurate inventory levels and financial analysis.
So stationary RFID points excel in large areas, giving the retailer a constant view of their inventory levels and location.
It keeps staff aware of any out of stock situations. It is able to assist with replenishment, thus increasing sales. An accurate inventory count allows the retailer to remove bloat stock, reducing costs. Additionally, the system works to reduce shrink. It includes theft deterrence, as well as logging exactly which items were taken and at what time. For more information, please reach out to us.
¹ RFID’s Impact on Out of Stocks: A Sales Velocity Analysis. 2006, p. 4, RFID’s Impact on Out of Stocks: A Sales Velocity Analysis.
² RFID-Enabled Visibility and Retail Inventory Record Inaccuracy. p. 3, RFID-Enabled Visibility and Retail Inventory Record Innaccuracy.