While the on-demand economy has led to many brick-and-mortar stores declining, omnichannel services continue to grow. Smart supply chain management with advanced tracking and monitoring capabilities enabled by RAIN (Radio frequency IdentificatioN) RFID are empowering retailers to address a multitude of new use cases. In combination with consumer-to-goods interaction through NFC (Near Field Communication) tags are increasingly adopted as key elements of consumer interaction and loyalty strategies. Interactive store functionalities, brand verification solutions, and contactless payment with NFC smart phones are also gaining traction as an integral part of the consumer shopping experience.
Here is NXP’s top global trends in RFID for the retail market:
Trend 1: Retailers are embracing RFID to enhance the “smart” consumer shopping experience
Today, smart fitting rooms equipped with intelligent mirrors assist and enhance the shopping experience. Smart mirrors read the RAIN RFID tag of the merchandise and displays the item on a touchscreen behind the mirror’s glass while a recommendation engine displays matching accessories such as shoes or a purse. By enabling interaction between the customer and shop assistants or feedback from friends via social media, the smart fitting room meets demands of a new generation of customers that perceive smart connectivity as a natural enhancement of shopping experiences. Some high-end retailers like Ralph Lauren1 or Rebecca Minkoff2 attribute interactive changing rooms to a 30 percent increase in sales, confirming the attractiveness of smart assets in the physical shop.
Trend 2: Retailers are leveraging RAIN RFID for omnichannel smart-supply chain management
With the advent of the on-demand economy, multichannel processes and omnichannel retailing have grown considerably to address the need for accurate information about stock and location of goods. Brick-and-mortar stores are leveraging predictive analysis software that allows optimization of processes and enables retailers to recognize sales potential in order to introduce new and special “click and collect” departments into the store. In order to power both of these solutions and turn big data into smart data, retailers are utilizing RAIN RFID technology, as it delivers accurate real-time data to software analytics. Some retailers have confirmed that smart-supply chain management helps maximize shares in the competitive customer market, for example, sports retailer, Decathlon3, reported that sales have increased by 2.5 percent with improved stock visibility, and Macy’s4 recently reported it reduced inventory costs by $1 billion as a result of RFID implementation.
Trend 3: Retailers are integrating RAIN RFID solutions to monitor perishable goods
For food retailers, getting the products from the warehouse to the shelves at the right time before expiration is a challenge. These industries often do not have accurate insight in durability of perishable goods in inventory. This results in unnecessary waste worth $162 billion annually, not to mention the health risks and environmental impact. According to an industry study, a $10 billion retailer can reduce losses by up to $60 million a year through effective shrinkage and freshness management. To maximize such savings, food retailers are conducting large scale testing of RAIN RFID solutions, including tracking and sensing technology for temperature and humidity monitoring. Such solutions allow distributors, logistic companies and wholesalers to locate their orders online, in real-time. In combination with electronic shelf labels, retailers would be able to react to expiration dates with reduced prices, or even make general sales campaigns directly visible to the customer.
Trend 4: Enhanced consumer interaction and contactless payment via Smart phone with NFC will continue to gain traction
NXP’s RFID product portfolio supports the entire retail ecosystem, including reader chips enabling smartphones to read NFC tags and establish Internet-of-Things (IoT) connection and the reader chips in the Point-of-Sale (POS) that enable secure contactless payments via smartphones or payment cards. Contactless payment is increasingly seen as an integral part of a seamless shopping experience by both the customer and retail partners.