“RFID technology has helped apparel retailers to improve their efficiency and profitability while also offering customers a better shopping experience.”
Retail is not new to technology or experimenting with new technologies. With the long list of challenges retail faces, be it supply chain, lack of visibility on articles, logistics, inventory and stock, or the most importantly- order fulfillment and customer experience, retail is all about acting fast and taking the right decisions at the right time. Take fashion retail for example, fashion changes over night and if you’re a night late, you are too late. Retail is about giving customers what they want and when they want it and that has been the driving force behind most retail businesses, be it apparel, FMCG, or fashion retail.
With technologies such as IoT (Internet of Things) and RFID, retail and apparel businesses can give customers what they want which starts by enabling a simple and transparent, and convenient shopping experience, be it online or offline in retail/apparel stores.
The Business Challenge for Retail
Leveraging Radio Frequency Identification (RFID) for an omnichannel retail experience is in trend now, especially post pandemic when customer demand has plummeted and customer expectations have changed significantly, posing a new set of problems for retailers. With people ordering groceries and apparel online, and visiting less physical stores post pandemic, retail businesses face a new challenge in the form of e-commerce and there is an urgent need for omnichannel customer engagement. Retail businesses are now coming up with multiple physical and digital touch points to engage customers in new ways.
Trends like BOPIS (buy online, pick up in-store), fast return and refund, in store return etc. are shaping the way how modern day retail and fashion will look like and technologies like RFID and BLE (Bluetooth Low Energy) have proven to be instrumental.
According to US department of commerce, retail saw a change of 8.1% in 2022 over 2021, and e-commerce contributed to 14.6% of total sales. In the post pandemic world, this no. is bound to go up, reaching 23% of total sales by 2025 itself.
How is RFID used in Apparel Retail? Clothes with RFID tags
Radio Frequency Identification (RFID) has revolutionized the apparel retail industry in recent years, providing valuable benefits to businesses and customers alike. The RFID technology allows retailers to track products through their supply chain, from manufacturing to end-consumer, by using small embedded chips that transmit data wirelessly. In the apparel industry, RFID tags are now commonly used to track clothing items, allowing retailers to offer better inventory control with reduced time to take inventory, a job that would take 4-5 days before but now can be done in 2-3 hours. It also allows improved efficiency and accuracy, and an overall enhanced shopping experience for shoppers.
Various wash care RFID labels are available such as taffeta RFID labels, RFID apparel tags made of polyester etc. that last up to 200 wash cycles without fail.
Benefits of RFID solutions
Use of RFID tags in retail has several benefits and not only for consumers and retailers but for suppliers as well. The retail giant Walmart started the RFID pilot project way back in 2006-07 and realized the huge potential it offered in terms of tracking the supply boxes and quick inventory control but was limited by huge RFID implementation costs. Besides, the RFID technology has evolved over the last decade and passive UHF RFID tag prices have come down significantly from 40-50 cents per tag to just 4-5 cents per tag. This presents a great opportunity for retail and apparel businesses such as Walmart, Macy’s, H&M, Zara, Target etc. to leverage RFID technology for track and trace applications.
Let’s see some of the benefits RFID has to offer in retail and apparel industry:
In the fashion industry, the RFID technology is primarily used for improved inventory management and control. UHF RFID labels are often placed on the individual clothing items, allowing for easy identification and tracking within a store’s inventory system. As a result, retailers can accurately monitor inventory levels, reduce manual errors, and minimize human intervention in stock management.
RFID for preventing Retail Shrinkage
RFID tags can also help retailers protect against theft and loss. The tags contain unique identifiers that can be used to track and locate individual items if they are lost or stolen. According to a report by Forbes, the Retail industry loses 100B USD every year due to retail shrinkage and Organized Retail Crimes (ORC) are a major factor in retail theft and even violence in retail environment. RFID coupled with AI and other security solutions has been very useful in this regard.
RFID enables great customer experience
Another significant advantage of RFID technology is that it enables retailers to provide customers with a more personalized shopping experience. By tracking individual items, retailers can easily locate specific products and sizes for customers. Also, RFID tags can be used to create smart mirrors or self-checkout systems, allowing for a faster and easier checkout process.
With smart shopping carts and tagging articles with chipless RFID tags, the waiting time in retail has reduced significantly, leading to enhanced shopping experience for shoppers.
To summarize, the RFID technology has helped apparel retailers to improve their efficiency and profitability while also offering customers a better shopping experience. The adoption of RFID solutions is expected to continue to grow in the coming years as retailers strive to optimize their operations and stay ahead of the competition.
It is a powerful tool in the apparel retail industry, providing valuable benefits to both businesses and customers. Retailers can improve inventory management, reduce costs, and offer a more personalized shopping experience simply by tagging articles with RFID tags. RFID tagging of shoes and apparel also raises privacy concerns and retail industry should ensure that customer data and privacy is not compromised.
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