Retailers Get Big Sales Bump by Investing in RFID Technology

Overhead and handheld radio-frequency identification (RFID) technology is transforming brick-and-mortar retail. Today, nearly 73 percent of all retailers are implementing RFID to track their inventory. The benefit is clear: As consumer shopping behaviors and expectations have shifted dramatically in the digital age, customers now expect to find whatever they want, when they want it, and RFID has helped retailers come a long way to delivering on these expectations. Those that have implemented RFID have seen an average of over 25 percent improvement in inventory accuracy and a profit margin boosted by 60.7 percent. RFID tech spending shows no signs of slowing down, either—it’s growing at over 22 percent per year.

RFID Technology and Handhelds Versus Fixed/Overhead Solutions
But within the RFID space, a debate emerges: Which is better, handheld or overhead (also known as fixed)? There is a common misconception that handhelds provide 80 percent of the RFID benefits at only 20 percent of the cost, implying that RFID handhelds are cheaper and easier to implement than overhead RFID. If retailers are considering only the cost of hardware when making a decision, they might think they’re getting a better deal with a handheld RFID, since only a few scanners are required per store. Fixed sensors might be more expensive and difficult to deploy initially, but over time, it’s handhelds that are likely to prove more expensive. While the upfront cost for an overhead might be, on average, 30 percent higher, ongoing labor cost can be 90 percent lower with an overhead solution.

Two women shop in a store.

 

Transforming the Brick-and-Mortar Store with Overhead RFID Solutions
While it’s certainly true that any RFID deployment will have its benefits, a retailer will unlock the full spectrum of usage models only with an overhead infrastructure, since it’s only with an overhead solution that retailers can truly automate processes, drive labor efficiencies, get enhanced in-store digital experiences for their customers, and get real-time data with actionable insights.

Tasks performed with a handheld will take substantially more time to do than with an overhead system, and consistency and freshness of the inventory information will be affected as well. In addition, only overhead solutions can provide added benefits such as real-time inventory tracking that enables unified commerce fulfillment or in-store pickup—not to mention the many other in-store value-adds for overheads, such as interactive experience applications like smart fitting rooms, digital interactions with products, dynamic planograms, merchandise flow tracking, self-checkout, and many more.

An overhead solution is also a future-proof investment that can be leveraged as new use cases become important, such as pick-path optimization for ship from store, item location, zone management for larger stores, and consideration tracking, to name some. There is also the added ability to audit employee tasks, ensuring items are not only moved to the floor, but in the right spot. Overheads also provide better information around loss prevention and item theft and have a better ability to track display effectiveness.

Three people shop in a store.

 

Getting to the Sale Faster
The cost of a handheld reader goes far beyond just the price tag of the hardware. The true cost can lead to inventory distortion, a fragmented, lackluster customer experience, and higher workforce and labor inefficiencies. Because the customer experience is driven by positive personal interaction—something made possible only through an efficient workforce and accurate inventory—it’s the quality of the customer experience that will ultimately bring the process full circle with the sales transaction.

Getting to the sale faster means automating many of the in-store processes that take the retail employee’s attention away from the customer. And the way to enhance the customer experience and get to the sale faster isn’t simply to add more associates to the fold or to make current associates do more handheld RFID scanning. That will only increase operating costs and reduce customer-facing experiences. Even once a retailer has spent the time and money to train an employee on how to properly scan a store with a handheld, the inventory accuracy is still only as good as the last scan.

Intel RRS
The Intel Responsive Retail Sensor (Intel RRS) is a smart retail solution that provides retailers with the best of both the physical and online worlds. It connects the store, bringing digital convenience and intelligence, while also driving revenue growth and reinventing the customer experience. It automates previous repetitive tasks by employees, instead allowing them to focus on customer service, and it optimizes inventory management by reducing out-of-stock and misplaced items. But it also creates new sources of data that can be used to understand shopper browsing and buying habits.

Visit intel.com/retail to learn more about how Intel technology is shaping the future of responsive retail. To stay informed about Intel IoT developments, subscribe to our RSS feed for email notifications of blog updates, or visit intel.com/IoTLinkedInFacebook and Twitter.

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