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How RFID can improve real-time inventory management for retailers

How RFID can improve real-time inventory management for retailers
Demand for RFID (radio frequency identification) is on the rise in the retail sector. This is partly a result of the growing need for real-time inventory tracking and the growth of omnichannel retailing, according to a report by Frost & Sullivan.

Retailers have been using RFID for quite some time; however, as analytics have improved and the need for more data has increased, more and more retailers are adopting RFID solutions. “Soft goods retailers are already beginning to see real benefits from RFID,” said Don Taylor, VP of Business Development at Newave Sensor Solutions. According to Taylor, some soft goods retailers are already quoting 10- to 30-percent inventory savings with RFID while keeping more goods on their shelves and improving inventory accuracy.

“We have found that using real-time technology such as RFID, when compared to current inventory methods, is much more accurate,” Taylor added. “This technology provides more information to manage and track products and is far less labor intensive and more accurate.”

He noted that audits in particular are highly inaccurate, being just a spot check. “The analogy is that audits are like a photo at one point in time compared to real-time smart technology that is like a video showing exactly what was happening over a specified period of time,” Taylor explained.

Advantages of RFID in retail

Don Taylor, VP, Business Development,
Newave Sensor Solutions
Harley Feldman, Co-Founder and CMO of Seeonic opined that using passive RFID tags is the best method for counting in-store inventory. He explained that using RFID tags gives retailers the ability to perform in-store inventory much more quickly and accurately than manual counting, while also allowing them to easily collect inventory data electronically. Data from RFID also provides retailers with the ability to use analytics to monitor store inventory, such as time-on-shelf by SKU or item, react to changes in demand more quickly, and monitor items from the time they enter the store until sold.

Still, there are challenges to using RFID. For one, the technical limitations of 10 to 15 feet of read distance and difficulty with metal and liquid items can be problematic; although, future developments in RFID are expected to improve upon these issues. Then there is the issue of the item’s manufacturer needing to be the one to create and attach the RFID tags. Over the last few years, though, it has become more commonplace for manufacturers to place RFID tags on merchandise, especially in apparel, Feldman noted.

The cost of an RFID solution is also a barrier — costs include readers, antennas, the tags, etc. “The tags are typically in the US$0.06 to $0.09 range and carry the SKU of the retail item along with a unique serial number for that individual item,” Feldman said. However, as the technology continues to develop and advance, and as demand continues to rise, the price for RFID is expected to decrease making costs more affordable.

RFID and smart shelves

To get around the issue of tagging each individual item, Newave developed a patented RFID system to track merchandise availability in real-time without tagging each item with an RFID label. This system focuses on grocery, convenience and mass merchandise retailers.

Newave’s Smart Shelf system provides retailers with information on shelf item movement in seconds using the company’s patented wave RFID antenna technology. When an item leaves the shelf, Newave’s Smart Shelf sees it even when it is not tagged. Based on criteria set by the retailer for low inventory limits, the Smart Shelf software signals an alert in real time that can be sent on-site to store managers, or remotely to merchandising and loss prevention personnel as well as suppliers. It can also trigger an audio alarm message and a video capture alert within the store.

“Newave’s Smart Shelf system strives to make it easy to get real-time in or out-of-stock shelf information available anytime to any authorized person or group,” explained Taylor. Such a system could greatly lower costs by providing on-shelf merchandise availability without the need for tagging the products on the shelf.


Product Adopted:
Retail, Retail


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