A store may be closer to the customer, which means it has a reduced last mile cost. As a result, retailers can optimize their omnichannel experiences and boost bottom-line results.įor instance, having accurate visibility into inventory counts can help retailers decide when it’s better to ship from a store versus a warehouse. A big reason why is because RFID isn’t a solution that stands alone - the information garnered from these tags can be fed into forecasting and other optimization technologies to generate additional efficiencies, according to Buzek. Turning RFID Technology into Business ValueĪccording to IHL Group research, retailers already using RFID in 2022 saw 83% higher sales growth and 80% higher profits. As a result, IDTechEx expects 39.3 billion passive RFID tags to be sold in 2023, up from 33 billion in 2022.
In 2021, the average cost of an RFID tag was four cents, down 80% from 2011, according to McKinsey. “RFID is the killer app for this for most products, and this can be augmented by the use of computervision.”Īdoption also is rising because prices are dropping. “Retailers need to have a single view of their inventory across channels, and then that data has to be up-to-date and accurate,” said Greg Buzek, Founder and President of IHL Group in an interview with Retail TouchPoints. In a recent special report, experts outlined why RFID is now part of the critical supply chain visibility toolkit, which also includes predictive demand planning and artificial intelligence (AI). “How do you want to run the most stable parts of your business, versus where you have more volatility? How do you ensure that your supply chain is fungible enough to absorb the changes, and then pivot on that information? Visibility allows you to innovate, anticipate and see the shock waves coming with just enough advance notice that you can react before getting fully paralyzed by them.” “The biggest advantage that comes with is knowing where you have stability in your supply chain,” said Balika Sonthalia, Senior Partner and Head of the Strategic Operations Practice for the Americas at Kearney in an interview with Retail TouchPoints. And RFID is key to achieving this visibility. However, with retailers feeling more pressure to streamline omnichannel fulfillment, supply chain visibility has risen to the top of the priority list. Even though RFID has proven its value numerous times, retailer adoption has never truly reached its peak.
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