RFID in the Retail Industry

Imagine a shopping cart equipped with a scanner and a touch-screen computer that acts as a virtual personal shopper. As you scan items and put them in your cart, the computer offers information about each product and suggests complementary items. The computer keeps a list of the items in your cart with a running total so you know exactly how much you're spending. When finished shopping, you head to a self-checkout stand or to a cashier. Because your items are already totaled and bagged, the wait time is minimal. All you have to do is pay.

The power behind this hassle-free shopping experience is radio frequency identification (RFID) technology. RFID is helping retailers around the world improve customer satisfaction and increase sales. The technology is transforming the retail industry by offering retailers real-time visibility into inventory and product movement to improving store productivity and loss prevention. Many of the world's largest retailers have mandated RFID tagging by 2005. This move affects more than 200,000 manufacturers and suppliers, driving the worldwide market for hardware and software to support RFID.

Here are just a few ways RFID is improving efficiencies and creating a better customer experience in the retail industry.

Inventory control is often a costly, time-consuming process for retailers. By offering real-time inventory visibility, RFID enables companies to monitor and control inventory supply at all times. By automating the inventory tracking process, stores can keep costs down by maintaining optimum inventory levels-avoiding stock-outs and eliminating unnecessary orders. Tracking capabilities also make it easier to predict product demand. Stores can monitor quick-selling items with increased accuracy, ensuring that their inventory supply is stocked accordingly.

Satisfied customers mean better business for retailers. By using RFID, employees can identify the exact location of any retail item at any time. Customer requests can be handled quickly and easily through access to a centralized database. RFID-tagged items offer store-to-store visibility, so items can be located immediately with the touch of a button. This level of product accessibility results in shorter wait times for customers and offers a better shopping experience. Improving overall store efficiencies ultimately results in greater savings to customers.

RFID can be the personal shopper of the future. By using RFID technology, retailers can collect information about their customers' purchasing trends and offer rewards targeted to those interests. RFID can identify a customer, call up an account history, and enable the retailer to provide value-added services to help create a personalized shopping experience. For example, one clothing retailer in New York is using RFID smart labels to store information about each item in the store, such as fabric content, available sizes and colors, and suggested complementary items or accessories. RFID readers in the fitting rooms are connected to computer monitors so customers can view all the information and make decisions-without ever having to leave the fitting room. And, because privacy is a primary concern, advanced security technology helps to protect all information. Participation is optional for each customer.