January 28, 2022
Radio Frequency Identification (RFID) technology is again being seen as a solution for item-level inventory tracking, but its secondary marketing, analytics, and research benefits are also attracting attention.
Potential applications in the past have included the automatic reordering of commodities such as orange juice or razor blades, as RFID chips inside products indicate when quantities are low.
Brendan Witcher, VP, Principal Analyst at Forrester Research, however, recently said advertising age that RFID would be more likely to be used for marketing in stores since they are already equipped with readers.
Stores could use RFID to see which items are loaded together in baskets and send promotional offers for related items. Retailers could track a shopper’s journey and get insights into how choosing an item or being exposed to an offer influences the rest of their buying journey. The technology could also help accelerate the implementation of automated, contactless payment.
A McKinsey to study last year also noted several “last mile” advances involving RFID that “can attract customers seeking dynamic new experiences, drive revenue, and generate valuable behavioral insights.”
RFID, for example, could support “smart” fitting rooms, where shoppers get personalized information about other sizes and colors in stock, learn how to style a garment, and receive personalized recommendations to complete their look, according to McKinsey.
Reports came in last year revealing that the use of RFID in North American retail had grown significantly in popularity as stores implemented their use to improve in-store inventory accuracy when fulfillment of online orders for pickup or delivery. Retailers using RFID tend to have in-store inventory accuracy of around 95% or better, compared to around 65% for those without, according to RFID Lab, Auburn University.
Increased adoption has also been driven by a significant reduction in the price of RFID chips over the past decade as well as improved accuracy and read range.
Johan Stenstrom, supply chain developer at Stadium AB, the Swedish sports channel, said WWD last year, “Trying to satisfy a customer with 70% accuracy is simply not possible.”
DISCUSSION QUESTIONS: What do you think of the potential benefits of RFID for marketing, analytics and customer research? Has that changed since the initial RFID hype arrived? Do you see a greater in-home or in-store benefit for marketers?
“I’m not sure of the marketing impact, but the requirement for real-time inventory is a pretty compelling reason to implement item-level RFID.”