RFID technology originated from World War II radar, but this not advanced technology is helping today's retail companies develop an omni channel supply chain strategy.

For a technology that has existed for more than 80 years, RFID (radio frequency identification) is as fresh and important as ever.

RFID can be traced back to the emergence of radar technology during World War II. The British, American and German armies use it to identify whether aircraft are friends or enemies.

The first patent of commercial RFID tag was obtained in 1973. Since then, the technology has been used in manufacturing, logistics and delivery networks, where its position in positioning and monitoring related products is crucial, as well as in a wide range of fields including consumer goods, automobiles, electronics, agriculture and retail.

Large scale use makes RFID the key to the omni channel supply chain

Although it has been widely used in the past few decades, RFID began to play a more critical role in the supply chain only after it was widely used. Covid-19 forces enterprises to quickly adjust their configuration and deployment to meet new customer preferences. In particular, the great transformation from in store shopping to online shopping, as well as the rise of the omni channel retail model since then.

Product placement tracking and traceability have never been so important, especially for the retail industry, now we need a solution that can provide real-time and comprehensive channel inventory visualization. As a result, RFID technology has also begun to transform omni-channel in store elements into more online space, because they can provide consumers with flexibility, convenience and more choices.

Capgemini, a French multinational IT services and consulting company, recently conducted a survey of retailers and shoppers. It found that 40% of consumers think shopping in stores is a chore, and at present, more than half of retailers (54%) admit that they have made slow progress in digitizing physical stores.

For example, most retailers do not provide inventory inspection to consumers in front of physical store counters, although 75% of consumers tell Capgemini that they want this service.

But that is changing. In the United States, department stores including Nordstrom, JC Penney, Sears and macy's have now begun to use their stores as operating centers.

RFID helps retailers expand purchasing methods

More and more retailers begin to provide third-party or in store pick-up options, and look for ways to implement click pick-up orders in stores to save logistics costs. The key to this model is inventory visualization, which allows online orders to be confirmed at the store level, and the most critical is the implementation of RFID solutions.

As one of the largest RFID equipment and software companies in the world, Impinj is keenly aware of the new application scenarios of the so-called "old" technology.

The company was founded in 2000 and is headquartered in Seattle, Washington, on the west coast of the United States. Gaylene Meyer, vice president of global marketing and communications, explained why RFID is the perfect solution to the inventory challenge brought by Omni channels.

"Retail stores may be in a chaotic environment, making it difficult to track inventory," she said. "However, because RFID can read 1000 items at the same time without human intervention, it is the correct technology to calculate the inventory of the whole store. With the accurate data of each item in each store, retailers can accurately tell whether there are goods in the stores near online shopping.

Logistics costs can be reduced through RFID Technology

Meyer pointed out that RFID is also an ideal choice to help enterprises turn stores into operation centers to save logistics costs.

"Online shoppers can get accurate and real-time data about the inventory of retail stores. Then, retailers will achieve cost-effectiveness by shipping from the nearest location to customers, reducing the demand for excess warehouse space, increasing inventory turnover and avoiding price cuts," she said

Meyer said that Nike, a sportswear giant, traced "more than 1billion inventory units, and the visualization of all stores was 99.99%. He continued to quote John Donahoe, Nike's CEO, who said RFID was" the most accurate tool to meet customers' specific needs at the right time ".

Speaking of food retail, Meyer added that RFID allows food to be tracked from site to store to achieve a fully visible and traceable supply chain, providing customers with information about their food sources, and providing traceability to manufacturers in the event of product recalls.

In addition to helping meet the online and in store needs of individual consumers, RFID also helps retailers make more accurate demand forecasts.

Demand forecasting "easier to use RFID system"

"RFID is 25 times faster than manual barcode scanning, and the accuracy is as high as 99%," Meyer said. "This level of inventory accuracy and insight enables retailers to sell to the last item in inventory, thereby better managing costs and forecasting demand more accurately.

In this regard, Meyer provided an example of fashion clothing retailer Zara, which has integrated RFID into its stores.

"RFID is an integral part of the company's technology strategy," she said. "It has changed the way stores operate. Before using RFID, Zara employees scan the barcode of each item for inventory inspection every six months, which takes a team of 40 employees five hours to complete. If using RFID handheld readers, a team of 10 people can complete the same task in half the time.

RFID can also improve customers' in store shopping experience, enabling them to quickly find products they are interested in and verify whether there are still goods in the store in advance. Store staff can also easily find items with RFID tags in the store, or arrange to transport items from one location to another.

"No one is willing to fumble and scan the barcode at the self-service checkout counter," Meyer said. "In addition, after covid-19, shoppers with impaired immune system prefer to reduce close contact with others, which makes RFID contactless self-service checkout perfect. It is not only fast and accurate, but also allows to maintain social distance. RFID helps to make the retail experience a positive and pleasant thing for customers.

Low cost RFID makes it an ideal choice for the global Internet of things system

Meyer said that far away from the retail industry and focusing on the future of RFID, the low cost of RFID tags makes this technology an ideal choice for large-scale IOT systems that connect thousands, millions or billions of things.

"RFID technology has been developing since it was first used for retail inventory tracking," she said. "Large global companies are now deploying RFID in their enterprises. For example, Delta Airlines uses it to track passengers' luggage from check-in to when it returns to passengers.

"The automotive industry, including Daimler AG, Volvo, Audi and Volkswagen, uses RFID as part of its automated assembly line to identify parts and ensure that each off-line vehicle is consistent with the configuration selected by its new owner.