The technology gives companies the ability to meet supply chain demands, from decreasing delivery times to reducing overhead and worker costs.

Much has been written about all that has changed in the retail supply chain. Manufacturers are seeking ways to automate and make more efficient both their inventory controls and delivery methods, while distributors seek the means to better control inventory and track where merchandise is located within a warehouse, at a store or in a customer's cart. The endpoint retailer seeks ways to meet the swiftly changing buying habits of the post-COVID customer. RFID, despite its long history in the manufacturing and distributing world, is finding new life as it increases the accuracy of the supply chain, from decreasing delivery times to reducing overhead and worker costs.

RFID Enables Inventory Accuracy

On the manufacturing side, freight capacity has decreased due to fewer drivers and carriers, while the price of fuel has skyrocketed. No longer do companies merely move product around the country—they now use "demand signals" that track an item on its journey from warehouse to distribution center to customer. Incorporating RFID into the supply chain, including tagging, can provide this information.

Additionally, RFID enables increased automation and reduces the time that a product sits on a dock, away from a customer. The accuracy of RFID-tagged products replaces traditional scanning requiring human labor, which can be inaccurate. While reducing the labor needed to determine product shipment numbers, tags also decrease the amount of time required to unload product from a truck by combining tags and automated carrier unloading. Indeed, there is some speculation that RFID can lower receiving times and costs by more than 30 percent—a cost savings all the more important during a time of decreased labor and increased manufacturing costs.

Changing Consumer Buying Habits

Increased competition for consumer attention and the need to provide instant shopping gratification require inventory that meets consumer demands. The rise in online shopping and curbside pickup has made accurate inventory critical to a retailer's success. For today's consumers, an efficient and reliable shopping experience has driven the need for technology that increases inventory accuracy. Consumers who are not able to buy what they want, when they want, will shop elsewhere.

In addition to giving retailers the tools needed to maintain inventory, RFID helps retailers meet the changing buying habits of consumers. With the ability to order goods from smartphones and laptops, consumers expect accurate availability of goods. RFID-tagged products let a retailer know the exact inventory in the store, including items that potentially may be in a customer's cart.

No longer is it necessary to employ a worker to count stock in a backroom or on shelves. This ability to automate inventory tracking reduces the number of employees necessary to meet the demands of the post-pandemic consumer.

New Opportunities Ahead

RFID also allows retailers to track the in-person browsing history of consumers and better signal what customers want in terms of product. Indeed, RFID improves the usefulness of algorithms that predict buying behaviors.

While there may be some mistrust of RFID—employees are worried about being made redundant, manufacturers and distributors are wary of the increased need to collaborate—the wave of the future for retail demands accuracy in terms of shipment, warehousing and purchasing to satisfy the endpoint consumer. RFID, a technology that has been around for more than a decade, can meet these demands by providing retailers with the means to rely increasingly on data. Coupled with the Internet of Things, RFID supports today's reimagined retail world.

Kevin Sanderson is an account executive at Velociti, specializing in bringing the IoT to the temperature-controlled supply chain. He has more than 20 years of experience in food manufacturing and distribution, during which he developed a passion for implementing the newest technology throughout the ecosystem. Velociti is a global provider of enterprise technology solutions for the logistics environment.

Originally appeared in RFID Journal. Written by Velociti Account Executive Kevin Sanderson, May 15, 2022.