With the growth of e-commerce, the digital world is becoming more and more integrated into consumers' daily lives, and the distinction between online and offline sales channels has become blurred. More and more customers are already using omnichannel services such as online purchases, in-store pickups, and more. Retailers who are unable to offer flexible ways to sell online and offline are now at a disadvantage.
As a result, many retailers are moving to digital transformation to deliver a superior consumer experience. Item-level RFID is an initiative that enhances the customer experience while providing a long-term return on investment. The technology can help retailers achieve better inventory management, inventory visibility, and more, all of which can lead to significant operational benefits. However, many retailers find the return on investment of implementing RFID difficult to calculate or achieve.
In order to assess whether the investment in RFID technology is worth it, retailers must understand the RFID ROI.
It is usually considered from the following three aspects:
1. Inventory management
Before deploying RFID technology, retailers must first consider the impact of stock-outs or excess inventory on sales and profits. Every item that is not in the mandated inventory can lead to lower profit margins, increased labor, and excessive capital expenditures.
RFID technology can better use employees for the functions that are most effective and impactful for their business, rather than manual inventory processes or inventory counts.
RFID technology is a very effective way to increase the speed at which products are shipped, received, or stored, and to reduce the time spent searching for lost items. In fact, RFID solutions enable retailers to achieve up to 99% inventory accuracy and achieve greater speeds in their stores and supply chains while reducing human impact.
2. Improve omni-channel operations
Omni-channel operations have become one of the most promising ways for brands to grow. Whether it's in distribution centers, stores, in transit, or with suppliers' orders, retailers need highly accurate inventory data to ensure the reliability of the order process. The accuracy of inventory in stores and distribution centers is critical to effectively executing omnichannel sales.
RFID provides accuracy and predictability to minimize costs, optimize asset utilization, and enable brands to provide consistent, and sometimes unique, services to their customers. RFID technology can provide tremendous value to supply chains and stores, and have a significant impact on business processes and support systems.
3. Enhance customer experience
In retail, ROI is critical to considering new technology implementations. Managers are not only concerned with how to cut operational costs, but also about improving the overall customer experience and enhancing brand image.
RFID enhances the in-store experience for higher customer satisfaction. Stores reduce checkout times while reducing labor and inventory errors. RFID in retail is used throughout the store floor and supply chain, including receiving and shipping, store point-of-sale, and distribution centers. RFID provides more accurate theft data, allowing retailers to focus on their work more efficiently, resulting in a higher ROI.
