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RFID 1-2-3: From Data to Knowledge

Inventory visibility has been at the heart of most RFID deployments. the Reduction of out-of-stocks has been the driver for ROI. Once O-O-S has been solved, data starts stacking up on data servers and allows the RFID users to optimize their operations

 

A well known advocate for RFID in the retail industry, Mr. Roland Leitz of Adler Modemärkte says, that "RFID is not an IT project, RFID is a replenishment project". I would say this is the case for at least 85% the RFID pilots and rollouts I have been involved in. Although the floor fill strategy varies a lot between the current RFID users, one thing remains: once RFID is in place they have more precise information on where their merchandise is. 

3_steps _of _RFID_deployment

RFID 1.0 - Data

We now live in a world where a retailer can see each individual item he has on his channel to the exactness of say one meter. Essentially RFID 1.0 is about each item on a sales floor "calling home" and allowing the retailer to recognize whether or not they create interest.

This year Southern Finland had a warm winter. This was painful especially for the outdoor retailers, since winter gear sold poorly. At the same time, winter gear was still sold during the school break weeks as people head to Lappland for holiday. However, if a store up in Lappland has ordered pink skiing trousers from Brand X and run out of that particular item already before the school break week, there was no chance of getting more from the Brand. However, visibility to own chain information would have allowed them to see that the same trousers are still stocked in the South and allowed them to allocate the stock to where it was needed more. 

 

RFID 2.0 - INFORMATION

RFID 2.0 - which is true already today - enables retailers to use RFID as an input to their Big Data and help them to analyze trends in shoppers' behavior and to allow them to adapt their operations faster than the competition.

Utilizing my previous example

 The Outdoor retailer could have combined the information of non-moving items + weather predictions + PoS data from the past month to realize that the likelyhood of the pink skiing trouser selling in the Southern parts of Finland is very low. In good time, the retailer would have collected the items and shipped them to his stores in the Northern parts of the country where the likelyhood of them selling would be far higher.

RFID 3.0 - KNOWLEDGE

We are promised that soon - within only few years - we will be able to shop in a much more personalized way than we do today. Forerunning retailers today are testing different technological solutions to make that happen:

  • applications and algorythms are built to better understand how the shoppers land at any website
  • iBeacon technologies are used to push information to our mobile devices and to recognize our interest when we visit physical stores
  • a combination of camera technology and RFID to recognize where people and items move within a store
  • social content is introduced on various platforms

RFID will play a part in the game of combining the data of individual shoppers and their interest to certain products efficiently to benefit both the retailer and the shopper. The RFID 3.0 is the world where individual people and products will be recognized, and handled as unique beings.

Continuing with the example of the pink skiing trousers during the warm winter. A person walking to her favourite sportswear store, where the store beacon recognizes her from her phone connecting to the iBeacon system. Her online history is available to the iBeacon system and on the basis of that she gets suggestions of products she might be interested in. As she picks up the pink skiing trousers, the RFID readers embedded in the environment will signal the store Digital Signage system, which will react to any products passing by and try to help the shopper by suggesting more items that fit the pink trousers and/or to finish her shopping basket for example stating that if she reads a certain 2D code from the screen with her mobile phone, she will get a coupon for a special price on these individual trousers.

For an exciting example case, have a look at how people and items are tracked in the Levi Strauss  Co. pilot at Levi's Plaza. 

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