The application of RFID technology in the retail industry and the challenges it faces

In recent years, RFID technology has attracted the attention of all walks of life as the focus, and the application of RFID technology has promoted the development of all walks of life, and the Retail Industry is no exception. In recent years, some major retailers in the United States such as Wal-Mart, Target and Albertsons have begun to require their suppliers to deploy RFID technology at the pallet level. Imagine that when a consumer pushes a product equipped with an RFID electronic tag through the supermarket exit, the UHF reader will read the information of the product in an instant, so that people don't need to waste time queuing up for checkout. In terms of its practicality, it is undeniable that RFID technology is indeed very convenient.

What are the applications of RFID technology in the retail industry?

The application of RFID technology in the retail industry mainly focuses on five aspects: supply chain management, inventory management, in-Store product management, customer relationship management and solving the problem of out-of-stock products. Here we take a look!

1. Supply chain management RFID was used earlier in the retail industry. Through RFID technology, the supply chain system can track product dynamics more easily and automatically, so that items can be truly automated.

2. In inventory management, RFID is mainly used to manage the entry and exit of warehouse goods by using fixed readers or UHF access doors, as well as scanning and counting commodities on warehouse shelves with UHF handheld devices, which improves the The work efficiency of goods entering and exiting, picking and inventorying; improving inventory visibility to upstream suppliers and timely supply; connecting with the automatic replenishment system of the shelves in the store for timely replenishment. If the inventory is transparent enough, it can theoretically reduce the amount of safety stock that must be kept in the warehouse, thereby reducing the amount of inventory for all commodities and saving a lot of expenses.

3. The in-store product management is mainly through the RFID mobile terminal to complete the daily inventory and accounting.

4. RFID applications in customer relationship management are mainly focused on self-checkout and improving customers' in-store shopping experience. Stores collect information on products that have been tried, and adjust store display layouts accordingly, providing reference for stores to better understand consumer needs and carry out more accurate product production and marketing.

5. Solving the Out-of-Stock Problem One of the biggest existing problems for retailers is that when a consumer wants to buy a product but is told that the product is out of stock, in most cases he will choose to buy it elsewhere. As a result, retailers not only lose the opportunity to sell goods, but also lose the possibility for consumers to buy other products in their stores. Therefore, retailers have achieved the important goal of maximizing supply chain transparency through RFID technology.

At present, there are still many challenges in the popularization of RFID technology. Let's briefly analyze the main challenges below!

1. The reading accuracy needs to be improved

Data integrity and correctness are important factors that determine the performance of the RFID system. Multiple electronic tags within the scope of the UHF reader-writer simultaneously send data to the UHF reader-writer or when one reader-writer is within the scope of another reader-writer , Interference between signals occurs, resulting in data errors received by the reader, that is, the label cannot be completely identified, or the wrong label is identified. Simply put, due to multi-label identification, it is easy to read or misread, and it is also easy to be disturbed by the environment in a special environment. Therefore, multi-target recognition is not only the biggest advantage of RFID, but also a technical difficulty that needs to be solved urgently.

2. Cost

Although the cost of RFID tags, readers and software has been falling, the cost of RFID deployment remains prohibitive for many companies wanting to track inventory. Moreover, the current application of RFID technology is almost all upstream investment and downstream benefit, which greatly damages the enthusiasm of upstream enterprises to invest in RFID technology. Especially in countries where labor costs are relatively low, many companies will choose to increase staff deployment instead of transforming the system.

Specifically, the enterprise needs to paste the printed RFID electronic label on each product that needs to be identified, and at the same time needs to be equipped with relevant identification equipment such as UHF access doors, handheld devices, etc. In addition, enterprises also need to integrate RFID with the original ERP system. The business process will be more complicated than before, and production, transportation, and warehousing must be coordinated. Therefore, the cost of initial investment in RFID deployment is relatively high, and it requires a certain amount of motivation and courage to advance.

3. It is difficult to unify technical standards

At present, it is difficult to unify the technical standards of RFID in the world, which makes product development and application positioning confusing. The mainstream technical standards are trying to continuously strengthen their own influence in terms of promotion. As far as China is concerned, it is also actively seeking the independence of its own technical standards in order to protect its own technological, economic and security interests. Therefore, there is a problem of promotion bottleneck in the unification of RFID technical standards.

The ROI of RFID technology is not significant in the short term. Just like the barcode back then, it took 25 years of development to reach the level of application it is today. Therefore, the future of RFID technology is still promising!