What's Your Company's "RFIQ"?

Posted by Advanced Mobile Group on Mar 31, 2021 7:36:39 PM

210401 Whats Your Companys RFIQ - BLOG header

The pandemic-induced spike in eCommerce has been credited with accelerating technology adoption in the supply chain at least five years ahead of what forecasters expected to see by now. But despite the rush to modernize, upgrade, automate and refresh hardware, software, and processes, many facilities are still missing some of their best opportunities to improve productivity with RFID.

One writer coined the term "RFIQ," a sort of litmus test to gauge an organization's or individual's IQ with respect to RFID. When we look at the data and current rates of adoption, it appears that some of the remaining hesitancy exists due to a lack of understanding of this technology and all the applications it now serves.

The Current State of RFID Adoption

According to a recent market research report by Global Industry Analysts, the Radio Frequency Identification (RFID) Technology market was valued at $17.3 billion in 2020, and the forecast for 2027 was revised to $44.7 billion due to pandemic-related accelerations.

The United States currently accounts for 26.9% of the global RFID market, a value of $4.7 billion last year. Retailers are increasingly turning to the technology as they discover the ways that RFID can drive the eCommerce business models that are reshaping this industry.

While RFID adoption slowed during the early 2000s, businesses are finding encouragement in lower implementation costs coupled with a significant return on investment. According to a recent Accenture study, 92% of the North American retailers surveyed indicated they have either adopted RFID or are piloting its use, up from just 34% in 2014.

Most recently, brick-and-mortar sellers have been forced to pivot their business models due to the impact of COVID-19. What has been a global health and economic crisis has also given companies the motivation to make significant changes that will help them emerge with greater efficiencies. These include the digitization of the supply chain, the implementation of eCommerce solutions, and the use of RFID.

Do You Know Your Company's "RFIQ"?

210401 Whats Your Companys RFIQ - BLOG 1 - captionedMarshall Kay, one of the world's leading experts on retail RFID adoption, recently discussed his metric, called "RFIQ," for measuring the IQ of an individual or organization regarding RFID. Specifically, Kay wants your business to ask itself:

  • Do you know what RFID is?
  • Do you understand RFID's upside for consumers?
  • What companies are using RFID?
  • Why should RFID be a priority?
  • In what ways can you use RFID?
  • Why retail employees love RFID?
  • What is RFID's impact on retail property value?

Granted, there isn't a measurable test to figure out your RFIQ, but answering these questions should give you an idea of whether it's high, medium, or low.

When assessing your own, a staff member's, colleague's, or competitor's RFIQ, you can get a sense of what they know by asking just two simple questions:

Does this person know there is existing technology that will inform a retailer precisely what merchandise is sitting on the sales floor or in the stockroom?

Do they also know that this same technology also helps employees retrieve merchandise quicker for eCommerce orders?

The truth is that many organizations and retailers still have low RFIQs. For example, the International Council of Shopping Centers (ICSC) still doesn't focus on this critical technology as something that can help drive success by bridging online and physical retail. Likewise, few Wall Street analysts focus on RFID as a topic of importance when evaluating companies. Raise your hand if you don’t know how much you don’t know about RFID!

But, perhaps they should. In fact, some of the most successful online and offline retailers today are the ones that have embraced RFID technology. Nike is a company that has an incredibly high RFIQ.

On its Q1 2021 earnings call, the company's CFO said, "we now have 100% of our footwear and 75% of our apparel tagged, which is over 1 billion units." Nike understands the benefits of the technology, claiming "RFID is going to drive improved inventory holding costs, and it's also going to help us reduce transportation costs."

Other retailers and brands that have rolled out major RFID deployments in recent years include Macy's, Target, Levi's, and Herman Kay.

Advantages of Using RFID and Easiest Points of Entry

Unfortunately, RFID technology comes with a long list of misconceptions. Among them are that it's costly and doesn't work in certain situations. When the facts are examined, the truth is that it's incredibly affordable and works seamlessly across a variety of applications.

Some of the advantages of using RFID include:

1. Managing Inventory and Tracking Assets

One of the best features of RFID is the visibility it brings to a business. The technology delivers real-time ability to see what's in stock so that retailers can stop guessing and stop relying on unreliable inventory buffers.

According to Auburn University RFID Lab, a typical brick-and-mortar retailer that doesn't use RFID has a roughly 60% inventory accuracy rate. But RFID technology can boost that rate to as high as 99%.

2. Saving Money and Time Through Automation

210401 Whats Your Companys RFIQ - BLOG 2 - captionedImagine how challenging it is to manage inventory, exchanges, and returns when your numbers are always off by as much as 40%. For an industry that can struggle with profitability, accuracy is a vital component.

Having more accurate inventory figures improves the customer experience and can boost sales. Another study by the RFID Lab found that order accuracy increased 99% when RFID was used, leading to more efficient order fulfilling, fewer chargebacks, better forecasting, and increased labor savings.

RFID also allows businesses to automate the receiving process, reducing receiving time by as much as 90%. Receiving time and costs will fall significantly when you no longer have to scan every barcode or audit the contents of random cartons.

3. Improved Data Accuracy and Availability

Because RFID data is collected and uploaded electronically, businesses avoid issues with duplicate data, transcription errors, and missed items. When paired with a cloud-based system, there is greater availability so that everyone in the organization can view up-to-date information on the status of items.

4. Rapid Payback Time and Increased Revenues

RFID is a very cost-effective technology, and the enhanced revenue and cost savings achieved can quickly cover the initial outlay costs. The unparalleled transparency it provides means the operational data is easily and quickly collected for measurement.

5. Insights for Better Decision Making

Real-time data can be analyzed to give businesses insights to make more informed decisions. RFID is useful when it's time to make operational management or planning decisions that could improve your business in the short or long-term.

RFID systems offer benefits to businesses of all sizes, allowing them to reduce costs and improve efficiencies through automation. RFID can form the foundation of an effective asset management system and help a business deliver a better customer experience.

Want to learn more about adopting RFID technology? Download the RFID vs. Barcode comparison guide for more information.

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Topics: RFID, Planning, COVID-19

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