RFID vs NFC
Wireless technologies are transforming the way in which retailers and brand owners interact with the consumer. RFID has been one of the most widely adopted security features used by retailers over the last few decades but with the increasing computing power held by almost every potential customer on their mobile devices, near field communications (NFC) are to become the next viral trend within the retail environment. This issue of the iDi Pac article aims to paint a picture of the differences between the two technologies and how they are changing the supply chain and consumer shopping experience.
The differences between the two technologies guides retailers as to how each technology should/could be used within the supply chain. For example the very close proximity communication range of NFC makes it ideal for secure operations, limiting the opportunity for the communication to be infiltrated. This is why the London underground uses NFC for its Oyster Card system and other contactless card payment systems. However, NFC would be of little use to a large warehouse owner who would like to quickly update their stock system, which is where RFID is considered the most appropriate technology as it allows for multiple communications within a large proximity range.
RFID for next generation supply chains. A good example of RFID implementation has been the proven success of the clothing stock control system within Marks and Spencer (M&S) stores.
In 2003 M&S employed RFID technology to manage their clothing department with the goal to be “the store in which you can always find your size”. During 2014 it was suggested that M&S used over 4 million RFID tags to optimise stock levels to assist making their goal a reality. However, this is just the initial stage of the plan, the long term goal for M&S is to utilise various size and shapes of EPC Gen 2 tags to extend RFID coverage across all products (including ones that contain metal) in the non-food classification.
Kim Phillips, M&S’ head of packaging said that other than visibility on inventory, optimized stock levels and ensuring the correct range of products is on the shelf, the other motivating factor to tag all merchandise was the recognition that the company is “operating in an omni-channel world that transcends traditional marketing boundaries. The use of RFID technology to replace manual methods of stock counting and stock checking is just another step in the ongoing digital revolution”.
M&S are also leading the market with making the consumer experience more interactive by installing “browse and order” hubs with giant touchscreens. By increasing the number of ‘channels’ their customers use, the more they spend. M&S says shoppers who shop on its website as well in its stores spend four times as much; and smartphone users increase this level up to eight times as much. This is just the tip of the iceberg, using RFID technology to increase the interaction between customers and the product they are buying.
The success of M&S using RFID technology to track product is just the beginning – once the cost of the tag has been absorbed by the company, the possibilities for the technology can be broadened further to cover areas such as; Store security, Logistics, Staffing & Check-out experience.
It is common for retailers to use Electronic article security (EAS) tags to alert store attendants of attempted theft, but with RFID technology, useful information can be obtained and analysed when addressing loss prevention eg. the information provided to retailers can be much greater than just a ‘tally’ of items stolen. RFID technology can help build knowledge of the store locations, items prone to theft, what time of day they were stolen and which exit. Retailers can then ensure that security systems are installed in the areas lacking in security.
RFID can also be used to assist inventory systems by helping to differentiate between store shrinkage and other forms of inventory distortion thus allowing for the correct items to be replenished immediately.
With RFID technology a retailer no longer needs to check incoming goods manually. Warehouse staff only need to stand near the pallet/roll-cage and a list of items contained within the unit could be uploaded to the inventory database. Tighter control of incoming goods is also a strong preventative measure against stock pilferage by staff.
Additionally where is stock when it is not on the shelf – is it being held in the store room or is it in transit?
End of year stock takes can be completed within a matter of minutes by a single member of staff; lower overheads for the completion of this laborious activity, free up staff to perform customer facing activities.
Checkouts become tills of the future where there will be no more loading products onto the conveyor. Just wheel your trolley/basket straight through, and the system will total up the goods. If somebody was trying to steal some expensive items on their person but pay for cheaper items through the till, the fraudster would be outed as the RFID technology means that all items within that proximity will be scanned.
Re-scans will be a thing of the past too – As there is no direct line of sight (which is required for barcodes), reduced items would no longer need an additional sticker (usually a lower quality barcode more difficult to be read by traditional readers) as the store staff are able to alter the price of the label already attached.
What could near field communication possibly bring to the table?
Although NFC is just starting to become the ‘norm’ for in-store transactions, it brings to the table more futuristic ideas to the retail environment. Interactive kiosks or smartphones with NFC communication could allow customers to view clothing on a living model or identify accessories that go along with an outfit they have in their basket. NFC-enabled fitting rooms where you can visualise yourself in the clothing (opposed to physically trying it on) are currently being developed and are expected to grow in popularity as interest grows in electronic consumer engagement tools.
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