Omnichannel Retail: the role of RFID in enabling digital transformation

The starting point for a customer-centric approach for a company is perfect knowledge and management of customer behaviors in omni-channel interactions. The precise control of each touchpoint is also the preliminary phase to the creation of customized and one-to-one interaction paths, based on consumer behavior and precise interactions with the brand.  

The concept of digitizing the experience can easily be applied to different types of interaction and levels. Think, for example, of the importance of monitoring devices and machinery made intelligent by the IoT within a production process. Thanks to technological components, such as RFID, now widely available at a reduced price, it is possible to follow a product throughout its life cycle and transform the devices themselves into touchpoints. 

So, in the same way as the customer journey, the enormous quantities of data generated make it possible to build a genuine product journey, which matches and complements customer interactions. When a specific and real customer journey meets and interacts with a product journey through information, the perfect balance between demand expectations and supply opportunities is achieved.

The ability to simultaneously control product and customer paths – particularly evident, for example, in Retail and Fashion – allows you to build an omni-channel experience, and Unified Commerce which improve both the customer experience and brand performance, through multiple integrated steps:

• Complete product tracking: its origins, its history, its source, its authenticity. 
• Real-time visibility of product inventory on any channel (omni-channel inventory visibility), optimizing and standardizing the shopping experience and eliminating the boundaries and barriers between channels, points of sale, and purchase models: the right product, in the right place, at the right time.
• Interaction extended to new forms through dialog between connected things and people, where physical products represent new digital devices (a dress with an IoT sensor or an RFID tag).
• Further enhancement of the relationship between seller and customer in the after-sales phase, with cross-selling and up-selling, thanks to full and immediate visibility of availability, variety, and associations between products.
• Innovation in new sales models which are transformed into service models, thanks to the connection characteristics of the products from which to detect use, consumption, possible malfunctions etc. and therefore opportunities for support and cross-selling.

Lutech sees the implementation of technological models of digital interaction between and with application systems, products and customers as natural, in both the manufacturing sector and in Fashion & Retail. 

RFID technology – now well-known and well-established – is rapidly becoming a prerequisite for omni-channel Retail & Fashion, to prevent stock running out thanks to a real-time and more accurate view of inventory, improve warehouse access – even local – and enable process automation. 

The simple use of an RFID tag and integrated application solutions can enable a true omni-channel culture by supplementing and enhancing the role of the sales outlet as a logistics and customer relations center.

RFID allows stock visibility accuracy to be maximized and provides knowledge of which products are sold at the precise moment of the transaction; the store assistant can therefore respond more quickly to and even anticipate customer requirements, even if the desired item is not in that specific store.

Applying RFID technology can solve typical problems for retailers, turning them into real and immediate benefits for consumers, for example:

• Omni-channel Fulfilment
  • Problem: The retailer needs to quickly locate and set aside an item following an order, regardless of the touchpoint from which the request arrives, and at any point of delivery, whether it is a physical store or a distribution center.
  • Benefit:  The customer receives the item faster and saves on shipping costs if they use in-store collection.
• BOPIS (Buy On Line Pickup In Store) 
  • Problem: The retailer wishes to process the order following an online request. Unified commerce allows this directly in the POS, its warehouse or other nearby stores.
  • Benefit: The customer has a wider choice of pickup locations, with less waiting time. The service becomes a distinguishing factor in the choice of retailer and brand.
• Management of returns
  • Problem: The retailer wishes to better manage returns, reduce processing times and return the goods to the supply chain more quickly. The information contained in the RFID tag speeds up and automates this process.
  • Benefit: The customer can immediately benefit from an automatic credit when returning to the store. This reduces return times and overcomes the frustration of returning a product.
• In-store ordering
  • The retailer wants to enable customer access to the entire digital catalog (endless aisle) to allow them to order directly in store via digital kiosk or tablets, or simply via mobile. 
  • Benefit: The customer can save time by ordering products related to the product purchased in the store (cross-selling), or those of a different color or size than that available in the store.

The introduction of RFID tags, together with sufficient integration between the applications that already make up the retailer’s IT architecture, makes the product smart and able to share its information throughout the infrastructure (product journey): when the tag is scanned at all connected platforms (from omni-channel order management to ERP etc.) key information is obtained to optimize the omni-channel supply chain, reducing the time and costs of stock inventory and human resources.

The buyers, for example, will be able to know immediately which products need to be restocked; marketing will receive notifications on what is selling well and what is staying on the shelf; and production will know what inventory is available for future orders and which new goods it should focus on (leaving aside the logics of collections in the fashion industry). All of the above is designed to support the decision-making process at different levels to achieve two primary objectives: production and supply chain optimization, and end customer satisfaction.

In Fashion Retail in particular, the level of maturity of RFID technology allows us to go beyond scanning the individual garment, accelerating inventory visibility and improving the management of shelf availability for complex SKUs.  “Remote” reading using advanced scanners, simply pointing them at the shelves or boxes, allows us both to identify the exact position of the item in real time, and to obtain cumulative data on sizes, number of pieces, colors and so on – all with a single scan. In this way, inventory and shelf management – a task that in large stores could occupy an entire sales team for several hours – takes two employees just half an hour with 99% guaranteed accuracy. 

A technology that meets the need to optimize the Fashion & Retail supply chain and significantly improves the customer’s shopping experience, which is increasingly seamless and omni-channel.

Lutech’s Retail and Fashion GBU is heavily involved in the digitization process for its customers, also and above all by promoting the development of the most innovative technologies in open and shared contexts, such as the Digital Innovation Observatory of the Polytechnic University of Milan, of which it is a sponsor for the 2019 edition, with the aim of guiding the big players in the market along the path of unified commerce.