Avery Dennison RFID Blog

Are you ready for the
connected products age?

With the holidays and NRF behind us, companies can go back to puzzling over an aspect of business that, despite consuming billions of dollars and inestimable amounts of time, too often comes down to a rough estimate or an outright guess—improving inventory management.

As they do, more of them are considering intelligent labels, including RFID-enabled tags that give every item a unique digital identifier. RFID labels can dramatically increase accuracy, save time and money, boost sales, and reduce waste. Companies adopting them are paving the way for “the RFID decade”—the coming ten years in which use of RFID-enabled labels will become commonplace. As the connective tissue in the Internet of everyday Things, RFID tags and other intelligent labels will help make inventories more visible, consumers more informed, and businesses more sustainable.

Inventory management is where retailers can capture compelling ROI right now. Intelligent labels let brands and retailers see exactly what they have in stock, and where it is, with unprecedented speed and precision. This gives them greater ability to meet customer expectations, and can help drive higher sales.

Apparel and footwear companies have been some of the first to realize these benefits. According to Auburn University, RFID identification has improved inventory accuracy for some companies in that segment from 65 percent to greater than 98 percent and higher, with sales increases of between 1.5 and 10 percent. This is a particular advantage in the omni-channel environment, where success requires inventory accuracy of greater than 98 percent, but which, without RFID tracking, which often lie below 70 percent at the assortment level.

“The efficiencies, cost-savings and improved consumer experiences that intelligent labels enable make their wide-scale adoption a matter of when, not if. Forward-thinking companies can explore RFID-enabled solutions now, and prepare for the coming decade, when transformations in how we all connect with products and consumers will evolve quickly, along with the expectations of consumers themselves."

Francisco Melo, Vice President and General Manager of Global RFID and Avery Dennison

Other segments will follow apparel’s lead. Beauty brand owners and retailers, for example, will particularly benefit from increased visibility into high SKU and inventory levels. They’ll cut time and labor costs by replacing manual scanning of every item with a single worker equipped with an RFID reader that can count tens of thousands of items in under an hour.

Grocery retailers and food service distributors will gain greater visibility into the expiration dates of perishables with RFID, allowing them to sell items nearing their expiration dates sooner, more quickly identify recalled products and ensure customer safety throughout the food supply chain. By equipping employees with RFID readers that scan hundreds of items per second, companies can eliminate manual checking of sell-by dates and reduce labor costs by up to 50 percent

Intelligent labels will also advance sustainability. In the food segment, for example, the technology will allow producers and retailers to avoid spoilage and waste. Across segments, they’ll connect to consumers’ mobile phones to provide information on a product’s origins and on how the item can be cared for and eventually recycled.

Ultimately, as smartphones develop, and as intelligent-label reading devices become standard in appliances and closets, intelligent labels will move into consumers’ homes, making it easy to re-order products, get recycling information, and more. Individuals will be able to opt into programs allowing companies to gather more detailed data on their behavior and preferences, allowing more personalized and meaningful one-on-one experiences.

The efficiencies, cost-savings and improved consumer experiences that intelligent labels enable make their wide-scale adoption a matter of when, not if. Forward-thinking companies can explore RFID-enabled solutions now, and prepare for the coming decade, when transformations in how we all connect with products and consumers will evolve quickly, along with the expectations of consumers themselves.

 

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