RFID in 2022: What’s next for the retail industry? - Nedap (2024)

Team eCommerce Next orginally interviewed Tom Viewegeron March 18to get more insights on “RFID in 2022: What’s next for the retail industry?” Following is the orginal interview with Tom as published on eCommerce Next:

How will the fallout of COVID-19 affect the retail industry over the coming months?

The future is still uncertain, with customers remaining cautious (e.g., using mobile payments instead of cash) while craving social contact and interactions at the same time. However, online purchasing is here to stay and will continue to evolve following many successful shopper experiences, with omnichannel set to grow even more as it is expected that customers will continue to switch between channels quite flexibly.

How will the supply chain evolve to adapt to increased demand?

Retail supply chains need to keep up with new demands and have to become more agile to guarantee product availability to deliver the right amounts of items where and when they are needed. In a world where flexible omnichannel services dominate the retail landscape, transparent supply chains are required to avoid heavy overstocks or order cancellations. Creating a transparent supply chain will enable retailers to benefit from better forecasting and sell more with less stock.

Furthermore, supply chains have become more “fragile” in the face of unpredictable frictions, making visibility more important so that problems can be spotted early and reacted to quickly. It also allows retailers to become more flexible, so if they can’t deliver from a warehouse or can’t access stock due to supply chain disruptions, store stock can be utilized to still serve the customer.

Will a hybrid retail experience impact the RFID industry and if so how will the industry adapt to this?

RFID is on the rise in retail, and this will continue in 2022 and beyond. With the ongoing adoption of omnichannel services and the need for retailers to find new ways to enhance their store network (e.g., using them as mini DCs), stock accuracy and visibility are vital. Retailers must be able to present store stock online without overstocking and meet customer demand in all channels while safeguarding margins and minimizing waste.

Will physical retail change in 2022?

Physical retail is entering a new age, which is already underway due to changing consumer behavior. Stores have increasingly become a place where consumers spend their leisure time, find social interactions and experience the brand rather than just purchasing the products. This can also be told by the rise of new store concepts that focus on showcasing brand values and building communities instead of just selling merchandise.

The industry must also respond to workers and consumers becoming more digitally active, with brands already using standardised APIs and RFID systems to share data and connect with consumer and retail applications. Based on the RFID data, store staff can enhance the shopping experience as product availability increases.

As conscious consumerism rises, how will the RFID industry respond to this?

One of the megatrends that is set to rise in the industry is, of course, sustainability. Customers are more conscious of how they purchase and dispose of everyday items. To safeguard customer loyalty, retailers and brands have to adapt to this shift in behavior and make sure consumers can identify themselves with the brands they love while also educating themselves on where products come from (provenance) and how they make it through the supply chain (carbon footprint).

In this context, RFID helps create better visibility about the provenance, composition, and carbon footprint of products. Also, RFID labels themselves will become more committed to environmental values. Technological innovation allows printing RFID labels on recycled paper and without plastic layers and harmful chemicals. This also allows for high volumes and high-quality materials to be used while still being cost-neutral.

What new technologies/trends are on the rise for 2022?

In 2022, many technologies will improve and get higher maturity rates, and real-time data will become more important as the sheer volume of data makes it more complex to interpret them into actionable insights. Retailers will continue to make use of AI & machine learning, with a definite trend being the connecting of data and technologies (in the best case via APIs) to leverage new use cases. This is also a response to workers and consumers becoming more digitally active, with brands already using standardized APIs and RFID systems to share data and connect with consumer and retail applications. For example, store staff can enhance the shopping experience as product availability increases based on the RFID data.

Digital transformation will be the number one topic for the next few years and will be driven by the demand for effectiveness and efficiency that comes from a best-of-breed approach. APIs, different tools, applications, and services are pluggable, scalable, replaceable, and can be continuously improved through agile development to meet evolving business requirements.

Automation is also an evolution. While we see RFID handhelds as the “swiss knife” for retailers, there is now the option to cover multiple roles and look to automate processes. This can include the likes of transition reading or real-time locating. Still, such solutions are never “one-size-fits-all,” as it is necessary to find the right technology setup for specific environments and processes. Furthermore, different technologies will get connected with each other. For example, security tags will likely include RFID and NFC so they can be used for customer interaction via mobile devices.

Conversely, what will be the biggest opportunities/advantages?

It is important to recognize the upcoming challenges the industry will face alongside its innovations, including increasing wages and a shortage of skilled workers, which will continue to rise in 2022. In this context, RFID helps to provide more automation, better data, and smart tools to improve labor efficiency. Additionally, the speed of implementation will also play a big part. Retailers are eager to solve their stock inaccuracy problems by deploying RFID, however, it’s become a battle for resources for retailers who are also undergoing digitization projects. To overcome this, it’s important to orchestrate different initiatives (RFID, OMS, mobile payment, digital touchpoints, mobile apps) in parallel.

At the same time, the industry can break up the silos that still take place in many retail organizations who use different systems in each department. Now is the chance to create a single point of truth for the stock, and RFID will play an important role in this. When integrated, the technology allows movement from a keyhole view to a unified view with an end-to-end approach.

Cyber security should also not be forgotten as we embrace new technologies, with greater awareness and reports about various attacks. However, this is just the start, as retailers become more aware of security threats and their consequences so that appropriate countermeasures can be taken to prevent any breaches that could hinder advancements in the new year and beyond.

These advancements in the retail sector prove that as technological advancements evolve, it is key that organizations maintain their relationships with their customers and progress with their needs in mind. It will be fascinating to witness the acceleration of the retail sector trends in 2022 and observe how the industry continues to develop in the face of such large-scale transformations.