RFID Technology in Point of Purchase Displays

Technology has had a transformative impact on virtually every sector of our economy as well as our culture and society at large. Relative to many other industries, retail has been slow to adopt new technology. However, in today’s guest post written by freelance writer Nina McKee, that is starting to change and may ultimately impact the role and contribution of point of purchase displays.

                                                                             Courtesy of Pexels- Karolina Grabowska

RFID (Radio Frequency Identification) is revolutionizing retail. The cutting-edge technology, which uses radio waves to instantly identify and track tags attached to objects, has the “power to unlock up to 5% top-line growth from better stockout management and shrinkage reduction as well as to achieve a 10–15% reduction in inventory-related labor hours”, McKinsey & Company reveals. When it comes to point of purchase displays, RFID can play a key role in influencing purchasing decisions and driving sales.  

RFID technology and digital transformation 

71% of retailers believe digital transformation now plays a key role in retail technology, while 69% say the main reasons for embracing digital transformation are to improve efficiency and reduce costs (in addition to improved competitiveness (70%), stronger customer relationships (69%), and higher profits (67%)). Digital transformation – defined as implementing technology into business processes in order to improve efficiency, productivity, and customer service – is essential for business success. Retailers can particularly benefit from digital transformation with RFID technology to improve efficiency and customer experience. For instance, tagging items with RFID labels and using RFID readers at the point of sale can create a seamless check-out experience. This allows shoppers to scan all their items at the same time – there’s no need to scan everything individually. As a result, customers can enjoy a faster checkout experience free from user error.

RFID technology is quickly gaining adoption in the retail industry and is poised to transform the functionality and impact of point of purchase displays.

                                                                                  Courtesy of Pexels- Ivan Samkov

The rise of smart fitting rooms

RFID technology can play a key role in point of purchase displays in a variety of different ways. For instance, some retailers now have smart fitting rooms, featuring mirrors containing RFID tech. The mirrors recognize each item brought into the fitting room and can provide customers with tailored information about stock levels other colors and sizes available. Customers can also get tips on how to style clothing, as well as relevant item recommendations that can finish the look, therefore encouraging further sales. Chanel’s smart fitting rooms, for example, use RFID technology to “take the shopper on a digital journey of new styles, product details, and the Chanel lifestyle all without leaving the room”, McKinsey & Company notes. Customers can also request items without having to exit the fitting room. And, retailers, in turn, can use this technology to collect valuable customer data, such as, which items customers try on, conversion rates, and abandon rates filtered by product.

Additionally, H&M recently opened a new store in Williamsburg Brooklyn that showcases the latest in cutting-edge retail technology in order to enhance the shopping experience for customers. Specifically, the store features RFID technology that provides complete “visibility of the store’s inventory and size options in real time”, H&M explains. Mobile payments are also possible at anytime and anywhere in the store, thereby improving customer convenience and ease of purchase. Additionally, the fitting rooms will also be outfitted with smart mirrors that note the sizes and colors of items while providing customers with fashion recommendations. With data privacy a growing concern among customers and retailers alike, the mirrors are programmed to only gather product data.  

Co-op’s electronic shelf edge labels 

Over in the UK, Co-op recently announced they’re replacing paper labels with electronic shelf edge labels in all stores. As a result, the food retailer expects to generate savings of £220,000 ($283,690 USD) in paper and printing annually. In addition to eliminating paper usage, electronic shelf edge labels also improve accuracy and minimize the chance of human error. The shelf edge is a prime sales influencer, so accuracy is essential at this vital point of purchase. Electronic shelf edge labels can also improve the customer shopping experience thanks to barcode scanners and QR codes. For instance, electronic shelf edge labels can facilitate easy ordering via QR codes, display stock levels, and display product reviews. “It’s a big investment but it’s worth it as our stores will have increased efficiency, assured pricing and product information, reduced paper wastage and an enhanced store team morale,” Co-op retail transformation project lead Mark Barnett says. RFID technology is undoubtedly revolutionizing the retail landscape in general while promising to transform point of purchase displays in particular. By incorporating RFID technology into their operations, retailers can successfully improve customer experience, while also boosting sales, reducing stockouts, and improving profitability. 

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