New solution addresses the industry’s $18.4 billion in annual losses due to returns fraud
ID Scanning is improving the way retailers do business.
If retailers across the country have a Super Bowl, it is called the Big Show, which this year took place in January in New York City. The big winnger of the big show, according to industry experts, is the role of Radio Frequency Identification (RFID) technology. This innovative strategy for improving customer experience, increasing data and reducing loss is growing in popularity and has the potential of returning big dividends for brick and mortar stores, competing with a growing shift to online shopping.
According to Bill Hargrace, founder of the RFID Research Center at the University of Arkansas, RFID is the next big thing for top retailers. Half of the top 100 U.S. retailers are using RFID. RFID refers to the small chip that eliminates manul data entry or barcode scanning. It does not need to be scanned directly. For example, a bag of items at check-out can be priced without separating them. Though the technology has been available for decades, it has only recently become affordable and reliable enough to warrant the investment. Gillette recently bought 500 million devices for its products at the cost of ten cents per tag, according to published reports. In addition ot the obvious security and scanning benefits (the chips can act as a mini alarm), RFID technology has been employed in creative ways by major retailers. RFID chips embedded in clothes allows customers to look into a mirror/screen that shows them how the clothes would look on a modeling catwalk, and other audio-visual content related to the item, according to a trade report.
The increased cost per tag appears to be outweighed by long-term benefits, though according to one study on the return on investment of RFID, the gains can be difficult to track. “(ROI) is not always easy to determine since you may have returns that are not necssarily a matter of financial profit,” the study’s author states. “Some RFID projects nay not yield significant cost reduction nor increase in revenue-at least not right away. However, they may provide significant benefits like increase in customer satisfaction or risk reduction.” Time will tell whether the ROI is worth it, but in the meantime, it will be stimulating to experience this newly incorporated technology first hand.
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