In its basic role in retail, using tiny passive or active tags attached to each item of stock, RFID enables retailers to achieve a real-time picture of their entire inventory. The tags are read by hand-held devices, which are themselves shrinking and becoming more user-friendly.
This revolution in stock visibility is being yoked to advanced omni-channel software, allowing retailers a new level of control and responsiveness, consistently fulfilling customer requirements, whether online, in a store or through a mobile device. This is already a huge leap forward, but RFID is also opening the door to another disruption – the development of the unmanned store.
RFID and the unmanned store
The trend towards unmanned stores is becoming an established phenomenon in the busiest urban areas of China, where it is facilitated by a combination of RFID technology, cameras and the payment app giants such as Alipay and WeChat Pay.
Theft has always been a big stumbling block to implementation of the staff-less store, but together these technologies look like they can overcome most of the concerns, at least in the context of quick-service and convenience retail where individual items are not of high value. Customers’ faces can be scanned at the entrance, having already been linked to their smartphone payment app.
When they leave, the system will automatically recognise the shoppers through facial recognition technology and their items through the RFID technology. Once payment via the app is confirmed, the door opens for the customer to leave – making the check-out process a matter of seconds.
These advances make it inevitable that experiments with unmanned stores will continue in the US and Europe. Amazon Go, after all has been a retail phenomenon for some time now. In the near-future shoppers who do not want to queue for convenience items such as drinks or snacks will be able to scan and pay using an app, which may well be that of the retailer.
More forward-looking retailers such as Coop Denmark, for instance, are already using their own app to allow customers the freedom to scan products with their smartphone and use the app for payment.
Customers who have the app receive a wealth of personalised suggestions and recipe ideas, which give the retailer a major opportunity to extend its engagement while keeping recommendations relevant and timely. It can only do this because it has invested in the solutions to pull it all together so that shoppers are individually recognised, can see their loyalty points immediately and use them as they wish.
What has changed is that the low price of RFID tags is making it cost-effective to attach them to relatively low-priced goods, at the same time that hand-held RFID readers carried by staff are being replaced by longer-range fixed-point scanners monitoring each stock item in the entire premises. As RFID tags become printed into packaging by manufacturers we can expect to see the move towards unmanned convenience stores accelerate.
This is where retail is adapting to a significant change in customer behaviour. Brands are realising that the trend for customers to use their own devices is here to stay and far from being a headache, presents a massively expanded opportunity for greater efficiency and engagement.
Farewell to the till
Whether unmanned stores take off outside high-footfall urban areas remains to be seen. But it is likely that tills will be redundant in a great many stores and hospitality outlets within three or four years. Customers who come in to browse and buy will use their own devices to scan products, download information about them and then, because they will pay through their phone app, avoid the hassles of queuing, fiddling around for payment and loyalty cards. They will not need a till.
Self-scanning in supermarkets is already well-established here in the UK, using either barcodes or QR codes with a scanning device. In future the customer’s own smartphone is likely to replace the scanning device and to become the means of payment, as in the Chinese stores without cashiers.
Retailers who put the right software solutions in place will be able to reap the rewards, amassing and analysing data from self-scanning apps which they can use for far more meaningful interactions with individual customers across every point of contact. Customers will find that they are fully recognised whichever channel they use and that offers and loyalty rewards follow them and are up-to-date and available. Consumers using self-scanning in supermarkets are already receiving product information and offers as they go round, based on their preferences. This is only the beginning and handled correctly, will strengthen the bonds between brand and consumers, rather than becoming an intrusive source of irritation.
RFID is certainly not the only technology that is transforming retail, but it is going to be a very significant one. Yet as with all customer-facing developments, unless it is backed up by background solutions that can pull all interactions together and make meaningful use of them, its full potential will never be fully realised.
By Steve Thomas, CTO, Omnico