As part of our series on how retail automation will change the industry, we examine radio frequency identification (RFID) technology.
New Zealand retailers have been slow to adopt RFID (radio frequency identification) technology but that could all change with Google NZ’s plan to launch Local Inventory Ads (LIA).RFID also has the potential to offer Amazon Go-style frictionless purchasing, while RFID tags can be used by smart fridges.
RFID tags contain small microchips and a transmitter. This means its information can be read more quickly and it can also be updated. RFID tags can also communicate with other devices.
RFID can be used for stock and inventory management, supply chain logistics, manufacturing process optimisation, point of sale operations and merchandising or marketing.
The technology also means that retailers can count or track any item bearing an RFID chip by walking past a display or pallet with a scanner, rather than having to scan each barcode or manually count the items.
RFID experienced some teething problems when it was first used in the early 2000s overseas. Radio frequencies don’t pass through liquids and metal well, and read rates were not always reliable.
Since then, however, the technology has become much more effective and is also vastly cheaper, by as much as 80 to 90 per cent, says Gary Hartley, GS1 New Zealand general manager, customers and secretary of the New Zealand RFID Pathfinder Group.
In contrast to barcodes, RFID offers the ability to identify each distinct item, not just a product, and know where it is, at any given time, in the supply chain. The technology is used extensively in the US and Europe, particularly by apparel and footwear retailers, he says.
Locally, livestock and kiwifruit have been some of the bigger local industries to adopt RFID yet few New Zealand retailers are using it, he says.
However in April Google NZ retail lead Celeste McCormick told delegates at the GS1 ‘eCommerce Innovation Summit’ in Auckland that its new LIA service will use RFID to provide real-time information about retailers’ inventory, also known as actionable supply chain visibility.
When someone searches Google for a particular product, it will tell them there’s X amount of stores in their close vicinity that actually have this, and here’s how much inventory each one of those stores have, says Hartley.
“That’s quite powerful when you think about it. The consumer is even more in control, and as long as they have enough product on their shelves, it’s gold for the retailer. Suddenly the online channel becomes a crucial part of the marketing mix.”
This story originally appeared in NZ Retail issue 762 June/July 2019.