RFID and the Returns Epidemic

Speeding Up the Reverse Supply Chain
In order to address the returns epidemic and ensure that retailers keep profit margins as high as possible, they need to make sure the returns process is much more efficient. A growing number of retailers are beginning to adopt game-changing technologies, such as item-level RFID, in order to simplify this process.

The use of RFID in retail stores is best known for successful projects like Tesco F&F, where inventory accuracy is impacting inventory levels and out-of-stocks. However, it can also be used to effectively trace inventory through the reverse supply chain, helping companies to more effectively manage customer returns, reducing the amount of time employees spend manually processing returns, and enabling products to get back in store at a much faster rate.

Already, a number of large retailers are looking at using RFID solutions to streamline their reverse supply chain processes and operations at their stores and distribution centers. RFID tags allow items to be read in bulk and be accepted into a processing queue, and to provide the ability to prioritize items to process and speed up the movements of those items back into a sellable status.

An Industry Working Together
With the evolution of technology and rise in online shopping, the apparel retail sector has seen a huge surge in growth and significant opportunities presented. For example, online-only fashion retailers such ASOS and Boohoo have both reported significant profits, at £1.75 billion ($2.3 billion) and £265 million ($352 million), respectively.

However, this growth may be hindered due to these companies' free return policies, and they could see these profits hit by the amount of stock becoming held up in the reverse supply chain. With these opportunities also come challenges, and the returns epidemic is one that is swiftly becoming the most prominent.

Dean Frew is chief technology officer and senior VP of RFID solutions at SML Group. In this role, Dean leads SML's overall technology and go-to-market strategy for RFID, including tags, software and deployment. He is a frequent speaker featured at many national and international events focused on supply chain, asset management and RFID technology.