RFID Delivers Targeted Content to Shoppers

Published: April 1, 2024

Optimum Retailing’s RFID solution connects product movement with digital content to provide trends-based intelligence

To better understand how their products are performing in stores, several specialty retailers are in the process of launching a new RFID-based system to manage their displays.

The solution from Optimum Retailing brings intelligence to retailers and brands about how products are being viewed, as well as providing shoppers with access to content about those products.

The retailers will be using the technology to track what product is on display, how customers are interacting with it, and gain intelligence about the trends.

The recently released solution provides a way for retailers to extend the use of RFID tags that may already be attached to item level products. Optimum is planning to offer the software platform with AI in the third quarter of this year as well, said Sam Vise, the technology company’s CEO.

RFID Journal Live

Providing the Right Signage and Content

Vise, who founded the company, brought a 25-year retail background to the company along with an interest in solving some of the more intractable challenges for stores and product brands.

“One of the things I had focused on in my career was how we could support retailers in making sure they had the correct marketing up, at the correct time,” Vise recalled.

That marketing could consist of visual graphics or digital signage. The challenge was making sure stores were putting the content and products in front of customers, when and where they were needed most.

Vise posed some basic questions that are important to retailers: “How do we look at differences, say, between New York City and New York State, in terms of advertising and promotions? How do we factor in things like seasonality?”

In the latter case, a product that sells well in February in Florida might perform better in Chicago months later.

Working with Retailers

Vise considered how retailers could localize the communication and eventually get to the point of localizing products. That led to the Optimum Retailing software platform, which initially was a non-RFID solution that leveraged optics instead.

Stores could capture data about displays in their locations with their smart phones and forward to the cloud-based software to be analyzed. Currently, about 30,000 stores globally are using the image recognition system.

Optimum Retailing took the approach of looking at ways to enable data to be captured without requiring the use of the phone.

“This is where RFID came in for us,” said Vise.

Tracking Customer Interaction

With the solution, Optimum Retailing installs RFID antennas within a store at key product displays. Tags are then applied to products displayed there, or they may already be attached to all items that are placed in shelf or rack areas.

As the RFID tags are read, the unique ID number encoded on the tag is captured by the antenna and sent to Optimum Retailing software in the cloud. The software then monitors activity in the store by identifying if a tagged item is picked up or moved, based on the antenna detecting a change in the tag being read.

In that way, the technology creates a planogram and detect when there is a change that takes place at the fixture which may ultimately require adjustment to the planogram. For instance, the system may determine that some products are commonly picked up, or are not being picked up at all, while others may not be purchased after they’re looked at.

For brands, the data helps them ensure that stores are compliant with displaying agreements for those products where they can be accessed by customers.

“Retailers and brands know that if a shopper walks into the store and they don’t see the product that they were looking for then they’re just going to walk out [which means a] lost opportunity in sales,” Vise pointed out.

AI on the Horizon

Beginning this fall, the company intends to provide AI to automatically examine the availability of products on shelves and cross reference that information with transactions.

“(This gives) real time recommendations based on modeling,” according to Vise, such as suggestions that a product performs better on one shelf than another. “That will enable retailers and brands to accomplish predictive modeling.”

They may receive notification, for instance, that a blue sweater will perform better in a different location in the store, based on behavior data coming from other stores or at other times. As the AI system collects more data, “they can build the model in terms of what is best practices.”

Hardware Agnostic for RFID Tags, Readers

Optimum Retailing has hardware partners for the RFID technology, including Avery Dennison for UHF RFID tags, and can recommend readers and antennas according to a customer’s needs. In some cases, brands or retailers are opting to use handheld readers as it requires less installation cost.

Companies can integrate their inventory software with Optimum’s software as well, cross referencing details between what’s available in the inventory and what’s on display in the store front.

If a store doesn’t have that inventory in the backroom, and it’s not available on the display fixture, the software can advise the store of an alternate SKU that could be used in the display area.

Piloting Technology for Visibility

An electronics retailer that is piloting the solution can identify what tagged products are on display and ensure that they are properly located on the display.

The system enables shoppers to gain a digital experience as well. When a specific product is picked up, the system identifies that it is being looked at and displays relevant content about it on a screen.

“In the meantime, store management can see now that the product has been moved,” Vise said.

Tracking Cosmetics in the Store

As for a retailer selling cosmetics using the technology, it is helping them understand if products are properly displayed or if they’ve been moved to the wrong location.

“We can see that these two products are in the wrong spot,” said Vise—the software can then alert retailers or brands that an item has been moved and is no longer displayed in the right location.

The cosmetics retailer plans to roll the technology out in Q2 of this year. With the solution, shopper behavior and product performance can be tracked in real time as well as historically.

The return on investment (ROI) is initially centered around ensuring better on-shelf compliance. That means shoppers will find goods easily and buy them.

Ensuring Shopper Privacy with RFID

By using RFID on a product, rather than relying on optics, stores can ensure that they protect the privacy of their shoppers, Vise pointed out. One of the benefits of RFID over other technology solutions— tracking behavior in stores—is privacy due to tracking objects rather than people.

“To track people’s movement to see what products they pick up: that can step on a lot of privacy issues. RFID is blind,” he said. RFID only follows the ID number encoded on a product’s tag. In that way, stores can view shopper behavior without an eye on the shoppers themselves.

“You can gain a lot of information without infringing on anybody’s personal privacy,” he said.

The inventory and supply chain visibility benefits of RFID make the technology that much more valuable to those in the retail industry, especially with the introduction of AI into the software platform later this year.

“With RFID we can capture the movement of a product through the supply chain, we can look at it on display, we can track shrinkage to see if that impacts sales, and then you combine that all together,” Vise said.

Key Takeaways:

  • Optimum Retailing has released an RFID enabled version of its solution to track retail displays linking product movement to content as well as collecting intelligence over time.
  • The first to test the technology  are retailers of electronics and cosmetics.