Jan 25, 2016Last week, I attended the National Retail Federation's Big Show. I've been attending the event annually for roughly the past 15 years, to gain a sense of how retailers view radio frequency identification technology. This year, there was a noticeable uptick in interest. In 2014, attendees filled a room with approximately 200 seats to hear a panel discussion about RFID in retail, sponsored by Avery Dennison. At this year's conference, Avery sponsored a similar seminar held in the same room, and I'd estimate there were close to 300 people in attendance. They were lined up two deep on both sides of the room, and some were sitting on the floor.
As in years past, a number of RFID companies exhibited solutions, including Avery Dennison, Checkpoint Systems, Impinj, Smartrac, Tyco Retail Solutions, Zebra Technologies and, new this year, Boing Tech, a Chinese supplier of tags for retail. There was a steady stream of visitors to these booths, and overall, it seemed they were a little more knowledgeable about RFID.
But in the grand scheme of things, those showing interest in RFID were a tiny fraction of the 34,000 people attending the event. Given the recent spate of stories in the business and general media about how major retailers are benefiting from RFID, I thought the sessions would have 10 times that attendance, and that booths run by RFID solution providers would have been overwhelmed with retailers clamoring to know how they can get their inventory accuracy up to 95 percent or better, improve store execution and increase sales. That, sadly, was not the case.
Here's the great irony of the Big Show—perhaps 75 percent of the technology being exhibited cannot deliver value if a retailer is not RFID-tagging all items. As in the past few years, many vendors were pushing data-analytics solutions. But retailers' inventory data is only 65 percent accurate. There's not much value to analyzing bad data.
The two other big themes this year were analyzing customer behavior in-store (the way online retailers capture information about customers' interests) and engaging customers in new, innovative and fun ways. But here, again, a retailer would need RFID to be successful. One partner at Microsoft's booth was showing an infrared-based system that identified which specific shoe a shopper picks up from a shoe rack, based on that shoe's distance from the sensor. When a customer picks up the shoe on, say, shelf number eight, the system plays a video about the footwear and records that person's interest for later analysis.
That system might work at an exhibit booth, but consider what would likely happen at a retail store: A customer might pick up a shoe on shelf eight and another from shelf 10, and then put them back in the wrong place. The system would have no way of knowing that had happened if the shoes were not identified via RFID. As a result, the next customer who picked up the shoe on shelf 10 would see the video for the shoe that was supposed to be there, not the one she was actually holding, and the system would record her interest in the wrong shoe, causing the retailer to analyze bad data.
One partner at Hewlett-Packard's booth featured an interactive kiosk that did use RFID to identify a shoe placed on it by an interested customer. The interactive display showed information about that shoe and allowed the customer to select different colors and sizes, as you would on a website. She could then buy the shoe right there at the kiosk. But let's consider how customer-engagement systems work in retail stores: A customer selects an item to buy and is told that it is not in stock (because the retailer doesn't use RFID at the item level to manage inventory, and thus does not have a good idea of what is in stock). The retailer has spent a lot of money to engage a customer that it then disappoints.
The RFID companies, of course, showed off solutions that did assume businesses were using RFID at the item level to achieve highly accurate inventory data. Unfortunately, too many retailers still don't understand that they need to solve their inventory accuracy problems before they can move on to data analytics and customer engagement.
Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog, the Editor's Note archive or RFID Connect.