LP Magazine

MAR-APR 2018

LP magazine publishes articles for loss prevention, asset protection, and retail professionals covering shrinkage, investigations, shoplifting, internal theft, fraud, technology, best practices, and career development.

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RFID AND RETAILING 40 MARCH–APRIL 2018 | LOSSPREVENTIONMEDIA.COM S ince the term radio frequency identification (RFID) came into common usage within the retail environment, around the end of the 1990s, it has in many respects been an idea driven more by hope and hype than practical realization. For retailers it promised a world where supply chains would become fully transparent, with all products identifiable in real time, bringing an end to oversupply and out-of-stocks—the ultimate optimization tool, allowing retailers to truly deliver "just in time" supply chains tailored precisely to the needs of their customers. In addition, RFID offered other "game changing" benefits such as the end of traditional checkouts and associated queuing for the consumer—products would automatically "checkout" as they left the store with the consumer's credit card being billed accordingly. (Sound familiar?) Within the realm of loss prevention, the RFID "revolution" offered much promise, with shop theft becoming a thing of the past as thieves would be automatically identified as they tried to leave the store without paying. Similarly, problems such as returns fraud would be eliminated as the previous ambiguity around whether a particular item had actually been purchased would no longer exist—the product would "tell" the retailer its current status (bought or not bought). Back in the early 2000s it seemed RFID was going to totally transform the retail world—indeed, it was described by one of its earliest advocates in the following glowing terms: "as significant a technology as certainly the Internet and possibly the invention of the computer itself." If we skip forward seventeen years, then it becomes very quickly apparent that RFID, as yet, cannot be remotely put in the same category as the Internet in terms of its impact upon the world or more specifically retailing. Arguably, it is a technology that has seriously struggled to match up to the hype heaped upon it at the end of the 1990s and into the early 2000s. It continually floundered on the rocks of physics and economics, with the "Faraday Cage" in many respects proving to be the prison "cell" from which RFID has struggled to escape. As such, many of those long in the tooth in retailing have become familiar with the sentence that starts, "In the next five years RFID will…." However, the outlook now appears to be changing fast for RFID, and what has been seen in the past few years is a much more enlightened, less evangelistic, and more realistic approach to how RFID may be able to play a role within retailing, one that recognizes its limitations and plays to its identifiable strengths. The technology has also had the opportunity to gradually mature, away from the spotlight of unrealistic expectations, and begin to show how it can be used to help retailers resolve some of their ongoing and growing concerns. This can be seen particularly in parts of retailing that do not have a concentration of products largely made up of metals and viscous fluids, which have traditionally proved highly challenging for RFID to cope with. Retailers focused on apparel and footwear in particular have begun to use this technology to help them manage their supply chains more efficiently, utilising RFID's capacity to bring transparency and ease of audit into the retail space. As pressures within retailing concerning competition and growing consumer demands for greater and more accurate availability have increased (particularly with the growth of omni-channel), then some companies have begun to invest in RFID to help them respond. While we are still some way from RFID becoming "bigger than the Internet," it would seem that a more gradual and incremental introduction into retailing is underway, one that recognizes its weaknesses but at the same time is beginning to take The outlook now appears to be changing fast for RFID, and what has been seen in the past few years is a much more enlightened, less evangelistic, and more realistic approach to how RFID may be able to play a role within retailing. SALES INCREASED €1.4 billion €5.2 billion 1.5% 5% Size 32 (01)95012345678903(21)00123

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