Digital transformation is the way forward – and RFID labels are one of the pivotal tools.
When it comes to optimisation opportunities, the retail trade is uniquely positioned. In contrast to other industrial sectors, technology and digital structures bring benefits to all stages of the value chain. Optimisation in manufacturing and logistics can be compared to other industries – yet the connection and the relationship to the customer goes far deeper.
This is the reason that concepts such as ‘shopping experience’ are closely associated with retail and not with mechanical engineering. RFID is a key technology for almost all processes in the retail trade. To date, however, less than 15 percent of all companies in the sector around the globe employ this technology.
In an interview with RFID & Wireless IoT Global, Jörg Bald, CEO of identytag, talks about the benefits of using RFID labels. He also explains why UHF/NFC hybrid label solutions will be an indispensable element of future omnichannel concepts.
Head of internal Sales Department
Bad Berleburg, Germany
The ROI can be calculated
For more than 100 years, identytag has been developing and producing label and tag solutions as a component for process optimisation in the retail sector – with and without RFID.
“We are closely following the development of the market and have been doing so for a long time,” says identytag CEO Jörg Bald. “Shopping habits have been changing steadily. Retailers must adjust accordingly so as not to fall behind ecommerce and omnichannel experts. One option is to possibly even pre-empt this development by employing RFID technology.
The benefits are obvious: more efficient logistics, a reduction in stock-taking time and enhanced transparency in the flow of goods. These are just a few of the benefits for retailers. However, the advantages for customers are seldom taken into account. So far, customers derive hardly any benefit from RFID integration. Taking a holistic approach to RFID use in the context of a digitisation strategy, a quick ROI with regard to various solutions is nearly always realisable.”
Eliminating the lack of data step by step
A holistic digitisation concept does not necessarily lead to radical restructuring. Rather, it is possible to realise supply chain benefits step by step. Jörg Bald: “The first step is the view from the top. This is to ensure investments in RFID solutions actually pay off. The next step is to examine processes in which, with relatively little effort, big effects can be achieved.” With improved data quality, initial applications form a basis for further development. “With every additional application, supply chain transparency becomes more detailed.
The more reliable the data quality, the more pronounced the benefit. Today, RFID technology is so mature that, with the right software and interfaces, there are no more information breaks. Gradual technology integration reduces initial investment costs and thus makes introduction much easier.”
Hybrid labels: essential for retail trade
identytag is currently manufacturing a major batch of UHF/ NFC hybrid labels for the first time. As Jörg Bald sees it, the future of retail trade depends on this technology, in which two frequencies share an IC: “The company, for whom we designed the labels with hybrid inlays, understood what digitisation means for their processes. They meticulously worked out the potential that this technology offers to supply chain processes and to the customer’s interaction with the product.”
Hybrid labels also form the basis for entirely new business models. IoT becomes accessible for the end user without investment in costly solutions that use two different technologies in parallel. “Considering the potential of hybrid label solutions and digital business models based on them, it is now clear that this technology is essential for future retailing.”
“To identify the opportunities for digitisation, retail trade has to look ahead. In doing so, a holistic evaluation when using RFID is indispensable. The benefits accrue not only in terms of logistics but, perhaps even more importantly, to the customer. Hybrid labels will play a key role here. In this holistic approach, returning value to your own company is a process that can pay off in a future-oriented digitisation strategy.” - Jörg Bald