Security

NRF 2024: RFID Is Helping Retailers Digitize the Store Environment and Track Losses

Radio-frequency ID has come a long way since the early 2000s. Now it’s helping IT leaders mine data in store environments and run forensic investigations on theft.

Lily Lopate

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Lily is a Senior Editor at BizTech Magazine. She follows tech trends and the IT leaders who shape them — reporting on entrepreneurial business, security and thought leadership.

There’s a dirty little secret in retail: Everyone has a theft problem — and there’s no easy fix. But pairing radio-frequency ID with artificial intelligence, video analytics, computer vision and the Internet of Things can help.

“It’s really hard to figure out what’s missing in a stack of black jeans and so RFID gives us the insight to say we know what’s been pulled from our floor” says Kirsten L'Orange, vice president of global direct-to-consumer omnichannel productivity at Levi Strauss. She explained how RFID is enabling Levi’s to “data mine the physical store,” which has been a huge boon to business.

Experts at NRF 2024: Retail’s Big Show, hosted at the Jacob K. Javits Center in New York City, say retailers are leveraging the power of RFID to digitize their products, mitigate theft and improve revenue in an omnichannel marketplace.

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From serialized data and “passports for products” to smart shelves and smart stores, here are a few ways RFID is helping retailers fight shrinkage:

RFID Creates a Serialized Data Archive of All Products

RFID technology empowers retailers to create a serialized data archive of products in-store, online and at every step of the supply chain. RFID assigns unique identification codes to each item, streamlining inventory tracking and enhancing accuracy. This allows retailers to efficiently manage stock levels, reduce errors and gain visibility into their supply chain.

“If you do not have RFID and serialized data on your products, you cannot compete,” says Bill Hardgrave, president of the University of Memphis. Experts at NRF 2024 agree it’s an essential technology that retailers need to reduce losses and succeed in omnichannel commerce, now and into the future.

Digitizing product tagging also cuts down on operational costs. “We have seen an 80 percent reduction in labor hours,” says L'Orange. “And then you can reallocate that labor to sales-related tasks,” which means higher revenue overall.

Use RFID as a Forensic Tool to Investigate Crimes

Retailers are using RFID’s real-time data as a forensic tool to investigate crimes and identify security vulnerabilities, letting retailers “collect much better evidence to fight shrink,” says Read Hayes, director of the Loss Prevention Retail Council.

With recorded time stamps, geolocation tagging and status updates of products throughout the supply chain, RFID essentially gives retailers “passports for products,” says L'Orange. This lets retailers track when a product left a shelf, left a building or crossed state lines.

“We had people working for us for many years who were stealing from us,” says Joe Coll, vice president of asset protection operations and strategy at Macy’s, recalling a discovery made from data insights post-investigation. Especially with repeat offenders, RFID offers a retrospective map of product inventory.

WATCH: Amazon’s Justin Honaman shares RFID's rich history at NRF 2024.

Combine RFID with Computer Vision for Smart-Shelf Tracking

Retailers are also layering RFID with computer vision in smart shelves to get more visibility into their store environments. These smart shelves monitor product movements and sense theft as it happens.

“When you start to combine technologies, you’re getting video time stamps of every individual that took a product off a shelf without paying for it,” says Coll.

Experts at NRF 2024 say this solves several retail loss problems at once. It helps retailers identify the product that’s being stolen, what time the incident occurred, who the offender (consumer or employee) is and the route that product took in store.

RFID can also send signals when it’s time to replenish stock on the showroom floor, as Shirley Gao, chief digital and information officer at Pacific Sunwear (better known as PacSun), explains. This helps retailers discover if there’s an imbalance between foot traffic and inventory.

$23.8 billion

The estimated global market size for RFID by 2030

Source: Verified Market Research, RFID Market Size and Forecast, May 2023

Layer RFID with AI and IoT Sensors for “Just Walk Out” Tech

It may seem counterintuitive but Amazon Web Services’ Just Walk Out technology is actually reducing theft in stores. As Jon Jenkins, vice president of Just Walk Out Technology at AWS explains, the reduction of shrink is one benefit of a seamless checkout “because in a Just Walk Out store, the action that would have been a theft becomes a purchase."

Consumers can enter the store with their card or hover their palm over an Amazon One device, shop the store and grab all they need from the shelves and then leave without stopping at checkout.

UP NEXT: What is the difference between RFID and NFC?

“We’ve figured out how to make RFID work for the consumer,” says Jenkins. Once RFID is attached to any product, the retailer has the tracking information, and as the consumer walks out of the store, they pass by an IoT sensor gate. This records the product, time and purchase all at once. (It’s almost magic — but retailers are required to operationalize their data on the back end so that transactions are correct).

For Andy Szanger, director of strategic industries at CDW, these innovative solutions make for safer stores and frictionless shopping: “If retailers are working to create those moments that make a customer want to come to the store – RFID unlocks a lot of that.”

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