By Tom Vieweger, RFID Business Expert at Nedap Retail
Supply chain disruptions, geopolitical tensions, an energy crisis and high inflation rates – who would have thought that 2022 would bring us a level of volatility we have not experienced in recent years. Many industries expected a ‘silver lining’ at the end of COVID-related restrictions and hoped for a ‘back to normal’. However, we have evolved from the ‘old normal’ into a phase of transformation that will continue to accelerate. So how have these things shaped 2022?
Have supply chains evolved?
This year, supply chains have been overshadowed by scarcity and disruption. Still, it remains a top priority for retailers to make merchandise available at a plethora of sales channels for customers. At the same time, consumers are becoming more and more curious and critical about where products come from and how their favorite brands treat workers and the environment. Therefore, implementing a more transparent and exposed supply chain through sophisticated data systems is partly because of consumers’ demand for sustainability awareness. With RFID, supply chain risks can be drastically reduced, making retailers more efficient, transparent, and in line with consumer expectations.
Furthermore, creating end-to-end supply chain visibility enables retailers to benefit from better forecasting and sell more with less stock. In a world where flexible omnichannel services dominate the retail landscape, transparent supply chains are required to avoid heavy overstocks and order cancellations. Stock visibility is a crucial driver to a retailer’s success yet remains a top challenge.
Did physical retail change in 2022?
Physical retail is in the middle of a massive transformation, mainly due to changing consumer behavior. The key to success for retailers is a sharp focus on the customer. Our view of in-person shopping has changed, with stores transforming into places where consumers enjoy going and ‘live the brand’. This has been evident in the rise of new store concepts focusing on showcasing brand values and building communities instead of just selling merchandise.
Convenient shopping is here to stay, with an increasing number of omnichannel services and seamless integration of sales channels still leading the way for 2023. Same-day delivery and influencer marketing have risen in popularity, so retailers must continue to maintain their digital presence as well as their bricks and mortar stores, which will be an integral part of the shopping experience in the new year.
Conscious consumerism has risen; how has the RFID industry responded?
Customers are much more conscious of how they purchase and dispose of everyday items. To safeguard customer loyalty, retailers and brands have been seen to adapt to this shift in behavior and make sure consumers can identify themselves with the brands they love while also educating themselves on where products come from (provenance) and how they make it through the supply chain (carbon footprint).
The increased public awareness around issues like this has increased interest in sustainability and green consumerism. Green consumerism, defined as consumers wanting to know more about a product and its sustainability impact to make more conscious buying decisions, has made fashion retailers need to lessen the environmental impact of their operations. According to McKinsey, 67% of consumers identified sustainability to limit climate change as important. 88% think that more attention should be paid to reducing pollution.
RFID is helping to create better visibility around a products’ provenance, composition, and carbon footprint. This includes RFID labels, which are committed to aligning with environmental values. Technological innovation allows printing RFID labels on recycled paper without plastic layers and harmful chemicals. This also allows for high volumes and high-quality materials to be used while still being cost-neutral.
What new technologies/trends accelerated for 2022?
In 2022, many retailers continued to use AI and machine learning, with a rise in connecting data and technologies to leverage new use cases. This was a response to workers and consumers becoming more digitally active, with brands already using standardized APIs and RFID systems to share data and connect with consumer and retail applications. For example, store staff can enhance the shopping experience as product availability increases based on the RFID data.
In the context of the scarcity of staff, automation has also evolved as expected. It is essential to support people in their daily work and make their lives easier. While retail personnel must focus on the customer experience, specific (administrative) tasks can be taken over by technology. While fixed RFID infrastructure is making serious progress, mobile RFID handhelds are still the “swiss knife” for retailers, yet the option to cover multiple roles and automate processes has advanced significantly.
Regarding RFID deployments in retail, the speed of implementation is crucial. RFID is an enabling technology, adding proven value as the foundation to create stock visibility and solve stock inaccuracy problems. However, it’s become a battle for (IT) resources for retailers who are also undergoing digitization projects. To overcome this, it’s vital to orchestrate different initiatives (RFID, OMS, mobile payment, digital touchpoints, mobile apps) in parallel.
What were the biggest opportunities/advantages?
It is vital to recognize the challenges seen in omnichannel retail and supply chain alongside its innovations, including the impact of the cost of living crisis, the substantial rise in energy prices and a shortage of skilled workers, which will affect how we move into 2023.
In this context, RFID is helping to provide more automation, better data, and smart tools to improve labor efficiency. At the same time, the industry can continue to break up the silos that still take place in many retail organizations that use different systems in each department. 2023 is the chance to roll out a single source of truth for the stock, and RFID will play an important role in this. When integrated, the technology allows movement from a keyhole view to a unified view with an end-to-end approach. Cyber security should also not be forgotten as we continue to embrace new technologies, with greater awareness and reports about various attacks.
These advancements in the retail sector prove that as technological advancements evolve, it is key that organizations maintain their relationships with their customers and progress with their needs in mind. It will be fascinating to see how the retail sector advances in 2023 and how the industry continues to develop in the face of such large-scale transformations.