What are the advantages of RFID

RFID in retail

What is rfid

RFID (= radio-frequency identification) means "identification with the help of electromagnetic waves". A wide variety of articles and goods can be identified, tracked and monitored without contact. But how exactly does this work in practice? The following practical example describes possible applications in a supermarket - from the point of view of the supermarket operator as well as from the customer's point of view.

RFID: Practical Applications

The underlying economic processes for the supermarket operator

RFID technology saves time and effort. It starts with the purchase. The booking of the goods takes place without visual contact - completely automatically. The underlying ERP or merchandise management system automatically identifies and saves all new articles. The supplier automatically receives a message that the goods have arrived at the customer or the dealer. Missing parcels or pallets can be tracked seamlessly. One manual step remains - namely the filing of the articles in the respective place in the warehouse or in the supermarket with the help of appropriate reading devices. Here, too, the RFID technology supports: If a package is placed in the wrong storage location, a signal tone informs the warehouse employee of the error.

The benefit for customers

In the supermarket itself, the shelves are equipped with transponders. If the signal is missing, the article is missing. The information is captured by the ERP and further scaled. Articles returned incorrectly by the customer can also be easily tracked down and put back in their actual place. Monitoring of the respective best-before date (best before date monitoring) is also possible with RFID. In addition, the employees' working hours are recorded and transmitted to the personnel management software. Another antenna in each shopping cart detects the items, can forward the information to the cash register and thus enable cashless payment.

All of this can also be linked to an intelligent refrigerator at home - the refrigerator also has RFID antennas or sensors and warns if the item is not there. An automatic ordering function is also conceivable here - the refrigerator informs the supermarket what is missing. The goods are delivered to your home within a few hours.

RFID - a dream of the future?

It all sounds like a dream of the future. But we already have the technology. The only thing missing is the nationwide implementation - with good reason, as the following overview of the RFID advantages and disadvantages shows.

General RFID advantages:

  • Reduction of stocks - information about sales is available directly
  • Always known which articles are where
  • A visual inspection is not necessary
  • Human errors are avoided
  • Almost error-free data exchange
  • Reduction of staff
  • High technology performance
  • Protection against brand piracy
  • High traceability and traceability (it is known how it was transported, storage, etc.)
  • Permanent availability of goods
  • Electronic price displays - prices are displayed in real time (but not the adhesive label!)
  • Checking the expiration date
  • The inventory becomes easier
  • Automatic scanning and payment - errors in the ordering process and with change are avoided, and personnel are saved
  • Avoiding theft
  • Production errors can be identified quickly and the goods withdrawn from circulation

General RFID disadvantages:

  • Costs for hardware, software, adaptation of the infrastructure
  • Risk of sunk costs (RFID benefits are less than costs)
  • Only works if dealers and manufacturers play along and the devices have an RFID code
  • Lack of standardization of the systems
  • Different frequencies and protocols that are not compatible with each other
  • Also different internationally - internationalization is difficult to achieve
  • Hacker attacks and data spying possible
  • Other data can be fed into the chips
  • Radio traffic can be intercepted or disrupted
  • The chip can be removed
  • Employees can feel monitored - the working atmosphere deteriorates

Advantages and disadvantages of RFID from a marketing point of view

advantages

  • Customer profiles can be created through shopping behavior and stored in customer data
  • Electronic advertising displays display customized advertisements
  • Custom pricing
  • Accelerated payment process at the checkout
  • More space for service
  • Order the refrigerator, something missing at the supermarket - delivery straight to your home

Risk:

  • Collection of customer data - no advantage for the customer! - Loss of image possible
  • Compliance with data protection regulations
  • Customer data must be evaluated (social CRM)

Advantages and disadvantages of RFID from the customer's point of view

Advantages:

  • Individual offers and prices
  • Pay faster
  • Refrigerator optimization (expiration dates etc.)

disadvantage

  • Transparent customer - no more control over data
  • Privacy conflict
  • You can track the customer all day long

Political Aspects

advantages

  • It can be checked whether the yoghurt pot ends up in the yellow bin or in the organic waste - positive consequences for the environment
  • The state can take better action against theft
  • Direct recall campaigns are possible because the customer who bought the defective item can be identified directly
  • No receipt is required to exchange

disadvantage

  • Growing unemployment is feared
  • It is now very difficult to guarantee data protection

RFID implementation in practice

RFID systems offer wholesalers and retailers the opportunity to automate almost all trading processes. Larger companies in particular have enormous savings potential here. But RFID also has its downsides. It is expensive to purchase and there are still no sensible data protection concepts. Different transmission standards make a nationwide or even international introduction difficult. This would have to be the case first in order to make the new technology more attractive.

In addition, the advantages and convenience of RFID technology would have to clearly outweigh that so that customers lose their skepticism about the huge amount of data that will arise.

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