RFID and the Frictionless Future

Each year at the National Retail Federation’s Big Show, held at the Jacob Javits Center in New York City, thousands of brand owners, leading retailers and technology leaders gather to see what the future holds for the world of retail. New trends in retail come to the forefront at the Big Show.

This year, there was a lot of innovative technology on hand among the leading RFID specialists, but what was particularly interesting was the frequent discussion regarding the “frictionless” future. The idea behind frictionless shopping is that nothing will slow down the shopping experience, notably at the checkout line, and will also allow retailers to ensure that items are available to be located and sold.

The Amazon Go store in Seattle is an example: Shoppers go in and pick up items, which are recorded by shelf sensors and video cameras. When they walk through checkout, their credit card is charged with what they have; there is no scanning or bagging of items.

No one really likes long lines at checkout. However, while smart shelves and cameras are one way to create this shopping experience, there has to be a more effective way. That may be a key opportunity for RFID and flexible and printed electronics.

One example is how EZPass-type automatic toll systems work. The tag is read by readers as the vehicle travels through the toll gate. Those systems use RFID. Now, if all shopping goods used RFID or flexible printed electronics tags, a shopping cart could travel under a reader, which would then charge the credit card on file. Unlike barcodes, which must be scanned individually, an RFID tag can be tracked even if the tag is not in the line of sight of the reader.

In short, the frictionless future hints at a time when all of shopping will be virtually automatic, and it is an area that is of much interest among retailers and RFID industry leaders.

“Ten years from now, personally, I believe we will live in a world of connected products where everything will have a digital identity,” said Francisco Melo, VP/GM global RFID for Avery Dennison Retail Branding and Information Solutions (RBIS). “These products themselves will be elements of search, social connectivity, and they will serve as linkage to your Facebook page, where you can interact with other people. They will also provide loyalty benefits and open up specific information, which is very different from what we envision today. We believe that eventually, everything will be connected and Avery Dennison will bridge that gap.

“We see this coming down to nearly any product,” Melo added. “I was on a panel at the NRF Big Show with a retailer who said that he believes that RFID today is like barcodes were 25 or 30 years ago, when people were asking whether you could put a barcode on a bottle of water, and would it be worth going through that effort. It is, because the experience it provides in terms of process and optimization actually outweighs the potential challenge.

“Ten years from now, the competitiveness of RFID and digital connectivity means we will also have a very different cost position from today,” Melo concluded. “From a retail perspective, I think we live in an anti-channel world. It is all about the experience, and retail will have to provide the right experience, creating frictionless shopping.”'

Bob Sanders, SVP and GM for the Data Capture Solutions Division of Zebra Technologies, noted that the retail world has changed. “The genie is out of the bottle, so to speak,” Sanders observed. “In our on-demand society, we want to be able to shop where we want, when we want and get physical delivery of goods in any manner that we want, and there is no going back. As a result, retailers will have to re-engineer their physical operations to allow for the most efficient delivery models available and RFID will play a crucial role here.

“Similarly, the in-store checkout process will also undergo significant changes,” Sanders added. “What many are referring to as frictionless checkout will emerge in the not too distant future where shoppers will come into the store, pick merchandise off the shelves and leave the store, and the transaction will be completed without a traditional ‘checkout’ process. We are seeing bits and pieces of this concept being trialed by both retailers and e-tailers alike. I think this is something that will come to fruition within the next 10 years.”

Gaylene Meyer, senior director global marketing and communication for Impinj, noted that retailers and consumers alike benefit from enhanced analytics.

“Enhanced analytics driven by RFID gives retailers more opportunity to cross sell and upsell,” Meyer said. “It provides accurate data, frictionless data that can identify thousands of items without line of sight, without barcode scanning. Retailers can keep track of shipments and eliminate errors from the shipping process.”

Meyer used the example of the interactive fitting room as a win-win for consumers and retailers.

“The consumer gets more information on the products,” Meyer said. “Improving the fitting room experience will increase conversions, and retailers will be able to lower their minimum inventory threshold with more accurate counts. They will also know how fast they need to replenish stock.”

Industry leaders see interactive fitting room as an area where the shopping experience can be enhanced. “There will always be a demand for brick and mortar stores to provide experiences for consumers, and retailers are going to want to enhance that experience,” said Carl Rysdon, Checkpoint Systems’  VP of sales. “Interactive mirrors in fitting rooms are one way, and that connects to our Halo platform. These mirrors allow the customer to see other options, and ask store associates to bring those options into the fitting room. This is important for retailers, as the rate of abandonment once people leave the fitting room is high.

“If we could offer a store that allows people to try things on in a convenient manner, many people would choose that rather than shopping online,” Rysdon added. “Retailers want tools that will convince consumers to continue shopping. Sensors allow us to tell if people are looking at an item, taking it into the fitting room, and trying it on, and whether it converted to a sale. Give insights to store owners, and they can use this information to choose inventory more effectively. It will be a boon for every segment of retail.

Brand owners can see what is selling, which will lead to faster turnaround of product and more fast fashion. RFID can help you make these decisions quicker.”

Karin Fabri, head of corporate marketing and communications for SMARTRAC Group, discussed how the smartphone is changing the world of retail.

“I think 10 years from now, the retail environment will be truly digitized, with many more products being digitalized compared to today,” Fabri noted. “There will be full visibility. Smartphones are leading to an evolution for consumers. Consumers will be able to interact with the product, and brands will receive a lot of value because they can utilize the ability of the digitalized product for analytics and warehouse functionalities. Our Midas tag is a good step, as it can be used on metal and liquid surfaces. It will be attached to products in the retail space, and consumers can use the product to track in-store availability, and for the shopping experience, where you can take all of the products in the cart, and it will be scanned and immediately charged to the credit card and then leave. Consumers expect to have less time for shopping, and they would like to spend less time in checkout lines. It will be a smooth experience.”

There are other areas of note in the retail space.

“I expect a large number of low-cost read points will be used throughout the retail establishment with RFID just being one of the sensors used in the platform to accomplish the customer needs of 100% item real-time locationing and movement of goods,” said Neil Mitchell, senior director of marketing at Alien Technology. “This will be true in the warehouse as well as the retail showroom.”

Ryan Parker, VP, responsive retail at Intel, said he sees the most interesting trends being artificial intelligence (AI) being married together with sensor fusion and computer vision.

“Bringing these sensors together can help you can get a comprehensive view of the store, whether it is customer experience where my inventory is or how I can make the workforce more capable,” Parker said. “This approach fuses video and RFID.”

“Smart Shelves are a perfect example where you can run promotional content and bring a unique exciting experience to a shelf that is usually boring and repetitive,” Parker added. “This is a completely different feel. Now it is lit up and drawing me in as I get closer to it. Some advertising can be specifically targeted to me and get real dynamic pricing, and the store gets the perspective of what inventory is on the shelf.”

Parker believes the future will see revolutionary advances.

“Ten years from now, I think it will be really exciting,” Parker said. “By then we will have merged brick and mortar and the online presence into one cohesive unit, and there won’t be this either/or mentality around it.

“AI will help us get the exact right experience, from the time I start my journey browsing items and carrying it through the showrooming phase where I try it on, all the way through time of purchase and as the product continues to go on, the stories that can be told about the product and the brand,” Parker continued. “A few years ago it was pretty much pie in the sky, it wasn’t real, and now you see people deploying it in real stores and changing how people shop.”