Struggling, But Fighting Back
The retail sector has seen multiple store closures this year, increasing the pressure to innovate through two-way radios, body-worn cameras, RFID and other wireless technologies. Kate O’Flaherty reports
Toys R Us, Maplin, Mothercare and House of Fraser were just a few of the casualties in 2018 as consumers chose to shop online instead of visiting bricks-and-mortar locations.
According to some retail experts, this is leading to a reluctance to invest in technology – which itself paradoxically makes it even more difficult to compete. However, others point to the growth of body-worn cameras and digital two-way radios in shopping centres and large outlets, in addition to RFID boasting more advanced capabilities.
Some firms are already saving cash by taking advantage of RFID solutions. Marks & Spencer is famously using the technology. Meanwhile, Tesco says SML’s deployment of RFID technology in its F&F clothing stores has been a key part of helping it reduce operating costs by £1.5bn over three years.
In fact, the retailer says RFID has helped 54 stores in the UK get back into profit. In addition, backroom stock has been reduced by 19 per cent and stock availability has risen from 93 per cent to 96 per cent over the course of two years.
Dean Frew, CTO and SVP of RFID solutions at SML Group, says more retailers are stepping up to invest. “Retailers have a huge inventory accuracy problem. It’s hard to count things as they move from factory through to store.”
According to Frew, the benefits of RFID include a change in the experience for the consumer at the check-out. “There are retailers in the UK that believe they are losing sales as, when there are queues, people will drop their basket and leave.”
But RFID has an image problem: many see it as an ‘old’ technology. Dr Sithamparanathan Sabesan, CEO and co-founder of PervasID, says he has to overcome this when talking to retail CEOs. “They see RFID as an old technology – it has been around since World War II,” he points out.
Meanwhile, previous iterations of the technology were often too expensive and didn’t work very well. “They weren’t getting accuracy, so retailers think it won’t work again,” says Dr Sabesan.
PervasID is a university spin-out, which according to Dr Sabesan has improved RFID. “We have solved problems with inaccuracy using RFID and we can sell the solution at a much cheaper cost.”
However, retailers also need to prove the technology works to make investing worth it. “They need to see how they will get return on investment,” says Dr Sabesan.
To prove this, he says retailers can either buy hardware outright or lease the equipment to trial the technology.
He points out that viewing stock inventory in real time allows retailers to see what is in the back storage area and not out for sale. In addition, it can track shoplifting and is also labour-saving. “They don’t have to do things manually and it will automate the whole thing,” Dr Sabesan says.
Currently, retailers put RFID tags in their price labels and use a hand reader to manually scan them. This is quick and accurate but doesn’t provide real-time inventory, he adds.
He thinks it makes sense to replace hand readers with fixed devices deployed in the ceiling. “You will have ceiling systems able to filter a signal to tags beneath them and then back to a ceiling antenna to a centralised server to tell us what is in each area.”
The retail sector is struggling and the unrelenting growth of online shopping will probably see it suffer more. But experts agree that this should push retailers even harder to innovate. Those that survive will likely be the retailers offering engaging services at the same time as improving staff efficiency and safety though two-way radios and associated devices.