Shopper behavior and spending habits are changing dramatically, causing the retail industry to face a period of significant disruption. As shoppers are empowered by mobile devices, social media and the Internet, they expect retail experiences that combine choice, convenience, superior service, and a clear understanding of their individual preferences. This shift has been heavily influenced by online giant Amazon and other similar companies, which use data-driven insights about product preferences and spending patterns to provide shoppers with enhanced experiences by giving them what they want, when they want it.
This intimate customer knowledge and the effective use of data and technology are paying big dividends for online merchants. Roughly eight in 10 Americans (79 percent) are now online shoppers, up from just 22 percent in June 2000, and 82 percent say they consult online ratings and reviews when buying something for the first time. While online shopping frequently offers lower prices, greater convenience, and many other benefits that brick-and-mortar retailers are struggling to match, 64 percent of Americans say that, all things being equal, they prefer buying from physical stores to shopping online.
With RFID technology, brick-and-mortar retailers can use this preference to their advantage by bringing the best of both the physical and online worlds to their customers, while answering all those age-old questions: How do I keep good track of my inventory? How can I provide a better customer experience to my customers? How do I optimize my workforce to get maximum effect on my bottom line?
Many retailers have reaped the benefits of RFID by taking that critical first step to implement RFID solutions in their stores. When it comes to choosing the right type of RFID investment—fixed/overhead or handheld—retailers should be careful of implementing a handheld solution that’s too basic and does not provide them with the complete picture. Fixed RFID solutions deliver maximum value to the retailer by not just providing ROI stemming from more accurate inventory levels, but through automating many of the store operations to enable associates to focus more attention on the brand, the product, and—most importantly—the customer.
Overhead RFID unlocks a wealth of data in the store, providing information and insight on customer preferences and interaction with product previously relegated to the online shopping space alone. While we are glad that retailers are exploring RFID in their stores, years of research and development in the smart retail space tells us only investing in the right technology will deliver the results and the value in today’s shopping environment. So what is the right option—overhead or handheld?
Overhead vs. handheld RFID
Overhead RFID has many advantages over handhelds, but in actuality, retailers don’t have to choose one over the other. There is a way to have the best of both worlds, and the most successful deployments will find the right mixture of both solutions. While many retailers may opt for a handheld first with some fixed sensors over portals or a point-of-sale approach due to what can sometimes be perceived as a lower cost barrier and more simplicity (a misconception addressed in a previous blog on RFID technology blog), this can result in a failed attempt to reap upfront benefits while minimizing the investment needed to implement a full overhead solution.
What this strategy also doesn’t address is the fact that consumer shopping patterns and behaviors are always changing, and the way products are placed throughout the store should reflect this reality. A portal might help to determine when an item moves from back stock to the sales floor or when it leaves the store, but where the item is in between those events will remain a mystery.
The winning approach: Augmenting a fixed solution with handhelds
Static point-of-sale stations have existed in retail since the first store ever opened, but—as Intel is deeply familiar with this—brick-and-mortar retailers find themselves at a crossroads with how they deal with online competition. Retailers continue to invest in mobile POS solutions, enabling store associates to assist customers anywhere in the store and reduce the friction of checkout. Many also aim to enable a frictionless self-checkout in the future. In this scenario, when and where the customer transaction takes place in the store is very much to be determined.
Even in a fixed RFID deployment that provides retailers with the real-time data they need, a handheld sensor may sometimes be necessary to search for exceptions in the store. But leading with a handheld solution supplemented with transition-based (portal) sensors will fall short of unlocking the full potential of RFID benefits since it will fail to provide retailers with the store coverage and real-time data ingestion they truly need. Augmenting a fixed solution with handhelds is the true winning approach: It will not only provide retailers with proper store coverage, it’ll give them real-time data ingestion too, hence providing e-commerce quality insights.
A product like the Intel Responsive Retail Sensor (Intel RRS) could provide a viable long-term solution to retailers, as it delivers accurate, always-on, real-time data that gives brick-and-mortar retailers the best of both worlds—combining the convenience, speed, and selection of online shopping with the person-to-person service and opportunities for customers to touch and try on products that only brick-and-mortar stores provide. Using innovative technology solutions and data-driven insights to bring the advantages of online shopping into their physical locations enables retailers to transform their businesses and reinvent the in-store customer experience.
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