Radio frequency identification (RFID), which uses radio waves to transfer data to a receiver, has been around for decades now, but only in the last several years have retailers deployed the technology to improve inventory control by tagging each item and implementing RFID scanning procedures. Even more recently, retailers are using it to offer consumers enhanced experiences in-store.

“As new technologies bring opportunities to the retail environment, Discover Network encourages business owners to evaluate their brick-and-mortar capabilities and consider how emerging technologies such as RFID could enhance the consumer experience for their business,” said Amy Parsons, Vice President of Strategic Merchants and Global Product Solutions at Discover.

Here are five ways RFID is enhancing the consumer experience:

It's making it easier to identify and cater to your most important customers.

Some restaurants, clubs, festivals, resorts, and theme parks have employed RFID-powered cards or wristbands, encoded with the consumer's information, to create personalized VIP experiences. Guests are scanned as they come on-site and information is delivered to staff via mobile devices, so that employees instantly know the customer's name, size, preferences, or existing reservations. And in many cases, a payment capability is available to make purchases directly with these cards or wristbands, reducing payment friction almost completely and creating a special experience for customers.

It enables you to elevate the in-store experience.

While a wristband for your retail operation is clearly not a practical goal, a RFID-equipped loyalty card is worth considering, given the low cost of RFID tags today and the potential return-on-investment from the increased level of engagement with customers. When a customer enters the store, you'll not only know their name and information, which could improve service, but you'll also know their purchase history, which can be leveraged for targeted offers while shopping or at point-of-sale.

“Widespread adoption of RFID in stores could offer two key benefits for consumers: convenience and personalization,” added Parsons. “By deploying RFID technology, merchants could tailor deals and product suggestions to interested customers and make this information available on their mobile devices, or it could offer product information while consumers are trying out an item, such as in dressing rooms or at electronics stores.”

According to Parsons, this makes RFID technology a potentially lucrative marketing tactic for those merchants, as increased convenience and personalization in the shopping environment could drive sales and strengthen brand loyalty.

It makes your omnichannel retail operation more accurate.

Major retailers that have rolled out comprehensive item-level RFID inventory tracking have seen double-digit percentage improvements in inventory accuracy as compared to barcode-only systems.1 The result? Increased sales from higher in-stock rates; improved customer satisfaction thanks to the speed and ease with which sales clerks are able to locate merchandise in-store; and vastly superior omnichannel fulfillment capabilities, which will be crucial in the years to come.

Plus, if your customers trust that online inventory maps out perfectly to what is available in-store, chances are they will be willing to make pick-ups more often, and you stand to benefit from the additional purchases that could frequently accompany such trips.

It's disrupting the fitting room as we know it.

In the case of apparel, item-level RFID systems can be integrated into mirrors or small displays in fitting rooms to allow customers to see whether alternate sizes and colors of a particular garment are available in-store. And, in some cases, shoppers can request those garments be brought to their fitting rooms without having to summon a clerk. This not only creates a pleasant and seamless experience for your shoppers, but it saves clerks time: There is no need to keep checking in on shoppers in their dressing rooms, and it eliminates potentially fruitless searches for a size or color that is no longer in-stock.

It makes wearable payments possible.

RFID is very much at the heart of the anticipated rise in wearable payments, not just with the venue-specific wristbands and cards mentioned above, but also with general devices like smartwatches. Near field communication (NFC) is used, for example, by the Apple Watch to make payments, and is a specialized subset of RFID — with some additional capabilities that allow for secure transactions. Since the launch of Apple Watch, the Apple Pay app has been updated to incorporate loyalty cards, making payments by wrist just a tap away for your customers. A friction-free sales process is part of the promise of RFID/NFC-based payments.

RFID technology's newfound affordability — they can be purchased for as little as $0.25 per tag—has opened it up to a wider audience and a wider spectrum of uses. Item-level RFID could be a game changing transition across your retail operation resulting in increased sales, reduced shrinkage, and omnichannel success.

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