Greater potential of RFID technology in fashion

RFID technology is increasingly being used in the fashion industry, and in a growing number of ways, according to a scientific study by the University of Parma.

The primary use for Radio Frequency Identification (RFID) in the fashion industry is as tags attached to garments, but research by the University of Parma reveals that the industry can make considerable gains by increasing its usage of this technology.

According to the results of the study, there are three important reasons for companies to utilize RFID. Firstly, it increases the stock reliability from 60-70% to almost 100%. Secondly, stock-counting takes a lot less time, and thirdly, the study shows that it has a positive effect on sales, boosting revenue by as much as 20%.

Omnichannel strategy

Initially, companies mainly used RFID for process automation and accurate stock visibility. Nowadays, retailers primarily use the technology for omnichannel activities – a sales strategy in which customers can choose between various channels, all of which are aligned with one another. The technology creates insight into which products are in stock and where. As a consequence of this, consumers are less likely to cancel an online order.

The results of this study come as no surprise, according to Antonio Rizzi, researcher and director of the University of Parma’s RFID Lab: “Many traditional retailers are expanding their e-commerce activities in order to compete with pure online players. The winners in a truly omnichannel world will be those retailers who use RFID and other technologies to gain accurate real-time insight into their stock situation.”

Risks for laggards

Retailers that have not yet started using RFID technology risk falling behind their competitors. Loek Boortman, CTO of GS1 Netherlands, a non-profit organization that develops international standards for the identification, capture and sharing of data, believes that it makes good business sense for companies to use RFID technology. He claims that, although omnichannel retailing is possible without RFID, retailers need to hold much more inventory in that case. “And that equates to lost turnover,” comments Boortman.