The retail industry is one of the most trending industries, as it refers to businesses that sell services or products directly to consumers. Many big brands of clothing, products, and businesses reach consumers without any middleman interaction, and that’s a very good thing for both sides. The retail market size has grown strongly in recent years. It will increase from $28,846.57 billion in 2023 to $31,310.6 billion in 2024 at a compound annual growth rate (CAGR) of 8.5%.
Inventory management is another aspect of every business, including the retail industry. It is necessary to manage inventory to its full potential and reap the highest benefits. There are many ways to manage the industry, such as manual checking, barcode scanning, etc. However, conventional methods are also time-consuming. In this advanced world, one cannot stay ahead if one does not follow the trends.
Overview + Related Statistics
Many technologies can enhance real-time inventory management, as RFID and IoT solutions are major among all. These both have the potential to make them different and incredible tools for real-time inventory management. With the RFID technology, real-time tracking, enhancement in accuracy, faster restocking, theft, etc., aspects get benefits. On the other hand, IoT-powered solutions can offer automation, predictive analytics, improved decision-making, etc., benefits that overall create a well-managed inventory. Many big retail brands already implemented these solutions. Here are a few examples mentioned below.
- Walmart uses RFID technology to monitor their inventory and warehouse.
- Zara is another clothing brand that uses RFID to track merchandise from the warehouse to the store shelf.
- Amazon is one of the best real-world examples that uses RFID and IoT solutions that enable seamless product tracking, precise order fulfillment, and improved warehouse management.
The global RFID market size was valued at USD 14.11 billion in 2023 and is projected to grow from USD 15.49 billion in 2024 to USD 37.71 billion by 2032, exhibiting a CAGR of 11.8%. The global market size for Internet of Things (IoT) solutions and services is expected to be around $320.33 billion in 2024.
In this article, we will see the role of RFID and IoT solutions for real-time inventory management in retail. We will also see some other details like benefits, challenges, etc. In the end, we will end the discussion with a concluding paragraph.
The Role of RFID and IoT Solutions for Real-time Inventory Management In Retail
IoT generally refers to the technology that is used to connect devices and networks and to gather information. RFID generally refers to radio frequency identification that can be used to trace and track by using tags. These two technologies can offer various solutions that enhance real-time inventory management for retail businesses in various means, such as enhancing security and smart techniques. Real-time monitoring, remote monitoring, tracking, tracing, etc. We will see more detailed pros and cons as we move forward.
Also Read: The Impact of RFID and IoT on Retail Loss Prevention and Security
Benefits of RFID and IoT Solutions for Real-Time Inventory Management in Retail
Every technology has its benefits and challenges, as these both too possess those qualities. In this part, we will talk about the benefits of IoT- and RFID-powered solutions that can be obtained by the implementation of these for real-time inventory management in retail businesses. Below are a few key benefits mentioned below.
Visibility in real-time
As the topic belongs to real-time inventory management, so real-time visibility should be discussed in beneficial terms. Real-time visibility generally refers to the continuous updation and information about the condition of aspects that give proper ideas about the situation.
In retail businesses, inventory management is very important, where RFID and IoT solutions can provide benefits with their real-time visibility ability. It allows businesses to know the exact movement of products that help them to tackle problems like restocking, stocking, removing unnecessary products, or expired products, etc.
Smart shopping methods
This world is full of smart technology and facilities that can prove beneficial for customers as well as for businesses too. With the RFID and IoT-driven solutions, there can be smart shopping methods like card payments, automatic itemized billing, smart checking, etc., that can be introduced.
It saves customers time and also enhances their shopping experience at the retailer’s store. This provides benefits to retail businesses by collecting every bit of information that overall helps to proper utilization of inventory.
Reduce shoplifting
Shoplifting has been a critical issue for all retailers stores, as stats show that more than 500,000 shoplifting incidents occur each day around the world.
This results in serious losses for the retail storekeepers and for brands too. RFID-powered tags can reduce shoplifting issues as they can make alerts if any products cross the boundary area. On the other hand, IoT-powered sensors and cameras can also detect unauthorized activities that warn the management. This overall reduces this serious concern and saves a lot of unnecessary expenses or losses that directly make a good impact on inventory management.
Deny out-of-stock condition and loss in sales
Inventory should be managed in a way that does not overload any products in too much amount or reduce the amount of products too much. It can be possible when one has the proper information; otherwise, it results in a loss in sales for the retail businesses.
With conventional inventory management, it is quite impossible or difficult to know which products are fewer in number. So sometimes it creates a situation of unavailability of products that customers ask for. Where with the implementation of RFID and IoT solutions, real-time tracking of the amount of products present gives a proper idea about stocking. This denies the condition of out-of-stock and also prevents unnecessary loss in sales.
Reduced wastage
Wastage is also a big issue for many retail businesses while managing their inventory. There can be wastage generation while managing inventory with conventional techniques, as overstoring of products increases waste from spoilage.
This can mess up the whole inventory and also can affect the other products in bad manners. By the implementation of IoT and RFID solutions, retail businesses can have proper information that avoids overstocking conditions that overall prevent wastage generation.
Also read: The Impact of IoT on the Retail Business Today
Overcoming Challenges in Implementing RFID and IoT Solutions for Real-Time Inventory Management
So, we have looked at the beneficial aspects of IOT and RFID solutions. Now, it’s time to consider some cons that could be faced during and after implementation.
- Data collision is always a concern while reading multiple tags within a particular area. This could result in inaccurate data retrieval.
- Environmental factors should also be considered while using RFID tags. Materials like metal can interrupt the signal of RFID tags, which can affect their overall performance.
- IoT data management can be a concerning thing due to the volume, velocity, variety, accuracy, quality, storage, security, privacy, and accessibility of the data.
5 Examples of RFID and IoT Solutions for Real-Time Inventory Management in Retail
Managing inventory can be tricky. RFID and IoT make it easier. Let’s explore five examples of how these technologies help in retail.
1. Smart Shelves for Stock Updates
Smart shelves use RFID tags and IoT sensors. They track items on the shelf. When stock is low, they send alerts to store managers. This avoids stockouts and keeps shelves full.
2. Automated Inventory Scanning
RFID scanners can read multiple tags at once. They check inventory levels automatically. This reduces the need for manual counting. It also saves time and avoids errors.
3. Real-Time Inventory Tracking
IoT sensors can track items across the supply chain. From the warehouse to the store, you know where every item is. This helps prevent theft and misplacement.
4. Smart Checkout Systems
RFID-enabled systems speed up checkouts. Customers can scan items quickly without waiting. This improves the shopping experience and reduces queues.
5. Personalized Promotions
IoT devices collect customer data during shopping. They suggest offers based on preferences. This boosts sales and improves customer satisfaction.
RFID and IoT transform inventory management. They save time, reduce errors, and improve the shopping experience. Retailers adopting these technologies stay ahead.
Also read: The Power of IoT in Retail to Optimize Your Business
Final Words
RFID and IoT solutions have great potential to enhance real-time inventory management visibility for retail businesses. These tools or technologies can enhance the retail business in various aspects like security, reduce theft, improve inventory accuracy, improve decision making, pricing management, automation of repetitive tasks, etc.
There are a few challenges while implementing these technologies, such as the cost of implementation, integration complexity, data security, maintenance, etc., but the benefits are too much superior and easily outweigh the benefits. Overall, retailers can maintain their competitiveness and provide customers with the best possible shopping experience by integrating RFID and IoT.
