Digitalization of retail networks based on Internet of Things technologies from ISBC

16 February 2018
Digitalization of retail networks based on Internet of Things technologies from ISBC

RFID as a mandatory attribute of success in omnichannel trade

Today, the pace of progress, the transformation of markets and the emergence of new products have multiplied many times. The world is changing and digital technologies are taking over reality. People are increasingly leaving for the virtual reality of the Internet: computer games, social networks.

The increasing penetration of Internet technologies into our lives has led to an increase in the share of online trading. In 2016, the share of Internet commerce in retail was about 10% in the world and about 5% in Russia.

Such indicators do not pose a significant threat to traditional retail formats. But using the best practices of online business, growing in Russia at 20-25% per year today, can dramatically improve efficiency. Retailers, combining the best of online and offline, will be able to achieve growth in commercial results and market share at the level of the best Internet businesses.

How to combine offline and online?

All possible methods have already been used to increase the efficiency of classic retail stores. Physical limitations associated with store areas and changes in the flow of customers, as well as volumes of commodity stocks, severely limit the processes in retail trade. There is always a contradiction between a beautifully designed trading hall with a low density of goods, where the range may be insufficient, and a denser layout, but in a larger assortment.

Another serious problem of retail chains, especially pronounced in grocery chains and other stores with a very wide assortment, is warehouse management. Only the use of modern digital technologies, both in the warehouse and in the sales room, can increase all store indicators, from turnover of goods to the average sum in the check, gross sales and profitability of the business.

But how to integrate the familiar world of goods, pallets and packaging with the modern online technology? The only option is to create a digital "twin" for each product, digitize the world of retail sales, create the Internet of Things. But this does not require "smart teapots", you do not need to integrate complex chips into cucumbers and tomatoes.

Today, RFID technologies that provide identification of any object in the radio frequency range, already allow us to connect the reality and the world of digital technologies. Any object, good, is equipped with an inexpensive label, receives its unique digital image and becomes a part of the Goods Internet .

According to the research company IDTechEx, the volume of the international market of solutions based on radio frequency identification technology, RFID, is estimated at a rate of $11.2 billion at the end of 2017. By 2022 it is predicted to reach $14.9 billion.

ISBS, a leading Russian manufacturer of smart cards and RFID identifiers, develops and creates new solutions based on RFID technologies. Today we are already turning retail into Smart stores with Smart Warehouses and digital loyalty systems for customers.

Smart Warehouse

Tracking the movement of objects through warehouses is quite an up-to-date task. To monitor the movement of objects across the territory, we recommend the use of UHF (ultra-high-frequency) tags. To track the movement, you can apply either a single label or a group of labels. At the same time, another approach is possible, when a group of products can be identified by a single label.

ISBC RFID equipment has wide opportunities for placement, both secretly and openly: in the arch, in the aisle, in the gate, under the false ceiling or under the raised floor. Integration of Smart Warehouse systems into the information system, including 1C, SAP and many others, is quite simple.

As a result, each new delivery is registered at the time of crossing the RFID portal (shown in the figure), and any goods unauthorized to leave the warehouse can be tracked. The management of retail chains and warehouses at any time will be able to obtain information not only about the stock balances, but also the exact location of each goods position, which will ensure the growth of turnover and the implementation of the FIFO principles. The introduction of Smart Warehouse technologies will drastically reduce the need for staff, will allow to amplify the efforts of retail network employees to serve customers, increasing their loyalty.

Radio frequency identification in the trading floor

Many retailers have already mastered RF technology to combat the theft of goods. But to use the identification of tagged items only to control buyers at the output is inefficient. The integrated use of RFID in the trading floor will greatly enhance the efficiency of retail business. One of the key bonuses of using RFID technologies in the trading floor is 100% reliable information about the goods available, and as a result, greater customer satisfaction and increased loyalty. Use of the received information is a guarantee of presence of production of "all brands, colors and sizes" in a trading floor. Application of RFID allows you to trace the history of each unit of the product. The advantages listed above mean only one thing: sales growth, accompanied by a significant reduction in losses.

According to NXP, one of the largest manufacturers of microelectronics in the world, the availability of the entire declared line of products and products on the shelves allows a sharp increase in sales. The growth of gross profit reaches 15%, the decrease in the cumulative component of losses is up to 50%.

Using automated RFID systems and handheld scanners, sellers can at any time tell the buyer the location of the desired product or find the right size. In this case, the things in the fitting room or in the warehouse will also be available for selection, which will not lead to a decrease in sales with the accumulation of not bought clothes outside their places.

The transformation of a retail store into a digital trading floor will allow the introduction of many developments from the world of the Internet. With the help of a terminal, mobile application or a chat-bot, the buyer can quickly select the right product and get a hint about its location on the shelves. Having integrated RFID with the Smart fitting room, the store will have the opportunity to create an additional sales channel, offering suitable products or discounts during fitting to increase the check of the customer.

RFID-loyalty programs

Not only goods, but also buyers can be integrated into the world of Smart Store. Running for 5 minutes in the trading floor, a man in modest jeans can be a VIP client, able to spend tens and hundreds of thousands of rubles, and a modest grandmother - to buy a lot of gifts to her grandchildren. And only a clear identification of the customer on contactless loyalty cards will be able to show that this is your regular buyer, which brings hundreds of thousands of rubles annually.

Of course, today everyone uses discount and bonus cards. They are forgotten, broken, and unusable. And the range of their identification is a few centimeters. In contrast, modern ISBC technologies based on BluetoothLowEnergy technology allow you to recognize the customer at a distance of up to 10 meters on a mobile phone. The client will not forget and will not lose the identifier of the loyalty program if it is a mobile device.

In addition, traditional cards can be replaced with multi-functional identifiers from ISBC: smart cards, AIRTAG® RFID tags and RFID bracelets in the corporate style of the retail network. Convenient, beautiful and practical devices already combine the functions of loyalty cards and transport applications of most Russian cities.

The buyer, who daily uses a smart card or a key ring of a retail network in transport, constantly remembers the experience of successful purchases in the store. ISBC specializes in co-branding retail projects with the transport infrastructure of Russian cities, increasing the effectiveness of retail interaction with customers.

Why digital technology in retail?

Application of RFID technologies of Internet of Things from ISBC will ensure the optimization of work processes in retail. The main results will be:

  • high inventory speed;
  • ability of inventorying several times a day;
  • ability to quickly inventory when changing staff;
  • little dependence on the human factor;
  • inventory without opening the package;
  • automation of warehouse workflow;
  • smaller requirements for the areas of trading halls;
  • constant monitoring of the availability of goods on the shelves and in the trading floor;
  • high speed and accuracy of shipment from the warehouse and acceptance in the store;
  • low labor intensity of inventory.

In the results, the trading network will receive:

  • increasing the efficiency of inventory management;
  • reduction of costs;
  • growth in turnover;
  • increased customer loyalty;
  • growth of the average check;
  • ability to serve a larger number of clients during peak hours;
  • increase in sales and profits;
  • increase in profitability.

This is why the ISBC's digital RFID technology is the key to a successful future for retailers. Integration of the best retail practices with the digital world will allow innovation networks to increase financial performance, attract additional customers and rebuild from competitors. Using all 3 key success factors, Smart RFID-store will be able to quickly increase the market share and take the lead.

And, unfortunately, saving on innovation and abandoning new technologies can lead to a loss in competition. Today, we must not forget that only a continuous development based on digital technology can ensure success and prosperity in the future.

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