Item connectivity born from the maturing of the Internet of Things is being hailed as the booster to major growth in RFID adoption as intelligence is shared in real-time.
An interview with Chris Diorio, CEO of Impinj
By deploying state-of-the-art RFID readers and tagging items, retailers are able to collect a data feed that gives them item intelligence and real-time visibility into inventory location, identity and authenticity. With this data process coined as item connectivity, retailers now leverage their existing assets and develop competitive advantage across a number of different business aspects. Chris Diorio, CEO of Impinj, gives his views and predictions of the path along which this technology trend is leading.
As opposed to the growing phenomenon of inter-connected devices, why is item connectivity being hailed as the new way forward and how is it improving performance and productivity?
Item intelligence wirelessly captures the identity, location and authenticity of items, enabling, for the first time, trillions of items to be a part of the Internet of Things. This means they are collectively connected, rather than being scanned or read individually items by devices that ‘speak’ to each other. As a result, healthcare providers, manufacturers and retailers worldwide are leveraging item intelligence, enabling streamlined processes, data collection and better business decisions.
For retailers in particular, business the benefits include reduced out-of-stocks and markdowns through accurate and timely item intelligence; omni-channel fulfillment making in-store items available for sale online requires accurate, real-time inventory information. This means retailers can convert their stores and in-store inventory into strategic assets by transforming them into virtual fulfillment centers. Thirdly, by providing accurate, real-time location of all items within a store, an Item Intelligence platform can enable loss-prevention systems that deter theft by sounding alarms. Because systems using Item Intelligence also provide the identity of a stolen item (unlike legacy systems which only know that something has been stolen), the store’s inventory management system can be updated to accurately reflect the quantity of items on hand. From an operational viewpoint, item intelligence can enable speedy, accurate, bulk identification of purchased items at checkout, benefitting retailers by reducing time, personnel and space at checkout.
If this is deemed as a resurgence, how does it differ from what the market saw and became so enthusiastic about 10 years ago when EPC UHF Gen2 was ratified?
Indeed, EPC UHF Gen2 was Ratified in 2004 with the first Gen2 demonstration at a 2005 EPCglobal US conference. Then, the demo showed two readers taking an inventory via tags, while transmitting simultaneously.
With 48 fast moving tags and nonbe being missed, I recall the excitement in the room was palpable. In time, EPCglobal grew to more than 1000 end-user companies but adoption was disappointing. The reason was that the Industry focused on pallets, rather than items. We saw Metro and Walmart testing pallets, the arrival of the motorized pallet sled, changeable pallets and more.
But today we finally see item-level tagging fueling the resurgence with the market growing 35 percent year on year. There are applications going mainstream in areas such as brand protection, logistics and security, race timing, bringing operational configuration and asset management to improve retail Inventory, medical inventory and laundry management.
Which tag technology is today’s leader and in which sector?
Without doubt, UHF passive RFID is leading the market with UHF expected to grow at three times the rate of HF/NFC. Retail apparel is the lead opportunity, bringing the new and improved methods detailed earlier for inventory management, loss prevention, point of sale, customer experience and omnichannel fulfillment. But retail is the tip of the iceberg, with expected surges in adoption in the electronics and healthcare sectors as well as in consumer experience in general.
Can you provide a real world example of where this can help?
Black Friday is known as one of the busiest shopping days of the year. Shoppers typically line up for hours, rushing inside as doors open in search of special deals (usually only available in limited quantities). Product availability is not always communicated or guaranteed. Recently, a major retailer announced they are teaming up with an indoor mapping technology company to update their mobile app to display store floor plans. The maps feature pinpoints showing where to find Black Friday deals and door-busters, helping customers to navigate the store and get to the products on sale in a more efficient way. However, while the mobile app will pinpoint where products are merchandised, these pins do not guarantee the product is there or available.
To improve on this, retailers can leverage an RFID item intelligence data stream. By using an always-on, wide-area monitoring system like the xArray gateway, in conjunction with RFID tags, retailers can provide customers with real-time product locations and availability. That way, if one customer places an item on a wrong shelf, the next customer will still be able to find it. Customers can also feel confident about visiting a retail location as retailers can provide real-time product availability information on their website.
What are the predictions for the future?
In terms of infrastructure, the Internet of Things and the vision surrounding it has become real. And most importantly developments in the technology have meant that performance has gone up as costs have gone down. This means Inlay sensitivity has followed an exponential trend and a prediction is this trend will continue for another 10 years. In addition, the resurgence will accelerate with adoption of the ubiquitous tag and emergence of next-generation tag ICs. Belief and recognition of this trend is strong and has also led to the foundation of an industry alliance and brand to represent UHF RFID industry. Known as RAIN RFID Alliance and with 52 members from around the globe, it operates similarly to the WiFi Alliance and Bluetooth SIG.
Over the last 10 years, the market has changed to the point where online is threatening physical retail. This is may pose an obstacle to legacy systems and infrastructures, but can be seen as an opportunity for omni-channel development using item connectivity and intelligence with RFID.