As radio frequency identification (RFID) and related technologies continue trickling down to the item level, retailers must learn how to cope with and exploit an avalanche of new data streams.
RFID technology gives retailers insight into product price, location, sales, origination sources, and other potentially useful types of information. As RFID tag costs fall and the technology gradually winds its way downstream, data can be woven into marketing plans, store analyses, loss prevention strategies, and various other studies.
The challenge
Though RFID systems generate lots of data, the information is well structured, generally making it a snap to isolate and analyze relevant content. Yet in the years ahead, RFID information will have to be analyzed within the context of a variety of other data types, such as Near Field Communication (NFC) and different kinds of social media. This kind of deep integration, though challenging to aggregate and utilize, will give retailers an even richer data foundation for their analyses.
Consider, for example, RFID coat hangers, which are already appearing in some retail outlets.
A customer picks up an RFID hanger holding a blouse and examines the garment while viewing relevant product data displayed on a nearby panel. The customer enters a fitting room and tries on the garment. An RFID reader records this action. The customer then decides to buy the blouse, leaves the fitting room (an action duly noted by the RFID reader), and completes the purchase via NFC on her smartphone. As she completes her purchase, she takes advantage of the store's offer to post a photo and description of the purchase on her Facebook wall.
This single transaction creates five different data records:
Picking up the hanger
Entering the fitting room
Leaving the fitting room
Purchasing the blouse
Making the Facebook post
This amount of detailed information can be as valuable to a storefront retailer as the data that's mined online from Website clicks and searches. Big data generated by RFID and related systems will allow retail chains to scrutinize customer shopping habits, store performance, security loopholes, and a variety of other important factors. This wealth of information will also enable store managers to change product assortments and displays quickly to reflect fickle shoppers' changing tastes and habits.
The payoff
There's enormous potential for big data applications that can mine and aggregate information from different silos to improve retailer supply chain efficiencies, enhance the shopping experience, cut losses, and ultimately boost profits. One key factor in the success and usability of RFID big data will be the development of an Internet of Things specification that will provide a means for tracking objects, such as blouses and other retail items, across different hardware platforms and software systems.
MDMConsult,
User Rank: Exabyte Executive 11/30/2012 | 7:23:30 PM
Re: RFID: more than just the supply chain. Yes, it gives brick and mortar more motivation to move faster to POS. The fluctuation in cycles leave vacancy to taking further advantage to privacy and security issues when exposed. Loss intelligence is critical to RFID.
smkinoshita,
User Rank: Exabyte Executive 11/27/2012 | 10:25:47 PM
Re: RFID: more than just the supply chain. I agree Saul -- it does give brick and motar a chance at the kind of rich analytics usually only available to websites.
My immediate thought is that it should also help a lot in reducing theft. I just wonder if the retailers will have to state that they're using RFID's for privacy regulations. Organizations like the EU can get pretty prickly about that sort of thing.
Re: RFID Data Avalanche Story of my life ... way ahead of the curve, maybe too way ahead! In 2005 and 2006 I was in due diligence with a local Angel group about RFIDDataMiner.com and they saw the potential. But the timing was bad for an investment in "Big Data" when Big Data didn't exist yet. This was a time when hardware and software standards surrounding RFID were just being formulated, so the manufacturers I was talking to were still struggling to retrofit their supply chain to embrace this valuable technology. I think now is a much better time for my idea and I have been resurrecting it as of late.
alvb1227,
User Rank: Petabyte Pathfinder 11/27/2012 | 11:54:44 AM
Re: RFID: more than just the supply chain. This is certainly an intertesting hypothesis to consider and that type of information on the "moment of truth" for a consumer would definitely be something retailers would like to know. Again, taking that idea further - what other items are picked up after the blouse decision - could be equally, if not more, interesting from a data collection standpoint. The consumer takes that blouse over and picks out matching slacks, for example, could those RFID chips "recognize" each other (for lack of a better term) somehow as a match? I'm thinking back to my youth (and yes showing my age) of matching the Garanimals tags. I wonder if that concept could be utilized in the RFID world to better understand the buying habits of the consumer?
Saul Sherry,
User Rank: Blogger 11/27/2012 | 5:58:52 AM
Re: RFID Data Avalanche @Daniel, you were WAY ahead of the curve! What was the reaction to the proposal like at the time? Were people excited but unable to use it or did the concept go right over their heads?
RFID Data Avalanche Excellent topic! RFID is a technology that has definitely seen a lag in general acceptance since its inception due to new infrastructure costs as well as the cost of the tags themselves as indicated in the article. Contemporary RFID technology has made this supply chain solution a reality and "Big Data" is staged to control the data avalanche that the technology will produce.
Back in Feb. 2005 my firm launched an early entry into what we called an "Analytics-as-a-Service" solution called RFIDDataMiner.com that was poised to take advantage of this new market. Alas, we were way too early and one reason was that the area we call Data Science today had not yet matured. Today, machine learning technology is set to provide supervised and unsupervised knowledge for RFID adopter companies. It is heartening to finally see RFID take its rightful place as a technology solution long overdue.
Mfredo,
User Rank: Bit Player 11/26/2012 | 4:45:05 PM
Re: RFID: more than just the supply chain. This is a great read. I wonder who is currently using a system like this. Amazing how much data is being pulled in todays markets.
Saul Sherry,
User Rank: Blogger 11/26/2012 | 4:31:14 PM
Re: RFID: more than just the supply chain. @legalcio What it can enable shops to carry out is analytics on the bricks and mortar establishment, much like you would have on a website, charting a user's experience and what leads to a converstion... multiply that by x number of customers across x number of stores in multiple territories, and bricks and mortar get a digital tool of their own.
legalcio,
User Rank: Exabyte Executive 11/26/2012 | 2:19:47 PM
RFID: more than just the supply chain. RFID traditionally is thought of as a tool in supply chain and inventory management. Adding social media tracking and nearby purchase items make it more of a marketing tool, but I'm not so sure that helps with inventory management. Based on customer purchase and behavior do retailers expand inventory? That could be expensive if the predicted behavior doesn't pan out.
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