Opportunities and winners when using RFID on FMCG

Feb 10, 2020

How will we shop everyday items, so called fast-moving consumer goods (FMCG), in the future? What influence do global trends and changing consumer behavior have? What expectations do consumers have of manufacturers and retailers? Which opportunities arise from the use of new technology within the retail chain?

Global trends and changing consumer behavior

Growing, densely populated metropolitan areas cause a shortage of retail space, high rent, low storage capacities and, thus, major challenges for logistics. The rural flight make more and more areas unattractive for retailers. Ageing societies and declining birth rates result in a shortage of skilled workers and rising wages.

Consumer behavior has changed, too. Due to online shopping experiences, consumers demand comprehensive product information, access to independent ratings, quick price comparisons and individual preference-based recommendations. They want to touch and test products, best 24/7. And, with regard to FMCG, there is one thing they want by no means: to wait in queues.

Chances and preconditions of using RFID in retail

An option for FMCG is the unmanned store. Ideas cover different solutions: smart fridges for offices, scalable cabinets or all-in-one unmanned stores concepts. They all want to automate, fasten and improve the purchasing process: from shop access, shopping experience, checkout and payment to theft and inventory control as well as automated re-ordering.

Therefore, all goods need to be automatically and contactlessly identifiable, for example via RFID tags, which must meet high requirements. Frozen or liquid products, particularly small or particularly thin formats require resistant, format flexible tags. However, the use of standards would enable an acceptable ROI and make tag logistics manageable.

What’s in it for other participants in the retail chain?

In addition to retailers, other participants in the retail chain also benefit from the use of RFID (source NXP).
The consumer can build up trust through a transparent proof of origin and short-term certainty whether the product is affected in case of a recall or not. And it combines the advantages of e-commerce with those of real-life shopping: 24/7 accessibility, transparency and faster completion of the purchasing process.
Manufacturers can optimize organization, monitoring and documentation of production, track products all the way to the consumer and develop new products and services based on an ever-growing database.
RFID allows wholesalers to manage their inventory in real-time and conduct targeted recalls.
Logistics companies can seamlessly document compliance with critical delivery conditions, enable real-time shipment status information and avoid time-consuming manual steps.

The use of RFID technology, however, is not only worthwhile for FMCG. Luxury goods, pharmaceuticals, textiles and state-controlled products such as cigarettes and liquor also benefit in many different ways. Secure, fast traceability of products, anti-counterfeiting and comprehensive proof of origin are just some of the applications.

Integrating latest RFID technology into global supply chain structures

Now that the cost of RFID tags has reached affordable levels, the next challenge is to link it to the flow of information in the supply chain. Combined with blockchain technology, RFID is an excellent tool to realize the promises of the Internet of Things (IoT). The benefits are a higher level of data accuracy, traceability, authentication and anti-counterfeiting, shrinkage control, and even transactions in smart contracts can be triggered.

In RFID tags, many application-specific developments have been launched lately, including special tags for cold chain applications, on-metal devices and other innovations. While RFID tags must become a commodity, quality and reliability must not be neglected. Using RFID converting systems from BW Papersystems ensures repeatable RFID performance parameters and best-in-class tag quality. If 100 percent yield is required, the Qualifier from BW Papersystems is the solution for RFID Smart Labels. Various levels of testing, fully automatic replacement of defective units and output checking are possible at full machine speed to keep productivity levels up.

Find out more about BW Papersystems’ solutions here.

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