RFID Enabled Solutions For The Beauty Industry
August 2020 – Over the last several years, RFID (Radio Frequency Identification) usage in retailing has become more ubiquitous, thanks in large part to the falling prices of RFID labels and associated hardware to enable such a solution. Brands such as Levi’s, Uniqlo, and Decathlon have all been early adopters of the technology, enabling faster and more accurate inventory cycle counts, increased supply chain transparency and visibility, and seamless self-checkout.
Over the last several years, RFID (Radio Frequency Identification) usage in retailing has become more ubiquitous, thanks in large part to the falling prices of RFID labels and associated hardware to enable such a solution. Brands such as Levi’s, Uniqlo, and Decathlon have all been early adopters of the technology, enabling faster and more accurate inventory cycle counts, increased supply chain transparency and visibility, and seamless self-checkout.
A diagram of the RFID tracking journey
1. Grey Market Prevention
The definition of grey market is the sale of products through a channel not previously intended or approved by a brand. This phenomenon occurs when distributors siphon off a portion of products purchased from a brand and sell it off to a higher bidder in an unauthorized channel. You may have even seen cases in the news where brands are suing large retailers for selling grey market beauty products (3) (4).
Grey market channels present a problem for both brands and consumers alike. Brands lose control over their image through poor merchandising standards or even expired products remaining on the shelf. This leads to consumers losing trust in the brand and even facing potential health risks.
The only way to identify if your brand’s products are selling through a grey market, and hold your distributors accountable, is through RFID. Since each RFID label has a unique EPC (Electronic Product Code), brands can scan the label of a product found in an unauthorized channel and find which distributor was responsible for that product’s allocation. From that point, brands can take the necessary action against their distributor.
2.Wholesale Channel Visibility
It’s not unusual for brands to wait weeks, or even months, for inventory and sales data from wholesale channel partners; data which is critical to analyzing SKU performance and allocation needs. This is especially prevalent in travel retail, one of the fastest growing channels for Beauty.
By integrating fixed RFID antennas and readers into a point of sale display, brands can measure their display’s inventory and product sell-out in real-time. It’s even possible to check how often the display is replenished or audit visual merchandising compliance. All these events can be tracked without the need for additional beauty associate activity, accessed remotely through dashboards or reports.
In order to ensure stores have the inventory on hand to fulfill orders placed online, brands need to be sure their inventory accuracy is as close to 100% as possible (5). Performing a bi-annual inventory count does not provide the frequency required to adjust inventory in real-time, or when it’s needed. Using fixed readers or handheld scanners on RFIDs, staff can perform cycle counts in minutes, or less, compared to hours. This data can automatically sync to any ERP system, or be sent to inventory control for approval, before making the right inventory adjustments required for your omni-channel solution.
RFID x Beauty = Perfect Match
With so many proven RFID case studies and compelling reasons for introducing RFID to the Beauty industry, the time to get started is now. The only question remaining is, which brands and retailers will be the quickest to adopt this promising technology, paving the way for this industry in the same way those early adopters of RFID in apparel retail did?
Contact us to learn more about how RFID can help your brand.