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5 Ways RFID Technology is Used in the E-commerce Industry

  • Mahesh Tiwari
  • Jun 13, 2023
  • RFID
5 Ways RFID Technology is Used in the E-commerce Industry

At a time when retail businesses are strengthening their supply chain network and in-store operations, customer experience etc., the global e-commerce is looking at similar issues as well. Many e-commerce businesses are reinventing their supply chain and the ways they procure items and fulfill orders. 

The global e-commerce businesses saw an increase in business activity and demands in the year 2020 (an increase of 14% in comparison to the retail sector) and the covid19 pandemic was the big reason behind that. But now we are way past the coronavirus pandemic and with retail business picking up speed, customers visiting retail stores and hand picking things they like, the e-commerce business needs to step up their game. Retail giants like Wal-mart, Target, Zara and H&M are using modern age technologies like RFID (Radio Frequency Identification), and BLE (Bluetooth Low Energy) to eliminate the supply chain bottlenecks and enhance customer experience inside retail stores.

A Gartner survey highlights the fact that supply chain and order fulfillment are two of the pressing issues that need to be solved for a profitable retail business and e-commerce businesses also face the same issues when it comes to delivering ordered items on time.

Radio Frequency Identification  (RFID) is a wireless AIDC (Automatic Identification and Data Capture) technology that is capable of solving both these issues, the supply chain networks and order fulfillment. RFID technology employs a set of RFID tags, RFID readers and an RF subsystem (a computer or control panel) to transmit and receive data, identifying and tracking the desired object(s) in real time.  Whenever an RFID tagged item is in the range of an RFID reader, the RFID tag sends the encoded data to the RFID reader which is decoded for the end user and displayed on a screen via a computer.

RFID in E-commerce Industry

The e-commerce industry has witnessed significant growth in the past couple years. With the RFID implementation cost coming down in the past decade, UHF passive RFID tags now cost 4-5 cents than 40 cents a few years ago, it has become a cost effective and efficient tool for e-commerce and retail businesses to track supply boxes coming from suppliers and the delivery consignments as well.

There are several ways RFID technology is used in the e-commerce industry. Some of the primary uses of RFID is as follows:

1. E-commerce Inventory Management

Like retail businesses, e-commerce businesses also need to maintain inventory and avoid out of stock scenarios to give customers a positive shopping experience. Apart from that inventory management will also allow businesses to manage their stock levels accurately and RFID can help with that. RFID can be used to track inventory levels in real-time, making it easier for businesses to replenish out of stock items in a timely manner as well as enhance asset visibility inside the warehouse.

2. Speed Up the Fulfillment Process

Order fulfillment that includes timely delivery, tracking, alerts and notification and timely return of items has become the most important factor that differentiates between a successful e-commerce and a failed one as various surveys. RFID technology can be used to speed up the fulfillment process by reducing the time it takes to locate and retrieve items from a warehouse.

3. Theft Prevention

The RFID technology can also be used to prevent theft by alerting warehouse associates when an item is taken out of the warehouse without being properly logged into a system. Though RFID can not actually prevent organized retail crimes (ORC), it can provide you with a system to alert relevant authorities  whenever any item is stolen in-transit or otherwise.

Apart from that, RFID can also be used for improving the security at warehouses by implementing an RFID based access control system.

4. Supply Chain Management

A robust supply chain is what defines the e-commerce and retail business and how it fares with other players. Businesses can use RFID to track shipments, from suppliers and those out for delivery, and ensure that products are received/ delivered on time and to the correct destination.

 5. Customer Experience

 Customers nowadays need constant updates on their order and its status whether it is packed or dispatched or out for delivery. RFID technology can help you track each order in real time,allowing you to notify customers, enhancing the customer experience. RFID can also be used to provide a more personalized experience for customers by tracking their purchasing habits and preferences.

To conclude, RFID technology offers several benefits to the e-commerce industry and can help businesses to operate more efficiently and effectively. It can monitor incoming and outgoing consignments and help improve customer experience as well, driving business growth and improving customer loyalty.

Disclaimer: The information presented here is for general information purposes only and true to best of our understanding. Users are requested to use any information as per their own understanding and knowledge. Before using any of the information, please refer to our Privacy Policy and Terms and Conditions.

  • Created on Jun 13, 2023

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