With the end-of-the-year season around the corner, retailers are gearing up to handle an increase in customer traffic and sales. However, they also need to be prepared for a potential rise in retail shrink – the loss of inventory due to theft, fraud, or administrative errors.
To combat this issue, retailers need to invest in technologies that can help them identify and prevent shrinkage.
Luckily, RFID technology has the potential to address how retailers track shrink from packaging to delivery and even at the point of sale.
So, where and why does AI come into play?
Let’s explore the synergies between RFID and AI in addressing retail shrink.
The Role of RFID in Retail Shrinkage
RFID, or Radio Frequency Identification, uses radio waves to capture data from tags attached to objects. These RFID tags contain unique identification codes that RFID readers can read.
With tracking and monitoring of the RFID tags, retailers can:
- scan individual product codes to manage inventory
- put up RFID readers at store entryways and exits to alert when a tagged product is leaving the store without purchase
- reduce administrative errors by automating stock counts and inventory management
- track merchandise in transit from supplier to store
- facilitate efficient checkouts by scanning multiple items at once
However, if a customer exits the store with an unpaid and tagged item, RFID cannot return the item.
This is where AI works with the RFID tag to address and give insights into how and why shrink occurs.
How RFID and AI Can Work Together
According to the RFID Journal, artificial intelligence (AI) and RFID are becoming co-dependent.
AI enhances RFID tags’ data, while RFID feeds AI with the data it needs to make decisions.
An AI-powered retail analytics solution, especially one with GenAI capabilities, can read through thousands of data. This includes RFID data stored in the tag’s unique identification code. This means that AI can read and analyse which items are being sold, returned, or stolen.
Through the analysis of this data, retailers can:
- monitor trends in shrinkage
- identify high-risk areas in their stores
- predict potential thefts before they happen
- optimise stock placement to reduce theft opportunities
AI can also help track patterns and anomalies in RFID data, such as sudden increases in shrinkage for a specific product or store location. This allows retailers to quickly address any issues and implement measures to prevent further losses.
Apart from data, AI can also be implemented in security cameras and POS systems to further enhance loss prevention efforts. Security cameras with AI capabilities can detect suspicious behaviour or unusual activities, while POS systems can flag potentially fraudulent transactions.
Overall, the combination of RFID and AI allows retailers to have a more comprehensive and proactive approach toward loss prevention.
Reduce Retail Shink Today!
With RFID tags and readers in place and AI technology to provide insights and analysis, you can reduce shrink immediately.
Don’t wait for losses to happen before taking action.
Contact us at Milestone today!
We’re RFID technology experts who can help you install RFID tags and readers throughout your whole store.
We do not offer AI solutions, but you’re welcome to browse the following companies’s AI solutions to further enhance your loss prevention efforts:
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