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At Uniqlo’s store on Fifth Avenue in New York, shoppers can now enjoy a simplified checkout process. Instead of scanning each item or searching for prices, customers can effortlessly drop their purchases into automated stations. This innovative system relies on radio frequency identification (RFID) technology. Hidden RFID chips embedded in price tags are automatically read by the checkout machines, eliminating the need for manual scanning.
Takahiro Tambara, the chief information officer of Uniqlo’s parent company, Fast Retailing, initiated this transformative approach to shopping a few years ago. The goal was not just to automate checkout but to revolutionize the entire supply chain. In 2017, Fast Retailing brands, including Uniqlo, Theory, and Helmut Lang, started using RFID chips in their price tags. This implementation allowed the retailer to track items from production to warehousing and throughout the stores. This data proved invaluable in enhancing inventory accuracy, adjusting production based on demand, and gaining more supply chain visibility.
Thanks to advancements in RFID technology, such as cheaper chips, improved reader hardware, and software, retailers like Uniqlo can now adopt this technology at a lower cost and with greater precision. The cost of RFID tags has significantly decreased from several decades ago, from around 60 cents per tag to about 4 cents per tag. Moreover, the range and accuracy of reader hardware have improved.
Uniqlo has observed significant benefits from RFID implementation, including a notable reduction in out-of-stock items on the sales floor and improved customer satisfaction. However, the company has not disclosed specific details about the business impact of the technology.
Fast Retailing began testing RFID technology in 2013 and started rolling out RFID-enabled self-checkout machines in selected stores in 2019. The company has made substantial investments in information technology since 2016 to become a digitally enabled apparel retailer. While RFID is commonly used for inventory management, more apparel retailers are now exploring its application in self-checkout systems. According to retail consultants, many apparel brands plan to include RFID implementation in their agendas for 2023 or 2024.
Uniqlo’s RFID-based checkout system offers unique advantages compared to barcode-based self-checkout machines. It is faster, more accurate, and provides richer data. While Fast Retailing is one of the few apparel retailers to implement RFID for self-checkout on a large scale, this highlights the challenges retailers must overcome before a major rollout. Uniqlo’s self-checkout machines are available in all its U.S. and Canadian stores, as well as in most of the markets where it operates. Traditional cashier checkout options are also available.
Since the introduction of RFID-enabled machines, Fast Retailing has reported a 50% reduction in customer wait times at checkout. The company integrates RFID readers and antennas into its point-of-sale systems, and the tracking of items ceases once they are purchased.
While advanced technologies like generative artificial intelligence and chatbots garner attention, experts in the retail industry emphasize the practicality of simpler technologies like RFID. RFID remains the most feasible and widely used technology for merchandise tracking. Computer vision, a form of artificial intelligence that analyzes images, is still too expensive for widespread use in self-checkout and inventory management.
Uniqlo’s RFID-based checkout system offers unique advantages compared to barcode-based self-checkout machines. It is faster, more accurate, and provides richer data. While Fast Retailing is one of the few apparel retailers to implement RFID for self-checkout on a large scale, this highlights the challenges retailers must overcome before a major rollout. Uniqlo’s self-checkout machines are available in all its U.S. and Canadian stores, as well as in most of the markets where it operates. Traditional cashier checkout options are also available.
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