During these difficult times, customers are heavily relying on E-Commerce firms for their local shopping needs. In fact, according to a recent marketing survey, over 70 percent of people shop online at least once a month. However, as technology advances so do various frauds that pose a threat to safety and security of online shopping transactions. And once such market threat is the ever-growing presence of counterfeit products or knockoffs.
Over the past couple of years, counterfeit products have become a significantly rising issue in various sectors such as retail, healthcare and fashion. The inferior quality of such products negatively affects the brand image of a company, and thus retailers all across the globe are increasingly investing in technologies to prevent counterfeits. Radio frequency identification or RFID tagging is a process that has been gaining immense popularity against product counterfeiting. RFID tags are highly advanced and robust against severe weather conditions. Customers can utilize a Smartphone app for scanning these tags and verifying the authenticity of such products.
Each RFID tag consists of a unique and encrypted code and can be read out of sight. Moreover, with the new and improved RFID devices, retailers can scan multiple tags within a short span of time. This technological advancement is cost-efficient and plays a crucial role in providing a more transparent view of supply chain management. As a result, the RFID tags market is expected to be worth around $29 billion by the year 2023.
Negative Impact of Counterfeit Products
According to market research, more than 40 percent of the customers have received fake or knockoff products at least once. This growing problem has negatively affected customer confidence and thus, reduced overall brand loyalty rates. RFID tags enable firms to track and manage products in real-time. Store owners can utilize RFID scanners to gather, manage and store inventory data with ease. RFID technology automatically updates product location and other valuable information in real-time in the company’s database. This has further strengthened the position of RFID-based solutions within the industry. As a result, the RFID market is expected to be worth more than $40 billion by the end of the year 2025.
According to a recent market survey, businesses worldwide lose more than 30 percent in sales due to counterfeit products. In addition, it also prevents retailers from gaining accurate and reliable customer insights regarding a product purchase, frequency of use and popularity amongst the target audience. As a result, store owners lack up to date and relevant information regarding industry trends and customer shopping preferences. Industry experts predict that the data and monetary loss caused due to such factors is exponentially high and will continue to grow without the presence of advancements such as RFID.
Rise of New Technological Advancements
Nowadays, as technology advances, people gain access to new and improved techniques to counterfeit products such as 3D printing. These methods have made it even more challenging to check the authenticity of products, and thus, customer satisfaction rates are at an all-time low. RFID tags allow organizations to track product movement from place of production to place of consumption. Furthermore, it also prevents customers from receiving unsatisfactory and harmful products.
RFID technology has made it easier and more convenient to manage stock and prevent lost sales opportunities. Moreover, it also protects products from being misplaced or tampered with. As a result, businesses can reduce overall product returns by 30 percent and improve customer retention and brand advocacy rates.
Tackling the Ever-growing Presence of Online Threats
Despite the various benefits to RFID tags, many retailers are still skeptical about the technology. A crucial reason for this choice is the presence of online frauds and data security and privacy issues. These factors have played a vital role in preventing overall business growth and RFID adoption. However, with the help of highly developed cybersecurity measures, retailers can introduce appropriate security protocols to avoid instances such as loss of valuable data or cloning of RFID tags.
RFID scanners enable firms to enhance inventory visibility and make it simpler for retailers to fulfill demands and promote repeat purchases. Furthermore, they also assist companies to allocate their resources more effectively and efficiently. Therefore, retailers can eliminate bottlenecks and reduce the overall costs incurred by the firm.
The benefits that store owners receive from RFID technology are endless. From streamlining the process of inventory management to preventing the growth of counterfeit products, RFID is gaining immense popularity. As a result, over 45 percent of businesses will increase investments in RFID technology in the upcoming years. This technological advancement also provides firms with a quicker and easier way to reduce product returns and gain an advantage against market competition.
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Written By: Ranjeewa Dias
Business Technology Manager