Retail IoT: Impinj Technology Drives the Economics and Systems for Connected Retail

By Shrey Fadia April 10, 2019

Retail has for years been one of the most active vertical industries experimenting with sensors of all kinds to drive greater efficiency and creativity in physical retail stores, delivering a digital experience to customers and valuable data to retailers and their suppliers. The journey hasn’t always been easy, but the journey has been necessary, driven by challengers like Amazon and other online retailers who have been attracting consumers to “clicks” vs. “bricks” shopping.

Last month, Impinj, a publicly-traded company and a pioneer of RAIN RFID solutions, introduced new endpoint IC technology innovations that enable connectivity to everyday items in the retail, grocery, consumer packaged goods, and logistics markets. According to Impinj, their new technologies use an advanced semiconductor process node and “paint the future of RAIN RFID by endowing Impinj endpoint ICs with differentiated features and enhanced performance, enabling these and other emerging markets in the coming months and years.”

RAIN RFID is a wireless communication technology that uses radio waves to connect everyday items to the Internet, enabling businesses and consumers to identify, locate, authenticate, and engage each item. The word RAIN, an acronym derived from “RAdio frequency IdentificatioN”, leverages links between UHF (Ultra-High Frequency) RFID and the cloud, where RFID-based data can be stored, managed and shared via the Internet.

A RAIN RFID system uses a reader to read and write a tagged item, manage the data and take action.

As the IoT and IIoT worlds move closer to the edge, with more compute at the edge, Impinj innovations will improve readability and add new features and functionality that  increases the distance, reliability, and speed at which a RAIN RFID system can inventory, locate, and engage items, enabling use cases like item authentication, loss prevention, frictionless point-of-sale, and shipment verification, while importantly allowing Impinj’s inlay partners to design smaller, high-performing, truly global RAIN RFID tags.

“Our endpoint IC technology innovations leverage both Moore’s Law and other leading-edge semiconductor advancements, improving IC performance and increasing functionality now and in the future,” said Impinj CEO Chris Diorio. “We will make smarter tag chips that address key use cases like item authentication, loss prevention, and frictionless point-of-sale. And each new IC we introduce will continue to extend the benefits and capabilities of the Impinj platform.”

Given the opportunities this new endpoint IC technology opens up, with miniaturization that delivers two times more chips per silicon wafer (the new series are so small that roughly 30 million chips will fit in a single coffee cup), we posed questions about the applications to Diorio, who, in addition to being CEO, is the Vice Chair and Co-Founder of the Nasdaq-listed company.

How does RFID make inventory tracking and optimization economically feasible; has this held back solutions in the past?

Today retailers around the world are attaching RAIN RFID tags to the products they sell, to monitor inventory levels and ensure stock is available. The tags don’t require a power source and are inexpensive, costing just pennies apiece. RAIN RFID brings accuracy and visibility to the single most important part of a retailer’s business: inventory.

With accurate and timely inventory data, retailers can allow store inventory to be viewed by online shoppers and con?dently sell down to the last item, increasing sales. Accurate inventory data can minimize process steps, eliminate searching, and avoid confusion – allowing staff to focus on customers, while also providing on-shelf availability so customers can find what they’re looking for.

Taking inventory with a RAIN RFID handheld reader is 25x faster than with a barcode reader. As an industry average, retailers who adopt RAIN RFID see:

·        25% increase in inventory accuracy

·        60% improvement in profit margin

·        11% increase in customer satisfaction

·        33% decrease in shrinkage

With RAIN RFID, retailers are able to monitor inventory, enable omnichannel fulfillment, verify shipment accuracy, automate order fulfillment, and delight shoppers with in-store experiences like smart fitting rooms.

RAIN RFID’s unique capabilities – which include unique identifiers for individual items, battery-free operation, long range readability without requiring line-of-sight, 1000 reads per second, designed to have essentially unlimited life, and available cryptographic item authentication – position RAIN to be the leading item-to-cloud connectivity technology for the IoT.

Are new business models emerging to support connected retail solutions; for example, will retailers charge for data they can share with distributors and brands on inventory levels, sales trends, etc.?

Depending on who you talk to, retail has many possible future states. RAIN RFID delivers valuable data that some retailers share openly with their partners to improve sales and operational efficiencies.

What we know is that competition will continue to grow, as will customer expectations. Retailers will need to digitally transform to survive. Future state changes we see in retail include:

·        Real estate rationalization:

How retailers use square footage is changing, from Nordstrom opening stores without merchandise to buy, to using stores as mini distribution centers or mini-fulfillment centers. Online retailers like Warby Parker are taking their brand to stores and pop-up shops. Kohl’s is partnering with Amazon as a returns center. Retail space is becoming more flexible and creative. Retailers thinking outside of the box will continue to win. And all of this centers on having accurate and visible inventory. Retailers need to know what they have and where it is. They need to efficiently connect demand with supply, regardless of where the inventory or shopper is. The only technology that can efficiently do that is RAIN RFID.

·        Frictionless checkout:

Many Asian countries are seeing labor shortages which are driving an unmanned store model – specifically in convenience stores. RAIN RFID allows for accurate and fast self-checkout, preventing the errors and theft that barcodes or even cameras can allow.

·        Endless aisle:

By using RAIN RFID to deliver engaging and interactive displays and accurate inventory visibility, retailers can ensure shoppers are not limited by the products that are in that store.

·        Operations improvements:

Staffing efficiency, loss prevention, merchandising conversion, and especially replenishment can all be improved with RAIN RFID enabled inventory. 

What does "advanced semiconductor process node" mean and how is it different from other legacy RFID solutions?

RAIN RFID tags include an integrated circuit (sometimes called an IC or chip) that allows the tag to uniquely identify an item and communicate with RAIN RFID connectivity devices. Advanced semiconductor process node refers to the chip’s manufacturing process. Generally, advanced process nodes enable smaller, faster, and more power-efficient chips with increased features and functionality.

How exactly can a single unit of a product be identified and tracked ("serialized") from leaving the point of manufacturing to ending up in a consumer's home? Do your solutions stop at POS?

Once an item is RAIN-enabled, the opportunities to enable business and consumer benefits are limitless. At its core, how it works is quite simple:

1)    Attach RAIN RFID tags to items, boxes, and packages.

2)    Use RAIN RFID readers and gateways (handheld, overhead, or on walls) to wirelessly identify and locate tagged items in the store (in the front of store, back of store, fitting rooms, point of sale, etc.)  and throughout the supply chain (including at factories, warehouses, and distribution centers).

3)    See accurate, real-time data about inventory across stores and distribution centers in enterprise retail systems.

Today most use cases end at the point of sale, as the tag is often removed from the item. But there are opportunities to use RAIN RFID for loss prevention, brand protection, and returns-management.

What do the new chips in the Impinj M700 series cost? We're assuming "silicon economics" - thus the more an OEM, retailer, managed service provider etc. buy, the lower the cost for bulk orders. Who is actually paying for the chips, subscriptions to data and services?

Just as computer chips have gotten smaller and faster, with lower power requirements over time, Impinj is migrating its RAIN RFID chips down that same path. We haven’t announced the availability of new chips yet, so we do not have pricing to share. But like any technology, over time RAIN RFID is not only getting better but cheaper as well.

We are at a tipping point where the investment for a retailer is not only achievable, but the ROI is faster than expected. Having accuracy and visibility across inventory pays for itself in an omnichannel world, and soon to be “channel-less” world. Tag prices have come down to between 5 and 10 cents. Often retailers ask their suppliers to apply tags at the point of manufacturer so brand owners are incurring the cost of the tags. Retailers purchase the necessary hardware and software for the solution they are deploying.

The Impinj M700 series of endpoint ICs enhances the Impinj platform, comprising RAIN RFID endpoints, connectivity, and software. Organizations around the world use the Impinj platform to connect items to applications, enabling the Internet of Things. Impinj endpoint ICs have already enabled connectivity for more than 30 billion everyday items—including retail apparel, airline luggage, manufacturing equipment and logistics items—allowing businesses to make smarter decisions, improve customer experience, and drive sales.

 “The IoT platform we created and the ubiquitous item connectivity we envision form the bedrock of an epic opportunity—to expand the Internet's reach to trillions of everyday items and deliver data and services for those connected items, profoundly enhancing business efficiencies and improving peoples' lives,” said Diorio.

Edited by Ken Briodagh
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