Item-Level RFID’s Role in Circular Fashion

The fashion and logistics sectors have both become increasingly concerned with sustainability. According to Deloitte, almost one-third of consumers have stopped shopping at specific retailers due to ethical and environmental concerns. As such, retailers are now searching for ways to introduce greener processes. With customers becoming more aware of the role they play in the waste creation process — as well as the negative environmental impact of global supply chains — demonstrating a strong move towards circular fashion is critical for retailers.

As the circular fashion economy continues to grow, retailers must adapt their strategies and procedures to appeal to environmentally aware customers without compromising profitability. Many retailers seeking to improve their sustainability practices need new solutions, and RFID technology offers one. As a result of better inventory management and increased operational efficiency, RFID technology enhances retailers' omnichannel offerings and improves their operational efficiency.

Aspects of RFID's Impact on Visibility

To make fashion more sustainable, two factors are critical: data and traceability. Retailers can't understand the environment unless they have visibility into their supply chain from beginning to end. More importantly, without data, brands can't be transparent or sustainably change their supply chains. Not only can digitizing supply networks through RFID technology improve efficiency and transparency — which are vital for lowering total environmental effects — but it also provides retailers with detailed information about their supply chain network.

RFID tags can also be used to provide item-level traceability. Using the tag, customers can access data and learn more about their products, such as where they're sourced and the journeys they've been on. Additionally, the product will be sourced sustainably, so customers can be assured that it's of high quality.

Utilization of RFID Technology to Reduce Waste

Merchandisers must reduce the number of products shipped to landfills each year to solve the retail waste problem. For sustainable fashion retail, RFID technology can help brands find ways to reuse stock and reduce the amount of raw materials needed for item creation. During the early stages of production, retailers can modify stock, reducing their material consumption. With RFID, retailers can determine understated or excess inventory, which has the most significant impact on waste reduction. The environment benefits from retailers that operate based on leaner inventory models, as they can reduce operating costs without sacrificing sales volume. By doing so, clearance products are reduced while eliminating the need to mark down items and perform reverse logistics on items that didn't sell.

With RFID technology in place, retailers can conduct stock counts regularly with an increased inventory accuracy between 93 percent to 99 percent. This is critical for the sustainability of fashion retail since more effective inventory logistics implies less waste within the supply chain and in storefronts. By implementing RFID solutions for sustainable fashion, retailers can be confident that they're only procuring what they require, and they can swiftly adapt to customer trends, creating only what will likely sell. This reduces overstocking and improves transportation efficiency.

It's Time to Go Circular With Fashion 

Rising consumer expectations means retailers must find innovative solutions to meet their sustainability initiatives and move towards a circular economy. Item-level RFID technology is widely recognized for enhancing the customer experience and reducing in-store pressures. However, the technology can also be deployed to advance circular fashion. With enhanced traceability and inventory accuracy, retailers are able to effectively reduce waste, carbon emissions and improve their sustainability practices significantly. The ability of RFID to help enable circularity opens up additional sales cycles for products and additional revenue streams that capitalize on existing products.

Overall, the benefits of RFID technology in the fashion industry are clear. By providing greater visibility into the supply chain, improving inventory management, and enhancing the customer experience, RFID technology can help retailers improve their sustainability practices and reduce waste.

Dean Frew is the chief technology officer and senior vice president of RFID Solutions at SML Group, an RFID solutions provider.