is what magic makes UNIQLO bet on RFID?

at New York's Uniqlo Fifth Avenue store, shoppers simply place the item in a box in a vending machine to check out. Unlike the self-checkout process in many stores, customers at this casual clothing retailer don't need to scan individual items or look up the price on a screen-they just put the item in the appropriate box and pay.

This new generation of autonomous checkout device is powered by the radio frequency identification reader in the cash register. The reader can automatically read hidden RFID chips embedded in the price tag. According to reports, these chips are among Asia's top clothing retailer Fast Retailing Co. CIO Takahiro Tambara strategy. Fast Retailing is the parent company of Uniqlo, headquartered in Japan. A few years ago, Tambara began to change the way customers shop in brick-and-mortar stores. Even as more and more business activities move online, physical stores are still the focus of the company's business model.

Tambara said that self-checkout machines are at the heart of Uniqlo's use of RFID to improve its supply chain. As early as 2017, all fast retail brands, including Theory and Helmut Lang, have begun embedding RFID chips in price tags, allowing retailers to track individual items from the factory to the warehouse to the inside of the store. The company also said that these data are essential for Uniqlo to improve inventory accuracy, adjust production to demand, and improve supply chain visualization.

Tambara also said: "We introduced RFID not because we wanted to automate the checkout process, but because we wanted to develop a platform to use it throughout the supply chain."

McKinsey & Co. (McKinsey & co.) said that the cost of RFID tags has dropped from 60 cents a few decades ago to 4 cents, and the range and accuracy of reader hardware have improved. Therefore, newer and cheaper RFID chips, reader hardware and software allow retailers such as Uniqlo to implement this technology at a lower cost and higher accuracy.

UNIQLO also stated that RFID technology has greatly reduced the phenomenon of out-of-stock in the sales workshop, while helping to "reduce the chance that customers cannot shop due to out-of-stock, thereby improving customer satisfaction". But the company declined to provide more specific information on the business impact of the technology.

Fast Retailing began testing the technology in 2013 and began rolling out RFID-enabled self-checkout in some stores in 2019. Mr Tambara declined to say how much Fast Retailing is spending on the technology, but said Fast Retailing doubled its investment in information technology in 2016. In 2016, Fast Retailing launched its strategy to become a digital clothing retailer and therefore developed its own e-commerce platform.

Although the most common use case of RFID is to improve inventory management, as more and more clothing retailers explore ways to apply the technology after the product is labeled, the use of RFID on self-service checkout is becoming more and more popular. Adhi said that for most clothing brands, the implementation of RFID "will be on the agenda in 2023 or 2024".

At the same time, he added, many retailers still rely on barcodes, which need to be scanned manually and carry limited data. But the unique advantage of an rfid-based checkout system like uniqlo is that it is faster and more accurate than a barcode-based self-service checkout machine. Fast Retailing is one of the few clothing retailers that have implemented RFID self-checkout on a large scale so far, which also highlights the problem that retailers need to overcome before launching RFID on a large scale-the long deployment effect cycle. Uniqlo revealed that 47 stores in the United States and 16 stores in Canada and 14 stores in 25 stores can use Uniqlo's cash registers.

Fast Retailing said that customer wait times at checkout have been cut by 50 per cent since the vending machines were introduced. The company has integrated RFID readers and antennas into its point-of-sale system and says it no longer tracks items after purchases.

However, many shoppers are still reluctant to use self-checkout because they get bored with hard-to-scan items and other problems with self-checkout. Among shoppers surveyed by Customer Experience Technology in Raydiant 2021, 36% of customers said they had greatly increased their use of self-checkout, while 67% said they had experienced some kind of malfunction on their machines. Retailers such as Uniqlo are therefore looking to allay consumer concerns by offering better technology.

ChatGPT has attracted worldwide attention in recent years, there is still much work that can be done through simpler technologies such as RFID. Sucharita Kodali, vice president and retail analyst at Forrester Research, said that even if RFID is not the most advanced technology, it is currently the most practical commodity tracking technology. Computer vision as artificial intelligence that can analyze images, but it is currently too expensive to be widely used for self-checkout and inventory management.

uniqlo's competitors, such as Inditex, the parent company of the spanish fast-fashion brand zara chain, have been putting rfid labels on their goods for 2014 and have been testing the technology for self-checkout. French sporting goods retailer Decathlon (Decathlon) said it began installing RFID on more self-checkout machines in 2014.

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