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RFID (Radio Frequency Identification) has already established its value in fashion retail, with numerous businesses making use of the technology that delivers improved product availability, inventory accuracy, and omnichannel capabilities. The global cosmetics industry is expected to increase at a 5.0% CAGR from $287.94 billion in 2021 to $415.29 billion in 2028. But with rapid growth and increased demand come new challenges. Products are typically small and determining which technology and item-level RFID inlay to use can be difficult for retailers, especially given that most products contain materials which may impair RFID performance.
Smart packaging and RFID-enabled technologies can help stores survive. Employing RFID to manage and monitor cosmetics resulted in 93-99% item-level inventory accuracy. It also aids with loss prevention for these difficult-to-tag products. The service bureau network can provide extensive printing and encoding solutions. A wide range of labelling and packaging solutions allows fragrance and cosmetics retailers to differentiate themselves through distinctive brand identification while retaining brand integrity and consistent quality.
Industry Challenges
Determining the technology and item-level RFID inlay to implement can be difficult for cosmetic and fragrance retailers, especially given that items are often small, yet have sizeable monetary values and theft rates. There is a direct relationship between tag size and read range in most RFID applications. This typically indicates that ‘the smaller the tag, the shorter the read range,’ and because cosmetics demand small tags, the tags will have a lower read range than the industry norm.
RFID tags placed on cosmetic products will most likely be read between 3 and 5 feet, depending on the type of tag, how the tag was applied, the environment, the RFID system setup, and the type of surface material and the product being tagged. Metallic objects and liquid substances near a reader or tags can have a major impact on the RFID read range. Metallic and liquid surfaces can create strong reflected signals. The reflected signal may alter the signal intensity. Deploying multiple RFID antennas may achieve spatial diversity and improve link reliability over an extended read range.
Benefits and Loss Prevention
Similar to retail, the advantages of using RFID to manage and track cosmetics and fragrances are demonstrated through increased accuracy through visibility. Accurate inventory data is critical for the supply chain and manufacturers to distribute the required stock to retailers. If inventory figures are inaccurate, placing replenishment orders can cause supply or demand swings, costing retailers hundreds of thousands of dollars. Inventory Data Management may be utilised to identify popular products in the marketplace, as well as changes in trends. With this knowledge, retailers may anticipate and plan for fluctuations in demand.
An RFID inventory management system assigns a globally unique number to each product, allowing for item-level visibility. This generates data that can be used to identify vulnerable areas where products are stolen so that further protection can be put in place. RFID creates a tight security blanket around the whole retail supply chain — from production to the client — by recording what happens to every item at every stage in the chain. RFID has an immediate impact on the bottom line by providing fragrance and cosmetic retailers transparency in relation to inventory. Store owners can see shrinkage as it occurs. This implies that businesses can react fast to the causes of stock losses, empowering them to replace, capture, rectify, and prosecute.
Smart Packaging Solutions
Using RFID to manage cosmetics and fragrance inventory has proved tricky in the past. This is owing to product size and the materials used in packaging design, which could have a detrimental impact on RFID technology. However, advances in RFID have resulted in smaller, more sensitive tags, as well as innovative packaging materials that allow companies and retailers to overcome earlier obstacles and effectively manage items on shelves and in cosmetics departments. These new technologies not only address interference from liquid and metal elements, but they can also be customised to suit packaging dimensions, performance, and brand requirements, providing cosmetic manufacturers with unprecedented visibility into inventory levels without sacrificing branding or package design. As a result, the cosmetic business will be able to reap the same RFID inventory management benefits as the apparel industry.
As more cosmetic and beauty brands begin to collect reliable data on their customers' purchases, those brands will be able to provide items tailored to their customers' individual wants and requirements. By streamlining the supply chain, retailers may save time and money by having accurate inventory visibility with smaller items. This also saves time for sales representatives, allowing them to focus on customer service. Ultimately, these developments contribute to the advancement of brand loyalty and customer confidence in cosmetic and fragrance retailers.
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