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Item-level RFID’s Role in Circular Fashion

By Dean Frew, CTO and SVP of RFID Solutions at SML Group Sustainability has emerged as a major concern in both the logistics and fashion sectors over recent years.

By Dean Frew, CTO and SVP of RFID Solutions at SML Group

Sustainability has emerged as a major concern in both the logistics and fashion sectors over recent years. While customers are becoming more conscious of the role they play in waste creation, especially in the case of fast fashion, businesses should also be proactive about offering more sustainable and ethical alternatives. In fact, one-third of customers have stopped buying from specific retailers owing to ethical and environmental concerns, highlighting the growing importance for retailers to move towards circular fashion.

The circular fashion economy is expanding, and fashion retailers must adapt their strategies and procedures to be desirable to ecologically conscious customers, without sacrificing profitability. This necessitates new solutions, and RFID technology is the answer for many retailers seeking to improve their sustainability practices. Item-Level RFID technology improves retailers’ operational efficiency and omnichannel offerings and sets the stage for making their supply chains more ecologically friendly due to improved inventory management.

RFID’s Influence on Visibility

When it comes to making fashion more sustainable, two factors are critical: data and traceability. Retailers cannot understand the environmental consequences of their supply chain unless they have end-to-end visibility. Furthermore, without data, brands cannot be transparent and cannot make changes to their supply chains to make them more sustainable. Not only can digitizing supply networks through RFID technology improve efficiency and transparency – all of which are vital for lowering total environmental effects, but it also provides retailers with detailed information about their supply chain network.

Another way for brands to increase sustainability is by using RFID tags to provide item-level traceability. Customers are able to access the data stored within the tag and access key information, such as where their products have been sourced from. More importantly, customers can be assured that it has been sourced sustainably.

Reduction of Waste Through RFID

With millions of products shipped to landfills each year, merchants must find a solution to the retail waste problem. RFID technology can help brands identify methods to reuse stock and minimize the raw materials needed to create items when utilized for sustainable fashion retail. Retailers are able to make stock modifications during the early manufacturing stage, reducing their material use.  The most significant impact RFID has on waste reduction is allowing retailers to identify their understated or excess inventory. The ability of a retailer to operate on leaner inventory models allows them to reduce operating costs while maintaining the same sales volume which is a win for both the retailer and the environment. This reduces clearance products while avoiding the additional labor expenditure required to markdown items and execute reverse logistics processes for items that did not sell.

With RFID technology in place, retailers are able to conduct stock counts regularly with an increased inventory accuracy between 93%-99%. This is critical for the sustainability of fashion retail since more effective inventory logistics implies less waste along the supply chain and in storefronts. By implementing RFID solutions for sustainable fashion, retailers can be confident that they are 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.

Circular Fashion is the Future

As retailers seek to improve their sustainability initiatives and move towards a circular economy, they must find innovative solutions to meet rising consumer expectations. 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.

Talk to us today to find out more about how our RFID experts can help your business improve sustainability initiatives. You can also download our EcoInspire Product Collection brochure.