How to Achieve Sustainability in Retail with AIDC

How to Achieve Sustainability in Retail with AIDC
Retail

Since coming into effect on July 25, 2024, EU’s Corporate Sustainability Due Diligence Directive (CSDDD) requires retailers to demonstrate clear and measurable sustainability outcomes. Retailers today face increasing pressures from regulators, investors, and consumers to visibly commit to sustainability. Despite this, many retailers are struggling to translate their ambitions into tangible, credible results across both their stores and distribution centers.

Common obstacles for retailers include limited product traceability, fragmented supply-chain data, and low recycling rates. By adopting Automatic Identification and Data Capture (AIDC) technology, retailers can overcome these challenges and establish a credible foundation for their ESG claims.

Moreover, sustainability delivers concrete business benefits: recent research indicates that products marketed with clear environmental, social, and governance (ESG) claims have experienced sales growth of approximately 28%.1 Additionally, brands with well-defined ESG commitments have higher repeat purchase rates (32%—34%) compared to those without.2

Three Strategies for Realizing Sustainable Retail with AIDC

  1. Track Products Seamlessly Throughout Their Lifecycle
    Retailers can improve lifecycle traceability using technologies like GS1 Digital Link and RFID to enable Digital Product Passports. These tools lay the foundation for new resale and reuse. For example, Coach’s (Re)Loved program—though built on a proprietary system— has achieved strong circularity outcomes.3 To meet the EU’s Ecodesign for Sustainable Products Regulation (ESPR) requirement, however, retailers will need to align with emerging DPP standards from GS1 and the RAIN Alliance.
  2. Reduce Waste Through Accurate Forecasting
    Real-time inventory and sales data enable retailers to accurately predict demand, thus preventing overstocking and stockouts. British retailer John Lewis improved their inventory accuracy from around 60% to over 90% by implementing RFID technology, significantly reducing operational disruptions and waste.4
  3. Enhance Circular Economy Efficiency via RFID
    Automating returns management through RFID technology streamlines sorting, evaluating, and redirecting products. The American department store Macy’s successfully piloted RFID-tagged packaging in 2022 to track recycling participation, aiming for an 80% rate by 2025.5 Clear tracking ensures products efficiently move toward reuse, resale, or recycling.

Start Your Journey Toward Sustainability

Achieving measurable sustainability in retail starts with focused, actionable steps. Begin by launching small-scale pilot projects that use AIDC technologies—such as 2D barcodes or RFID— to capture precise product and supply chain data. These pilots will generate the insights needed to scale best practices across stores and distribution centers.

To ensure long-term success, follow global standards—such as those from GS1, AIM, and the RAIN Alliance. Reliable readability of printed barcodes and RFID labels will ensure smooth operations across the product journey. Choose enterprise mobile computers that support both GS1 barcodes and RAIN Alliance EPC Gen2 UHF RFID to unfailingly capture data across diverse environments.

Finally, partner with experts who understand both the technology and regulatory landscape. TSC Auto ID helps retailers embed compliant, future-ready solutions into daily operations—turning ESG goals into tangible business benefits.

 

1 NielsenIQ, Consumers care about sustainability—and back it up with their wallets, 2023, https://nielseniq.com/global/en/insights/report/2023/consumers-care-about-sustainability-and-back-it-up-with-their-wallets/

2 McKinsey & Company and NielsenIQ, Consumers care about sustainability—and back it up with their wallets, 2023, https://www.mckinsey.com/capabilities/sustainability/our-insights/consumers-care-about-sustainability-and-back-it-up-with-their-wallets

3 Vogue Business, Coach enables instant resale via Poshmark, 2024, https://www.voguebusiness.com/story/technology/coach-enables-instant-resale-via-poshmark

4 PwC Australia, You can’t be ‘omnichannel’ until inventory is solved, n.d., https://www.pwc.com.au/digitalpulse/rfid-inventory-omnichannel.html

5 Macy, Macy’s, Inc. announces sustainable initiatives to drive a more circular future, September 19, 2022, https://www.macysinc.com/newsroom/news/news-details/2022/Macys-Inc.-Announces-Sustainable-Initiatives-to-Drive-a-More-Circular-Future-09-19-2022/default.aspx