RFID Ready to Take Center Stage
Despite showing a lot of initial promise, radio frequency identification (RFID) has not quite caught on in the way that some might have hoped. While it has been successful in some retail operations, it has also had some high-profile failures. Now, however, it looks like RFID is finally ready for prime time.
RFID gives retailers the ability to track merchandise as it makes its way from the warehouse through the retail supply chain to the store floor. Now it is poised to help bring inventory management to unprecedented levels of accuracy.
One big factor in the renewed interest in the technology is the fact that its price has dropped significantly over the years. In 2003, an RFID tag cost around $1; now it costs just 10 cents.
RFID Success Story at Macy’s
At Macy’s, RFID has progressed beyond the project stage to become a standard part of the way they conduct business. Last year, they decided to extend its use to track each item in all their stores and fulfillment centers, setting a goal of full implementation by 2018.
Macy’s Senior Vice President of Transportation, Store Operations and Process Improvement, Bill Connell said they have already noted a sizeable impact on their sales and profitability in several categories thanks to the technology, and they are halfway to reaching their goal of tagging everything. He identified a reduction in out-of-stocks and an increase in item availability as two ways in which the better inventory accuracy brought about by RFID has helped them. He says both factors can lead to notable sales increases.
According to Melanie Nuce of GS1 US1, Macy’s sales volume increased by more than 200 percent after they expanded RFID to their fashion departments.
The RFID Lab at Auburn University says that the technology can improve inventory accuracy significantly, bringing it from an average of 63 percent to 95 percent. It can also reduce out-of-stocks in retail by half. As more retailers learn about the incredible potential for return on investment, the use of this technology is only expected to grow.
This blog post was based off of an article from Forbes #ShopTalk. View the original here.