By George Anderson
The only thing standing in the way of widespread adoption of radio frequency identification (RFID) technology in the clothing industry is the cost of tags, according to Wilfried Kanzok of Metro Group's Kaufhof Warenhaus business.
Mr. Kanzok said that his company's test of RFID at two of its Gerry Webber women's clothing stores over the past two years has found that the technology improves the speed and accuracy on the receiving end while making it significantly better at maintaining and tracking stock.
On the supply chain side, Mr. Kanzok said the company is now able to log in goods without having to open boxes to confirm contents. The result is products are moving through distribution centers and to stores at a much more rapid rate. The company has achieved tag rates of up to 160 per second and hopes to eventually improve to 500 tags.
One of the biggest issues facing the company on the sales floor has been having the right merchandise on shelf. A study in Germany, said Mr. Kanzok, found that 15 to 20 percent of clothing sales are lost because the right size is not available to consumers when they are ready to buy.
According to a report on the RFID Journal web site, cost remains the major stumbling block for Kaufhof Warenhaus and others in the clothing retail business.
"We are selling 70 million textile items per year," said Mr. Kanzok. "At 20 cents per tag, it will cost us an additional $14 million to tag every item, so we need to find $14 million in savings or additional sales to justify the cost."
Mr. Kanzok believes that the cost per tag will need to fall to 10 cents before retailers jump on the RFID bandwagon.
Moderator's Comment: What sector(s) of retailing do you expect will make use of RFID on a widespread basis first? Why? Are there other impediments to widespread adoption of RFID in addition to tag cost? - George Anderson - Moderator