Do retailers need RFID to do BOPIS right?

Radio frequency identification (RFID) enthusiasts have long touted the technology as the key to managing inventory accuracy — a need that's grown even more critical as omnichannel demands make stock harder to track. In a session at the Internet Retailer Conference and Expo (IRCE) last week, Mark Roberti, founder and editor of RFID Journal, suggested that RFID is the only way to do BOPIS right, stating that the technology’s time has finally arrived.

Mr. Roberti defined inventory accuracy as the retailer's understanding of what they have in stock, down to the level of a product's individual features. So, if a retailer has a record of having a small pair of pants in inventory, rather than the actual large pair in stock, accuracy is not achieved.

He said that retailers are only 65 percent inventory accurate at present and tend to overstate their accuracy by defining it less rigorously.

"No one who's not using RFID is 98 percent accurate in the way I describe at the SKU level," said Mr. Roberti. 

He pointed out some important advantages of having accurate inventory:

• Companies confident in accurate inventory don't need to hide in-store products from online customers for fear they won't be there when the customer arrives;
• At least 28 percent (possibly as much as 40 percent) of customers who go into a store to pick up an item make an additional purchase, so failing to have a promised item can lead to sales losses;
• Failing to have an item can lead to long-term customer loss by sending a would-be customer to another retailer;
• With accurate inventory, stores avoid losing items that they then later discover and sell at a discount;
• Inventory accuracy increases ship-from-store margins by cutting down on the time staff spends digging for items across stores and allowing retailers to ship multiple items together to save on shipping.

Mr. Roberti mentioned Macy's chain-wide rollout of RFID tracking, which has allowed the chain to inventory 7,000 items in one hour, in comparison to 200 to 500 items using barcodes.

Mr. Roberti also mentioned an earlier panel he appeared on with Macy's SVP of logistics systems Pam Sweeney. He said that in that panel discussion, Ms. Sweeney reported that Macy's is about 95 percent inventory accurate per SKU.