The radio frequency identification (RFID) bandwagon appears to be filling up quickly. Several reports and press releases hit this week expounding on the wonderfulness of item-level RFID and the number of merchants that are seeing marked improvement in inventory management and sales as a result of the technology.
According to research done by the University of Arkansas,
RFID has:
- improved inventory accuracy rates from an average of 62 percent to more than 95 percent;
- increased the number of items that can be counted in an hour from 200 to 5,000;
- reduced out-of-stocks by as much as 50 percent.
"For perhaps the first time in retail history, retailers can fulfill the promise of getting the right product to the right store at the right time for their customers," said Professor Bill Hardgrave, founder of the RFID Research Center at the University of Arkansas and dean of Auburn University's College of Business, in a statement. "This is thanks to standardized RFID technology and the high level of inventory accuracy it brings."
A report by Stores magazine cited a number of examples of RFID helping to improve performance. A test at Dillard's achieved an improvement in inventory accuracy of 17 percent while time savings was pegged at 96 percent. American Apparel, which tags all merchandise in its stores, reports 99 percent accuracy in inventory and a jump of 14 percent in sales.
"Skeptics have tried for years to dismiss RFID projects as too expensive or too complex, but RFID is now finally getting its day in the sun," Marshall Kay, founder of RFID Sherpas, told Stores. "Proceeding with RFID should already be a no-brainer for specialty apparel retailers. They have the ability to accelerate more quickly than department stores because they have much more control over their suppliers."
Earlier this week, GS1 announced the founding of the Item Level RFID Initiative, which will bring together retailers and suppliers committed to promote the adoption of item-level RFID in apparel stores.
"The retail sector stands on the brink of a key technology shift, and members of the Item Level RFID Initiative believe that now is the time for the entire industry to move toward a more efficient system for manufacturing, supplying, selling and buying products," said Art Smith, CEO, GS1 Canada.
Discussion Questions: Are there any impediments left to the adoption of item-level RFID in clothing stores? Are there other categories where RFID at the item level does or doesn't make sense?