In a recent BRP white paper, RFID – The Silver Bullet for Inventory Accuracy and Visibility?, we explore how radio-frequency identification (RFID) technology is emerging as a critical enabler of the omni-channel experience. RFID provides retailers with real-time visibility to accurate inventory across the enterprise, making it an imperative to real-time retail.
A catalyst for significant economic benefit, RFID gives retailers the ability to automatically identify and track goods, as well as capture instant information on a wide range of merchandise. As the technology has gained traction, it has allowed retailers to reap financial benefits and efficiency gains while strongly supporting the unified commerce model.
Retailers are taking note, evidenced by RFID’s deployment among retailers such as Zara, Saks Fifth Avenue, Lord & Taylor, Macy’s, Bloomingdales, and Chico’s. As the retail industry accelerates the shift towards an omni-channel retail model, more retailers are likely to follow suit by incorporating RFID technology into their environments to support a true unified customer experience.
Evolution of RFID Technology
Despite the inherent benefits of RFID technology, its adoption by retailers has been a slow process for budgetary reasons. RFID per tag costs were previously prohibitive for many retail applications; however, technological advances have resulted in significant price decreases and have made RFID more accessible to a broader range of organizations.
RFID technology provides retailers with an opportunity to significantly improve sales, gross margin and markdowns through better leveraging of real-time, accurate inventory information. Since logistical inventory tracking can be extremely laborious for all retailers, and particularly those with stock keeping unit (SKU) intensive models, organizations stand to profit considerably by employing RFID.
As it relates to omni-channel initiatives, RFID provides fundamental support to businesses that offer a large assortment of styles, colors, and sizes. Near perfect inventory accuracy is needed to realize real-time retailing capabilities such as buy online and pick up in-store, buy online and receive in-store, and buy in-store and ship to home. SKU depth can cause item quantity distortion, as maintaining exactness in inventory counts presents numerous execution issues.
Read the BRP RFID white paper for more details on RFID, including case studies and a 3-step methodology for implementing RFID.
While RFID has been slow for retailers to adopt due to cost and ROI challenges, reductions in costs and advancements in technology are certainly making RFID an attractive proposition for retailers.
But is it the silver bullet? What do you think?
As always, I welcome your thoughts and opinions. Please share your comments below.