STORES Magazine - September 2017 - 26
RFID can generate information that
can be combined with other storelevel data and provide insights in areas
including demand forecasting, dynamic
pricing and in-store marketing.
customer satisfaction. Inventory accuracy (as
measured by gross unit variance) showed significant
improvements as Macy's could conduct more regular
cycle counts of items tagged with RFID.
Researchers also found that making single merchandise
units visible and for sale across all omnichannel
channels was highly beneficial - test stores significantly
outperformed control stores in terms of fulfillment
requests, units picked and units sold. Unsurprisingly,
data also revealed that RFID-tagged items could be
located and sold much easier than non-tagged items.
The report said RFID can generate information that
can be combined with other store-level data and provide
valuable insights in areas including demand forecasting
and merchandise trends, dynamic pricing, fitting room
utilization and conversion, merchandise placement and
Platt says RFID data is arguably the "single most
important merchandise-related information available" to
help retailers improve the relationship between customers
and products. While several studies have analyzed RFID
as a facilitator of supply chain management, researchers
wanted to consider other available data and see how it
might impact other areas of retail operations.
"I think for the vast majority [of retailers], this kind of
inventory visibility and supply chain management will be
critical," Platt says. "But there's a lot more to it than that."
RFID IN PRACTICE
Platt says the principle advantage of RFID tags
versus traditional bar codes is that they can hold
more information about products, such as size, price,
color and location. In many cases, the time required
to collect such information is also faster and more
accurate than traditional bar code scanning.
While RFID tagging has been used for more
than a decade (Walmart began requiring suppliers
STORES September 2017
to tag cases and pallets in 2003), only recently
have powerful cloud-based platforms made more
information available. Retailers now have a means to
not only tag individual products but also collect more
information and process it in a meaningful manner.
Researchers considered four main uses cases with
the Macy's pilot: display audit, inventory accuracy,
single unit fulfillment and back to front. They found
RFID substantially improved the rate of display
compliance and customer satisfaction through their
ability to "find items."
They also discovered that 1 percent more sales were
made at full price, and 2.6 percent more sales were
made at full price and after the first markdown during
the post-RFID deployment.
Platt says if the retail industry is to move to
dynamic pricing based on supply and demand
dynamics, it will need accurate knowledge of where
the inventory is at any point in time.
Other retailers are already using RFID on
individual products to enhance the customer
experience. Lululemon has implemented Tyco's
TrueVUE RFID Inventory Visibility system to report
real-time inventory to customers. The retailer also
implemented the Tyco Retail RFID Fitting Room,
which offers visibility to item-level inventory in
the fitting room with additional insight into the
stockroom and sales floor. This helps sales associates
better assist customers, monitor the area to combat
shrink, enable fitting room merchandising and
promotional opportunities, and boost sales.
Brent Brown, vice president and general manager
at Tyco Retail Solutions, says it's a highly effective
way to make stores more relevant and drive shoppers
back to bricks-and-mortar through differentiation
and personalization. "It becomes a pretty powerful
competitive advantage, especially when you start
to marry the links between online and bricks-andmortar," Brown says.
Francisco Melo, vice president and general manager
of global RFID at Avery Dennison, says while many
companies already see a return on investment, the
question is how and when they should implement
RFID. Melo says a retailer should first know the
level of accuracy it currently has and the impact that
accuracy has on its business. The retailer also needs
the ability to act on that information with a level of
store operations discipline and capacity to execute
plans that produce improvements.
"The technology today has been very successful, in
particular with retailers and brands that are across a
large footprint," Melo says. "The more widespread
you are, the most successful it tends to be."
Brown says while the "low-hanging fruit" revolves
around supply chain and inventory management,