It's long been expected that the use of radio frequency identification (RFID) technology would have enormously beneficial effects for retailers. The good news is that, in apparel and footwear retailing, RFID is indeed having a positive impact -- but it's the retail store, rather than the supply chain, that is seeing the biggest benefits.
Most experts predicted that the supply chain was going to be the place where RFID’s abilities were first supposed to produce big returns. Case- and pallet-level tagging would improve product movement visibility, streamline distribution, and make forecasting more accurate and manufacturing more responsive. It’s true that RFID technology has made inroads in these above-store areas, and will continue to do so, but in apparel and footwear retailing, the most impressive RFID action is at the store level.
Item-level RFID deployments are boosting stores' inventory accuracy levels to near-100%, and this simple yet dramatic improvement is setting the stage for a host of other benefits:
- Out-of-stocks reduced by 60% to 80%
- Sales increases of 4% to 21%
- Reduction in cycle count time by 75% to 92%
- Reduction in inventory carrying costs by 30% to 59%
These figures, from real-world item-level implementations by Motorola and its technology partners, show how positively dramatic the results can be. RFID solutions sustain the improved processes and remove the human error associated with historically manual inventory collection tasks, and their practical application has provided a quick ROI through the increased sales and enhanced customer service associated with accurate on-hand inventory. RFID's performance is especially impressive in light of retail's historical problems with inventory accuracy.
Read this white paper to learn more about the benefits retailers are seeing from RFID.