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The Business Case for RFID in Retail

Mark Roberti

Founder & Editor, RFID Journal

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The Business Case for RFID in Retail ApparelMark RobertiFounder and EditorRFID Journal

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Walmart’s RFID Effort

• In July 2010, the retailer announced it will track all men’s jeans and basics with RFID

• 250 million items per year

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RFID Focus Shifted to Items• Studies show RFID

boosts inventory accuracy from 65% to 98%

• RFID ideal for items with complex SKUs (several colors and sizes)

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Adoption Accelerates• American Apparel in all stores

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• Macy’s and Bloomingdales rolling out

• Kohl’s using RFID on shoes

• Borsheim’s tracking jewelry

• Mammoth Sports

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European Retailers Roll OutMarks & Spencer (United Kingdom)

Gerry Weber (Germany)

NP Collection (Finland)

Patrizia Pepe (Italy)

Throttleman (Portugal)

Zara (Spain)

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Inventory Accuracy

• Better on-shelf availability leadsto an increase in sales

• Additional revenue is all profit• What is the level of sales lift?

– 4 percent?– 10 percent?

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Labor Savings vs. Sales Lift• If you spend more

on labor to have higher inventory accuracy, you will save more labor

• Sales lift will be smaller

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• RFID has not been promotedas an EAS solution

• Reduction in theft is not well-documented

• American Apparel found internalshrink declined an average of 55% in RFID-enabled stores

• In some stores it was 75% or more

Reducing Shrinkage

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Other Benefits • Improved customer service andcustomer satisfaction

• 85% reduction in receiving time• 70% reduction in time spent

looking for items• Improved merchandising• Elimination of bi-annual

inventory taking

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Technology Adoption Lifecycle

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Related Retailers Will AdoptJewelry

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Electronics

Cosmetics

Auto parts

Sporting goods