4 Clear Business Benefits of RFID

Press enter to search
Close search
Open Menu

4 Clear Business Benefits of RFID

By Will Roche - 06/30/2014
Brick and mortar retailers are fighting to compete with online companies by offering services like order online and pick up in store or fulfillment from store for next day delivery. It is all about serving the customers’ expectations of near instant gratification. Customers wait and take their time while researching a product's functionality and quality and when they are ready to pull the trigger and purchase, they want it now.

Retailers and analysts have been talking about the new age of “mobile” and how customers have access to all this information while in-store. Retailers need to provide customer specific offers while the customer shops and give their associates mobile tools so they can know and serve those customers better including taking payment on the store floor.

Years ago everything was about self-service. Automating everything in the store so that a customer practically did not have to talk to sales associates was the next big thing. The concept was based on the brand new online experience and reduction of labor in one big sweep. Not to say self-service does not have its place today but it is a part of a complex mosaic of decisions retailers are trying to put together to compete and grow sales.

Item-level RFID improves inventory accuracy, helps reduce costs, increase sales, and even provides many opportunities for omnichannel experiences. What retailers do not know is what the investment is going to cost and what the immediate and long-term returns are. RFID integrated tags replacing traditional hang tags and stickers costs on average 10 cents each as compared to the one to three cents today for traditional tags. This all adds up to millions of dollars combined for tags, software, hardware, store fit-up along with training and business process transformation costs. 

Retailers need the business case in hard dollars and cents. Retailers are tired of going to their board asking for money for all these new “shiny objects” now available and finding out after the purchase that the great returns are just not there.

The need for in-store inventory accuracy is an absolute requirement in this new world of retail and item-level RFID is a proven method of achieving near 100% accuracy. The question is can you afford the investment without going out of business and where do you put it in line with all of the other projects? Fortunately with RFID there is hard evidence to build a business case to take to the board.

This quote is from Bill Hardgrave, Auburn University one of the top advisors to retail for RFID. “Solve the fundamental business issues first, and then turn the attention to the customer experience.”

These are the four basic issues RFID is able to tackle and the stated industry results to date:
  • Store Inventory accuracy – 99% item-level accuracy compared to 65%-70%
  • Out of stock – reduction 50% and sales lift 2%-7%
  • Loss prevention – 70% reduction of internal shrink
  • Locating product – sales lift 2%-7%
 
Will Roche is VP of sales (Americas) at Xterprise, a solutions provider focused on supply chain operations, RFID technology, enterprise software development and software sales, and marketing.