Jon Beeler, director, merchandise operations for Soma Intimates, a Chico's brand, says the company is seeing positive results with RFID in store after piloting the technology in its headquarters to track the constant influx of sample items. Associates equipped with RFID guns have helped shoppers locate specific items that they otherwise may not have found, such as a customer who came in seeking a navy blue bra in a specific size.
Mark Hill, vice president and general manager, Global Innovation and Solutions Development, Retail Branding and Information Solutions for Avery Dennison Corporation, says retailers are beginning to do more tagging at the point of origin rather than at retail or in distribution centers, mostly due to cost savings and concerns. It's cheaper for a factory in Asia that's producing the goods to handle RFID tagging, where labor costs and wages are lower than they are in European and American distribution centers. Also, RFID tagging enables 100% inspection of goods instead of the standard 10% because tagged products can be read so quickly. RFID tagging is flowing back from retail so that the entire supply chain can benefit from the visibility it enables. "RFID is the guy behind the curtain," he says.
One retailer ended shrink thanks to RFID, says Hill. It noticed that it was losing inventory consistently so staff looked at video and discovered that the same guy was visiting the store on his lunch break every day and stealing product. With the video proof, they nailed him.
The tipping point for RFID adoption, according to Hill, will come when 40-60% of the items produced by a brand owner are being distributed to retailers, such as JCPenney and Macy's, which require RFID tagging. And given the current pace of adoption, RFID likely will become industry standard in half the time it took the UPC to fully catch on when it was introduced in the 1970s, says Flake.