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The Business Case for RFID in Retail
Mark Roberti
Founder & Editor, RFID 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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Related Retailers Will AdoptJewelry
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Electronics
Cosmetics
Auto parts
Sporting goods