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RFID in retail is not new; it has been delivering benefits since the mid 2000’s. The business cases, especially for garment RFID are now well understood and adoption is now gaining pace. Companies like M&S, Tesco, Gerry Weber, Jack Wills, and Inditex are already enjoying the benefits.

So what does RFID give you?

The core benefit of RFID in retail is the ability to provide rapid and regular inventory or cycle counts. Not once or twice a year, but perhaps twice a week. Why? Your stock accuracy is probably around 65 – 70%, so when a customer enters the store there is a good chance they will not find what they want; meaning a lost sale. With regular cycle counts, your replenishment system can accurately plug this gap and increase sales due to increased on-shelf availability. Well implemented RFID systems deliver in excess of 98% stock accuracy. The result, increases in sales of between 4 – 21% (ABI Research).

So your stock accuracy and availability is now good, but you can gain some great additional benefits from item level RFID:

Reduction of stocks-outs by 60 – 80%

Reduction in time to receipt stock at back-of-store by up to 91%

Improved conversion rate by up to 91%

Reduction in inventory holding costs by 30 –50%

Once the foundation of accurate stock inventory is in place, then other areas can be focused upon.

Use with an EPOS system provides benefits of reduction in scan time and ‘sweet-hearting’. The inherent uniqueness of an RFID tagged item can also help in the returns process, both in store and at the distribution centre.

Well implemented RFID systems deliver in excess of 98% stock accuracy

Click & Collect can also be a beneficiary. Regular and accurate stock count gives the confidence that you can pick from store, rather than your distribution centre, eliminating transport costs and giving the customer a quicker response to having their item available. You might already pick from store, but your minimum stock level might be much higher than it needs to be as you try to ‘belt and braces’ your stock in order to say to your customer that you ‘have it’.

And when you do have your click & collect pick list, RFID can help here too. Handhelds have the ability to search for an item (Geiger counter-style), reducing picking time and inaccurate selections.

RFID can also help in the changing rooms too, readers can determine what items have been taken in, taken out and critically, are still in there. Staff looking for a particular size can see that there are one or more in the changing rooms and retrieve the items if abandoned there. Collecting data this way provides the opportunity to look at changing room conversion rates; what has been taken in and left there, what is and is not selling, etc.

We have focussed this article in store, but there are many benefits of using RFID in the retail supply chain. We’ll cover this in a future article.

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