2009.33 | Item Level RFID

RFID has been touted as the future of retail for some time now. Item level tagging certainly seems a long way down the road, given the usual challenges of change including issues like RFID tag costs, altering the supply chain, and engineering changes to store operations.

American Apparel is making an attempt to leverage RFID in the store, and if it works, there are some interesting potential benefits given the right retail environment:

  • Simpler Inventory Management – Cycle counts are more automated and faster, providing more selling time and less administrative time for store staff.
  • Shrink Reduction – RFID could prove more effective than EAS technologies, given the potential to allow an exit gate alarm to go off only if an item has not been scanned. Instead of scan and de-activate, an item needs only be scanned. The gate could even identify the specific item that has passed through the gate to staff.
  • Better Service in Store – Always knowing the sizes and colours on the floor and in the back is key to customer satisfaction.
  • Potential Loyalty Program Benefits – Having RFID readers in the store could allow Loyalty card holders to be identified by staff and accorded special treatment.

There are certain to be other benefits not yet considered, so let’s hope that the business case comes together for the technology.

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