Forward Vision Analytics

Why an RFID Strategy Is Important for Retailers

Radio-frequency identification holds the potential to eliminate errors and claims costs in the supply chain.

While a report published by IDC earlier this year notes that nearly 8 in 10 retailers have set aside funds to spend on visibility platforms, including radio-frequency identification, research out of Auburn University’s RFID lab indicates that such technology could potentially remove claims costs in the supply chain.

The study, which reviewed the flow of product information of eight retail brand owners and five retailers from June 2017 through July 2018, found that order accuracy for brands using RFID tags to capture information and reconcile shipments exceeded 99.9 percent.

“In an era of omni-channel retail — which demands high inventory accuracy — the errors created in the supply chain propagate downstream and ultimately impact a retailer’s ability to meet customer demand in a timely manner,” the study’s authors write. “As our results suggest, several of these errors found at the store or in direct shipments to the consumer via a retailer’s fulfillment center are caused by the upstream disparity between the information flow and the physical product flow amongst brands and retailers. … RFID technology eliminates the errors commonly found in the process, ensuring the accurate flow of information and products.”

A Tool to Boost Customer Experience Management

Despite the already widespread use of RFID in the industry, analysts from Frost & Sullivan say that retailers need to adopt the technology, along with videos, cameras and data analytics, to keep track of inventory and improve customer experience management.

Ram Ravi, the firm’s industry analyst for industrials, states that such tools will strengthen investments in handheld readers and smart point-of-sale solutions. “RFID sales will get a further boost from the intensifying focus on loss prevention, inventory management and customer behavior analysis,” he says.

Macy’s is one retailer that has notably benefited from deployment of RFID. In 2016, it announced a plan to expand use of the technology to track 100 percent of items in all stores by the end of 2017, according to RFID Journal. According to an article in Supply Chain Dive, Macy’s is tagging individual apparel items for 900 locations with an accuracy rate of 97 percent.

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Source: Why an RFID Strategy Is Important for Retailers – BizTech Magazine