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RFID’s role on Black Friday

There was plenty of evidence of the lack of inventory visibility in the retail world during the biggest shopping weekend of the year. I headed out on Black Friday in search of a few bargains, and was met by more inventory ineptitude on the part of many retailers.

I’ve blogged about these retail nightmares before, most recently my experiences at Clark’s and at Champs Sports. I estimated that both stores were losing millions because of poor inventory visibility.

Black Friday, RFID, retailers

Frost & Sullivan says that the RFID apparel market will be worth $1.47B in 2017.

Add upscale women’s fashion retailer Coldwater Creek to the list. After searching for that perfect sweater to give as a gift, I was disappointed – but hardly surprised – to find that the item was available in only two sizes on the store shelf. While the store associate searched for the size I needed, my alert daughter actually found the sweater in the right size. It had been placed on the wrong rack with a similar color sweater of a different style.

The store clerk, who was taken off the sales floor for several minutes, was surprised to see us at the checkout line with the item we needed. So while RFID deployment in the apparel sector continues to make huge strides, adoption clearly has a long way to go.

Retailers who have deployed RFID could be the big winners when it comes to Black Friday sales. A retailer utilizing item level RFID could have located the misplaced product in seconds. Most likely, it wouldn’t have been misplaced in the first place. A store with RFID can perform a cycle count of the sales floor with a handheld reader each morning. The system allows store personnel to see immediately that there are six SKUs in the back room that are not included in the count they just took on the sales floor. Those items become a priority because they are not on the sales floor.

While I was lucky to find the product I needed, somewhat like finding a needle in a haystack, who knows how many other customers walked out of the store because the item was misplaced and deemed out of stock. Misplaced items clearly contribute to the lack of inventory visibility that plagues retailers, and in many cases compound the problem.

It all adds up to a distinct advantage for retailers who have deployed RFID. For example, retailers like American Apparel and Bloomingdale’s that have rolled out RFID to multiple stores and possess near real time visibility into their inventory position can proactively and dynamically change deals and price points in real time.

A retailer with stores in San Francisco and Boston, for example, might have sales flying off the shelf for an item in one region, only to have that item be stagnant in the other.

“By having RFID you should be able to have more dynamic pricing,” says Mike Liard, director of the Auto-ID practice at VDC Research. “You obviously have a more dynamic view of your inventory and you can enhance customer service, but this is the kind of business benefit that inventory visibility has a direct impact on. When it comes to real-time deal making, what better time is there than Black Friday weekend? They have the visibility to see that a particular item might be doing well in one region and not the other, and the ability to discount the item in the region where it is slow moving. Whether retailers acted on this capability this weekend remains to be seen.”

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