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Retailers: Item Level RFID is the Key to Omni-channel Retailing

This guest blog post by Patrick Javick examines the increased focus that retailers are placing on RFID as they pursue omni-channel retailing strategies.

From the manufacturing facility to the sales floor, brands and retailers are using Electronic Product Code (EPC)-enabled, item level RFID to develop more efficient business processes and deliver a better experience for the end customer. While inventory accuracy and cycle counts continue to be the biggest factors driving adoption, the impact of RFID on omni-channel retailing is beginning to take center stage.

item level RFID

Patrick Javick, Vice President of Retail Apparel and General Merchandise at GS1.

At the recent Retail Industry Leaders Association (RILA) Logistics Conference in February and the NRF Big Show in January, many discussions focused on the critical role that EPC-enabled item level RFID plays in omni-channel retailing. Retailers are striving to provide a seamless, consistent customer experience regardless of how customers shop – in the store, at home in front of a computer, from a mobile device, or through a catalog.

RFID allows retailers to gain visibility into their entire network of suppliers and distribution centers, providing retailers with accurate, up-to-date inventory data across all channels. This is why both academia and industry executives share the view that a successful omni-channel retail operation can only be achieved through the use of RFID technology.

During the NRF Big Show, GS1 US hosted an executive roundtable that included representatives from leading national brands and 12 of the top 15 U.S. retailers. Participants in the roundtable made it crystal clear that the belief in EPC-enabled item level RFID – and the benefits it delivers – is unquestioned.

Although one national retailer recently announced that it is scaling back its plans for item level RFID, it is important to note that this retailer is not abandoning RFID. GS1 US and its community of EPC-enabled RFID adopters understand and want to assure the rest of the industry that this decision is related to the national retailer’s overall strategic direction at this time, and is not a reflection on the technology or the ROI it delivers. In fact, the retail community as a whole continues to move forward enthusiastically with item level RFID.

Retailers currently deploying the technology are expanding into new product categories and exploring new use cases, including loss prevention and display compliance, which provide enhanced business value beyond inventory accuracy benefits. At the same time, many newly engaged retailers are either piloting now, have plans to pilot this year, or have committed to implementing RFID technology and are in an active discovery phase.

Retailers like Macy's are pursuing RFID to enable omni-channel retailing

GS1 US currently has 125 retailers and suppliers participating in the GS1 US Item Level Readiness Program. They are receiving the education, tools, resources, and community support the need for successful implementations. On the technical side, they learn the use and benefits of EPC standards and on the business practice side, they are gaining insight for true source-to-store deployments.

Recent information from our solution partners indicate an acceleration in deployments, with 200 retailers and more than 6,000 individual stores in the U.S. engaged in active pilots or deployments. We also learned that the number of logistics companies that are incorporating RFID into their offerings – including National Retail Systems (NRS), Dynamic Worldwide, and Li & Fung – is growing dramatically, enabling brands and retailers to operate even more efficiently.

Similarly, technology providers have improved their solutions and services, making the integration of software into backend systems much easier. GS1 US is focused on bringing together brands and retailers from across the apparel and general merchandise industry to find the best path forward. We will build on what we learned from the roundtable discussion at the NRF event, and support industry outreach and education offerings to foster the continued adoption of RFID at an even more rapid pace.

We are developing a peer-to-peer executive outreach program designed to share industry activity and lessons learned, and also to identify key areas where industry should focus its efforts in the near term and for the long run. The momentum is building towards industry-wide adoption of EPC-enabled item level RFID, but only through collaboration can we take the next step wisely and with confidence. We encourage the retail community to get involved and work together so the full benefits of RFID can be realized by the industry as a whole.

Patrick Javick is vice president of retail apparel and general merchandise at GS1.

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