RFID Talk Blog

Forbes: RFID can solve Walmart’s billion dollar inventory problem

It is well documented that out-of-stocks represent a billion dollar headache to the retail industry. For Walmart, inventory issues and out-of-stocks led to a $3 billion loss in sales last year.

Item level RFID is improving inventory visibility for apparel retailers.

Retail analyst and Forbes contributor Paula Rosenblum authored a piece this week about how RFID technology, and the Impinj xArray system in particular, can greatly help to narrow those losses.

In the article, Rosenblum states that by embracing the latest in RFID technologies, as well as bringing some payroll back into the store to work the system, Walmart could get its back rooms and inventory management under control within a year. “The company would get a major bang for its payroll buck,” she says.

Click here to learn how other retailers are using RFID to increase inventory accuracy and decrease out-of-stocks.

Here is an excerpt from the article”

I’ve focused a lot on Walmart’s problem in this piece, but I wanted to emphasize again the incredible value that specialty retailers would accrue from now-affordable full in-store coverage. One of retail’s dirty little secrets is the amount of money spent each year on taking store physical inventories. This includes preparing the store, making sure receiving cut-offs are clean, tidying up the back room, and the cost of actually counting the merchandise (typically performed by outside companies) and reconciling counts. The cost is all the more frustrating when we consider that these counts are rarely 100 percent accurate. They’re likely close in aggregate financial value, but by item, not so much.

I’ve waited a decade for the hype about RFID to subside and the benefits to kick in. I always knew those benefits would be higher for apparel than for cans of peas. And I knew they were tied not to tag costs, but to reader costs. It appears the day is finally here. The tags can be de-activated before they leave stores/distribution centers to alleviate privacy concerns. This is one opportunity retailers have to both satisfy their customers and shareholders. Improved inventory visibility and accuracy coupled with reduced inventory investment is a winning formula no matter how you look at it.

Click here to read the full Forbes article.

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