RFID
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Retailers must master RFID before pursuing secondary benefits

Some interesting numbers were floating around the GS1 Connect conference in Austin, Tex., early this month. According to tweets from GS1’s Patrick Javick, 100 percent of Macy’s stores are ready for EPC-enabled RFID, and the retailer anticipates all categories and products will be enabled by 2018.

In addition, apparel supplier VF Corp. applied more than 30 million RFID labels to its products in 2014, and has tagged more than 200 million items since its RFID journey began.

That kind of saturation is leading to all kinds of new use cases within retail, such as asset tracking, employee productivity and expanded loss prevention use cases. Despite the temptation to do so, it is crucial that retailers have a mastery of RFID before delving into secondary use cases.

More RFID use cases beyond basic replenishable items are driving ROI for today’s retailers.

Some retailers are considering RFID to better understand and utilize their work force, especially when it comes to improving efficiencies within the supply chain and the distribution center. By using RFID on employee ID lanyards, managers can witness where employees gather, how they are routed to operations, and where there might be opportunities to increase productivity.

“There are best practices developed for the DC that could potentially come to the store, especially as all this new work enters the store around fulfillment activity,” says Randy Dunn, director of global sales and professional services at Tyco Retail Solutions.

“With everything going on to provide better service to the more informed and demanding shopper, we’re starting to see retailers play with the idea of using RFID to better manage their workflows.”

Retailers like Marks & Spencer are also are also turning to asset tracking solutions – common in manufacturing and healthcare – to track store infrastructure like artwork, display racks and roll cages.

Richard Jenkins, the head of RFID strategic development at M&S, says that attaching RFID tags to company infrastructure could save the retailer millions in cost avoidance each year.

Peter Longo, president of logistics and operations at Macy’s, advocates that new uses cases can be found for RFID every day. However, Dunn cautions against chasing new applications before you’ve mastered the basics.  “Mr. Longo has the luxury of being able to think like that because his organization has spent the past half decade developing the capabilities necessary to harness the power of RFID,” says Dunn.

With RFID infrastructures already in place, additional use cases create tremendous financial leverage for retailers, many of whom are aggressively deploying them to increase their return on their RFID investment. But Dunn notes that chasing new or unproven use cases can be detrimental for retailers with little or no RFID experience.

“The advanced ones like Macy’s and M&S come up with use cases faster than the industry can vet them,” says Dunn. “There are good reasons why virtually every retailer gets started the same way with their RFID deployments.  Abandoning that path can be a dangerous practice for a retailer that doesn’t have command over the technology and its limits, and an employee base that hasn’t fully mastered how to make the technology work for them.

“Moving on to new use cases requires a level of maturity not just from deploying the technology, but living with the technology. The technology creates data that needs to be operationalized and you need to direct employee activities based on these new insights. Once you get good at that, then your ability to start to thinking about new use cases is almost endless. But to do that prematurely can actually be destructive; it will kill your project before it has time to mature because there has to be a certain level of mastery. It’s like jumping into a calculus class when you don’t know how to do algebra.”

Learning to do algebra involves first mastering RFID for inventory accuracy, considered the main and initial use case for retailers. Improving inventory accuracy to levels as high as 98 percent opens the door for ancillary use cases like customer engagement and omni-channel retailing.

“I do think there will be an almost limitless number of retail use cases supported by RFID going forward,” says Dunn. “That’s where the competitive advantage will come from. It doesn’t come from inventory accuracy; that’s just the path for getting started. The real advantage for retailers lies in all the unique and novel ways they can use RFID to operate differently and better serve their customers.  Creating brand experiences that can’t be created without highly accurate inventory information – that’s the big promise for this technology.”

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