The benefits of using RFID in the retail sector are well documented. Sales gains of 10 percent ore more have been reported from improved inventory accuracy and reduced out of stocks. In addition, retailers see sales uplift from enhanced consumer engagement through applications like RFID-enabled mirrors.
However, the advantages for apparel brands are becoming noteworthy as well. According to GS1 US, more than 40 percent of apparel brands are source tagging with RFID, and the use of RFID is expanding into other retail areas as well.
The average manufacturer can expect a sales increase of from five to 15 percent from RFID adoption. For a brand shipping five million units, a revenue increase of 10 percent could mean an annual sales increase of $10 million or more.
In addition, a number of retailers have announced that they will begin to fine manufacturers/brands for noncompliance and incorrect merchandise information accompanying shipments in 2017. A brand with 2,000 shipments containing 20 million units per year — using an average industry error rate of six percent — could face more than $1 million of audit fines next year, which could be saved through RFID adoption.
While the increasing use of RFID by brands is a welcome trend, it does present some complexities because of the high number of suppliers, retailers and end customers in the mix. So how can brands get the most ROI with RFID implementations? Here are five recommendations, courtesy of Checkpoint Solutions.