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Retailers with RFID will win big on Black Friday

Retailers using RFID technology should have a major advantage when the holiday selling season gets underway on Black Friday. Consumers are expected to spend $617 billion on holiday shopping, and retailers with RFID will be in position to capture a greater portion of those sales.

Macy’s, for example, is on record that RFID has helped to boost sales an average of 9.7 percent for apparel items tagged with RFID. Dress shirts lead the way with a 26 percent gain, which clearly emphasizes the role that RFID plays for apparel items that come in multiple colors and sizes.

RFID in Retail

Kohl's is rapidly deploying RFID and will allow online shoppers to pick up orders at a limited amount of stores.

RFID will benefit retailers and consumers alike on Friday and Cyber Monday. The goal for Black Friday for many stores is to flood as much product onto the sales floor as possible. Although RFID isn’t a panacea when it comes to back-to-front replenishment on Black Friday itself, it can be of great benefit after Black Friday, when it’s time to clean up the sales floor and properly restock it for the rest of the selling season. This can be crucial after the high store traffic on Black Friday, which can lead to higher incidents of theft and cashier errors. RFID is also crucial for display compliance, which can drive additional Black Friday sales.

“The recovery from Black Friday is where RFID has a huge impact,” says JP Kamel, a principal with retail consultancy RFID Sherpas, which helps major retailers to deploy RFID.

“After all this movement of product on Black Friday, your store’s true inventory positions will not be what you expect them to be. By cycle counting and updating master inventory records, retailers put themselves in better position for omnichannel sales. Fulfill-from-store and pickup-from-store operations will be much more effective.”

Kohl’s, which has widely adopted RFID over the last 18 months, has big plans to embrace the omnichannel concept this holiday season by relying on the accuracy of its RFID-managed inventories.

According to published reports, customers ordering online will be able to pick up their items at more than 100 Kohl’s locations. And Kohl’s will fulfill online orders from more than 800 stores in order to ship online orders faster and more accurately.

“Retailers who are using RFID inventory data to update their on-hand information will be able to drive their omnichannel sales by allowing them to expose more units to their online customers,” says Kamel. “Coming out of Black Friday, this could be very relevant on Cyber Monday.”

New confidence in inventory accuracy driven by RFID is allowing retailers to expose more inventory than ever to online shoppers and internal locator systems.

Retailers are pushing toward the concept of being able to make all in-store units available, right down to the very last unit. RFID gives retailers tremendous confidence in their data, and they can now make that last SKU available online.

“Traditionally, retailers depended on buffer stock to ensure they could deliver on the promise of buying online and pick-up in store, and to a lesser extent, buy online and fulfill from store,” says Kamel.

“For example, if a retailer didn’t have at least three of a particular SKU in stock, they would not make it available to buy online and pick up in the store. The universe of available product is much smaller when you have to utilize a buffer.”

Aside from the obvious boost to omnichannel retailing, RFID can provide strong gains on Black Friday when it comes to display compliance, which is critical in categories like footwear and handbags, where only a single unit is placed on the floor. Strong execution is always critical in a retail environment, but even more so around the holidays. Kamel says that in some cases he has seen retailers display as many as 35 percent more styles and colors when they use RFID.

“Having the tools to make sure that you have one of everything on the floor before you open your doors for business – and then perhaps even doing an additional count halfway through the day to make sure you still have one of everything – can be a game changer,” he says. “Without RFID, you couldn’t accomplish that because it would take you hours.”

Lastly, because RFID allows sales associates to spend less time doing remedial tasks like item replenishment and product searches, retailers can redirect that labor to interaction with shoppers. “That’s not an obvious benefit, but it’s a big one,” says Kamel.

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