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Retailers See RFID's Potential to Fight Shrinkage
But the fact that retailers are beginning to explore new uses of RFID technology in their stores seems linked to something else mentioned a number of times during the event: that store operators are achieving the performance levels with RFID that they have been seeking. This has allowed them to start searching for other applications for the tags and readers, outside of using them for product tracking and for automating shipping and receiving operations.
Although the conference attendees acknowledge that earlier RFID hardware installations had faced some hurdles—such as poor read rates, eliminating sources of RF interference and filtering unwanted reads—the consensus was that the low read rates that stymied RFID test pilots as recently as two years ago are no longer occurring. Most users, in fact, cited read rates at or near 100 percent.
"The technology is mature," said James Stafford, head of RFID adoption at Avery Dennison's Information & Brand Management division. "We can take the discussion of technology off the table and start talking English to each other instead of talking technology." But technology—as well as business benefits—is what end users who spoke at the event focused on, many providing updates on various RFID pilot programs, in addition to some results from those tests.
Helmut Weinekotter, director of processes and logistics for German retailer Karstadt Warenhaus, shared findings from a nine-month RFID pilot the company initiated in 2007 at a retail location in Düsseldorf. The goal of the project, in which men's jeans were tagged, was to determine how well radio frequency identification could optimize specific business processes, such as inventory counting and stock-checking (see Kardtadt Readies for RFID). The retailer also employed the iREAD RFID-enabled shelving system, developed by ADT (see ADT Announces iREAD Network Antenna System), as part of the project. In addition, readers were integrated at the checkout counter, so that as a tagged item was purchased, it was removed from the store's inventory database and its RFID tag was deactivated by an automatic kill command. (Karstadt did not test RFID as an EAS device, nor did it utilize the tag in the financial transaction; instead, the item's bar code was read to initiate a transaction.)
The pilot results Weinekotter shared included an 85 percent decrease in the amount of time staff members spent performing inventory counts, as compared to counting inventory by manually scanning a bar-code label attached to each item. The average time, he said, dropped from 60 minutes to 8. Handheld RFID interrogators were employed to perform the inventory in the store's back room, while tagged items on the sales floor were counted using a combination of the iREAD shelves and handheld devices (for such items as clothes hung on racks and not placed on shelves). The store also saw a 75 percent decrease, he said—from 80 seconds down to 20—in the amount of time spent checking stock for a specific type and size of jeans.
According to Weinekotter, the benefit that the RFID tags offered in the price-markdown process was that by merely being able to locate items more quickly than before, Karstadt Warenhaus was able to mark down its price tags more expediently.
Weinekotter said his company is currently in discussions with a handful of suppliers interested in participating in a second, wider pilot by tagging product prior to shipping it to the retailer. "We'll conduct more tests in different departments, and involving our shipping suppliers," he said, having noted that DHL is the company's primary shipper.
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Although the conference attendees acknowledge that earlier RFID hardware installations had faced some hurdles—such as poor read rates, eliminating sources of RF interference and filtering unwanted reads—the consensus was that the low read rates that stymied RFID test pilots as recently as two years ago are no longer occurring. Most users, in fact, cited read rates at or near 100 percent.
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| James Stafford |
Helmut Weinekotter, director of processes and logistics for German retailer Karstadt Warenhaus, shared findings from a nine-month RFID pilot the company initiated in 2007 at a retail location in Düsseldorf. The goal of the project, in which men's jeans were tagged, was to determine how well radio frequency identification could optimize specific business processes, such as inventory counting and stock-checking (see Kardtadt Readies for RFID). The retailer also employed the iREAD RFID-enabled shelving system, developed by ADT (see ADT Announces iREAD Network Antenna System), as part of the project. In addition, readers were integrated at the checkout counter, so that as a tagged item was purchased, it was removed from the store's inventory database and its RFID tag was deactivated by an automatic kill command. (Karstadt did not test RFID as an EAS device, nor did it utilize the tag in the financial transaction; instead, the item's bar code was read to initiate a transaction.)
The pilot results Weinekotter shared included an 85 percent decrease in the amount of time staff members spent performing inventory counts, as compared to counting inventory by manually scanning a bar-code label attached to each item. The average time, he said, dropped from 60 minutes to 8. Handheld RFID interrogators were employed to perform the inventory in the store's back room, while tagged items on the sales floor were counted using a combination of the iREAD shelves and handheld devices (for such items as clothes hung on racks and not placed on shelves). The store also saw a 75 percent decrease, he said—from 80 seconds down to 20—in the amount of time spent checking stock for a specific type and size of jeans.
Weinekotter said his company is currently in discussions with a handful of suppliers interested in participating in a second, wider pilot by tagging product prior to shipping it to the retailer. "We'll conduct more tests in different departments, and involving our shipping suppliers," he said, having noted that DHL is the company's primary shipper.
