Dillard's, U. of Ark. Study Quantifies RFID's Superiority to Manual Inventory Counts

With RFID, Hardgrave asserts, based on this research, a thorough storewide inventory could be conducted more often than twice annually—perhaps every week—in a matter of minutes using RFID readers. This, he says, would yield the benefits of storewide inventory without requiring the exhaustive process of manual inventory counting by employees, which often takes weeks.

Researchers also tested the accuracy of RFID as a theft-reduction or security device, by imitating a typical shoplifting scenario—such as removing a stack of jeans, placing them under an arm, and running or walking past the reader out the doors. In nearly all cases, the tags were read, while in several instances, when one tagged item was held closely under an arm, the system failed to capture its ID tag.

Hardgrave's group also analyzed RFID data to provide loss-prevention insight. Because the sales staff had been instructed to remove a pair of jeans' RFID tag at the point of sale, any tags detected by the interrogators at the employee or customer entrances would serve as an indicator of potential theft or store associate error (that is, a failure to remove the tag). To determine the latter, the researchers examined each RFID read from the employee or customer entrance, then compared that information with POS data. If a match was discovered, the team attributed the read to a worker's error. If no sale of that product was found, the item was deemed stolen.

Over the course of the study, more than $3,500 in merchandise was assumed stolen based on the above approach. Dillard's could then use the resulting data to determine the quantity of items stolen, as well as the time and place (the employee or customer entrance). The retailer could then utilize this information to institute appropriate loss-prevention methods and adjust the inventory count accordingly—and, if necessary, order additional merchandise to replace the stolen goods.

Dillard's did not respond to a request for comments regarding the study, though the retailer, as well as the University of Arkansas, "will be aggregating these results for an overall picture," Hardgrave says. "We know we've seen solid results."