Phone-Tracking Pilot Down Under Points to Big Benefits

"We had a 75 percent reduction in the time spent receiving goods as staff no longer had to read the number on individual phones and unpack boxes," he says. "With RFID, we simply pass the box through the reader, and its contents are recorded immediately. We recorded a 55 percent reduction in time spent on stock-taking, a 75 percent reduction in out-of-stock and missing items, and a small reduction in unexplained shrinkage, which would generate savings of $300,000 a year in a full system rollout."

Telstra experimented with a number of set-ups in order to determine which provided the best read rates.

There was also a reduction in time spent investigating in-store shrinkage. Traditionally, employees would have to search the stock room and watch days of CCTV footage to determine when and where a phone went missing. With RFID, however, workers could determine exactly when the phone was last seen in-store, and check the appropriate CCTV footage.

According to Marchand, with the reduction in non-customer-facing time across 130 stores, combined with the reduction in shrinkage, Telstra expects to save up to AU$4 million (US$3.3 million) per year, and a positive return on investment within 18 months. "We also expect some long-term gains, such as reducing the time we are out of stock and increasing sales," he states, "but we need more time to see those benefits because we need to adjust our processes accordingly, as we are seeing things that we didn't see before."

All Telstra retail stores are in the process of refreshing IT systems, Marchand notes, so the company will have to wait until that is finished. Telstra then plans to "strongly consider full rollout of RFID across all 130 stores," he says.

In the future, Telstra Enterprise & Government hopes to provide the complete RFID system to other retailers as a fully managed service. Marchand hopes more Australian retailers will begin announcing the results of item-level tracking trials to increase take-up of RFID across the country. "I really believe we need to hear about more from other companies," he says, "because the savings from RFID will only come when companies begin to share information and learnings. The next step, for us, is to get phone manufacturers to start tagging items themselves, and they will be more likely to adopt it if they hear of others' successes."