Momentum Is Growing for Item-Level Tagging, Survey Says

In its report based on the survey, Aberdeen recommends that users of RFID make inventory data available to knowledgeable staff members in real time, and that the employees utilize the information for business-process improvements. Further use of an existing RFID system is also important, Klein adds, extending the technology beyond inventory tracking to allowing self-service, or other service improvements for customers. One real-life example he cites is a high-end jeans retailer that employs RFID tags on its clothing to provide continued service to its customers. Although he declines to name the company, he says it provides special services with the jeans purchased at its boutiques; for example, customers can bring the pants back to the boutique to be pressed and cleaned. An RFID tag sewn into the jeans is read by the store's staff when they are brought in, in order to confirm that they are products from that boutique, and are thus eligible for cleaning and pressing.

An RFID system, once in place, can also be used to optimize the point of sale (POS), by making the process of purchasing items faster and more accurate with an RFID reader in lieu of a bar-code scanner. Bar codes require that workers scan each tag, Klein says, and a tag could be lost in other purchases and therefore not be rung up. RFID can also be used for security purposes—and in some cases, he says, RFID systems have been adopted primarily for that purpose. However, he notes, such installations do not generate a return on investment as quickly as those intended to solve the problem of inventory accuracy first, with POS and security brought in as a secondary solution.

"Our data shows that more than half (57 percent) of retailers that use or have plans to use RFID prefer to employ the technology at the item level," Klein indicates in his report. "Indeed, many will tell you that RFID at the case and/or pallet level is a waste of time and money." Most commonly, the report finds, tags are being attached to merchandise most frequently—69 percent of the time—at the source (that is, at the point of manufacture).

The results of the study should be good news for the RFID technology vendors that read it, Klein says, noting, "I think it's fuel for the fire. They already know they're on to something" with item-level tagging. "The price point of technology is coming down, the value is coming up, the technology is faster and more reliable... All the old objections are starting to be no longer valid."

The report is available to the public for free at the Aberdeen Web site.