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Macy's Expands RFID and Beacon Deployments

The retailer has begun tagging fashion garments at its Macy's and Bloomingdale's stores, to help make sure the merchandise is on the sales floor and to reduce the need for markdowns.
By Claire Swedberg
Sep 16, 2014

Macy's and Bloomingdale's vendors have begun tagging fashion items, such as social dresses and men's jackets, for all of the retailer's stores. The RFID rollout, for item-level inventory tracking, follows initial piloting of RFID for fashion apparel at several of Macy's stores within the United States (see Macy's Inc. to Begin Item-Level Tagging in 850 Stores and RFID a 'Very Big Part of Macy's Future'). Macy's Inc. operates both Macy's and Bloomingdale's stores.

In addition to expanding its use of passive EPC ultrahigh-frequency (UHF) RFID tags, Macy's Inc. is also building out its deployment of Shopkick Bluetooth Low Energy (BLE) beacons, to include multiple departments in all stores. This will enable a shopper who opts in to receive discount coupons and rewards within a store, based on his or her location (see Macy's Tests Shopkick's ShopBeacon at New York, San Francisco Stores). During this expansion, says Jim Sluzewski, Macy's Inc.'s senior VP of corporate communications and external affairs, the company is installing a total of approximately 4,000 beacons, with plans to have them taken live in the next few months.

Macy's will begin offering more focused messages to Shopkick users. As shoppers enter the handbag department, for example, they might be offered a discount on a specific bag.
"We've been on a journey with RFID for the last few years in our stores," Sluzewski says. That journey has included attaching passive UHF tags to basic, frequently replenished items, such as men's dress shirts, as well as to footwear on display within the stores' shoe departments, in order to ensure that all merchandise are displayed at any given time. The value of tagging men's shirts and other basic items was in the ability to better ensure that store inventory remained up to date, and that goods were ordered for replenishment when needed.

The retailer had not focused on faster-changing categories, such as fashion items, according to Sluzewski, because they are often not replenished at all. Generally, soon after such merchandise is received at the store, it is placed on the sales floor, where it remains for up to eight to 10 weeks until the inventory is depleted. Any garments remaining after that period are marked down in price.

During the past spring and summer, however, Macy's Inc. has been considering (and testing) a change to that strategy, and has been tagging some of its fashion goods to make sure all items are on the sales floor, where customers can view them. Tags were interrogated in the back room as apparel was received, and staff members then periodically conducted inventory checks on the sales floor to ensure that nothing had ended up missing. If an order of women's dresses is received in the back room, for instance, the garments may not all be placed on display at first, due to the store having extra inventory. If high-fashion garments on the sales floor are not replenished when sold, however, some of those items might remain in the stockroom and thus might not be sold during that short eight- to 10-week window of full-price opportunity.

All stores already have handheld EPC UHF RFID readers onsite that employees can use to track inventory in other departments. As such, the pilots involving high-fashion apparel only required the application of tags to those goods and the training of personnel in that department to read the tags.

USER COMMENTS

Kristy Liang 2014-09-24 09:42:11 PM
This article was interesting in showing that the electronic side of supply chain is now expanding into retail. With the use of RFID tags to help replenish merchandise on display as well as present customers with coupons as they shop, this new technology benefits both the store and the customers. I think that adding tags will help decrease the workload and increase the precision in keeping up with the store’s inventory. Certain aspects of this technology made me wonder if it would be completely cost efficient to tag all garments and if that meant the prices of these garments would also increase. Another aspect was the use of Shopkick, which gives a coupon upon entering a store. Though this is a nice perk, typically as a shopper myself, knowing about discounts ahead of time encourages me to visit the store. Another possibility would be to figure out how technology and discounts can be distributed in a more accessible way even when you are not near the store. I love how the trend of technology is now being applied in supply chain and it will be interesting to see how it continues to change the world of retail as well. I’m curious to see how smart fitting rooms and bar- code scanning will play out in real life and if I would get to experience it myself as a shopper one day.
Neha Mallik 2015-03-05 11:47:38 PM
Beacons have been touted as a 'for retail' technology since they came into the picture. Yet, very few retailers have been able to get it right with beacons. Which are the three beacon deployments that are innovative, interesting and are expected to be successful in the long run? Read http://bit.ly/1Kqpe4f to know more.

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