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Consumers Rule!

Shopping habits revealed during the 2014 holiday season will likely propel many retailers to adopt RFID.
By Bill Hardgrave
Mar 02, 2015

I always find the National Retail Federation (NRF) annual conference fascinating. In early January, more than 30,000 people descend on New York City to talk, listen and learn about the latest developments in retail. This year, the pre-NRF buzz seemed to be about RFID and omnichannel, most often mentioned in the same sentence. I was determined to find out what was truly on retailers' minds.

The first day of the show, I served on a panel with Pam Sweeney, Macy's senior VP of logistics systems, and Joe Granato, Lululemon Athletica's director of operations and global initiatives, moderated by RFID Journal's Mark Roberti. Sweeney said Macy's plans to expand its RFID initiative in 2015 to more categories to provide visibility to the "single" unit and execute its omnichannel promise to consumers. Granato said Lululemon wants to improve inventory accuracy to enhance the customer experience. (Many thanks to both Macy's and Lululemon for discussing their deployments and communicating the RFID message.)

The next day, I spoke with a group of retailers and suppliers at a breakfast meeting. Throughout the rest of the conference, I met with groups of retailers and brand owners, as well as with individual retailers.

Indeed, everyone was talking about RFID and omnichannel, and for good reason. It seems many retailers were unprepared this past holiday season for the shift in consumer buying behavior. Black Friday sales were down, but online sales and overall sales were up. The omnichannel consumer had arrived and was demanding the freedom to shop anytime, anywhere—in a store, on a mobile device, on a home computer or by phone. But most retailers were unable to provide a uniform experience across all delivery channels—such as buy online pickup in store (BOPIS)—because they had poor visibility into their inventory at the store level.

As I've discussed in recent columns, retailers understand RFID can provide real-time, accurate inventory data efficiently and cost-effectively. They knew customer buying behaviors were shifting and omnichannel was on the horizon, but many didn't believe it would be here this quickly. So the buzz among retailers not yet using RFID was how to get up to speed quickly. And the buzz among retailers using RFID on some items was what merchandise they should tag next. Several retailers that have been tagging replenishable items are expanding to fashion (nonreplenishable) items

It is a matter of when—not if—RFID in apparel will reach the tipping point and most items will be tagged. Then, and only then, will retailers be able to deliver on their omnichannel promise. Retailers, if you think consumers demanded control on when, where and how they shopped this year, just wait until the 2015 holiday season.

Bill Hardgrave is the dean of Auburn University's Harbert College of Business and the founder of the RFID Research Center. He will address other RFID adoption and business case issues in this column. Send your questions to hardgrave@auburn.edu. Follow him on Twitter at @bhardgrave.

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