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Sales Are Up and Overstocking Is Down, Study Reports, Due to RFID Use in Stores

A University of Leicester study involving 10 participating retailers, sponsored by GS1 UK and the ECR Community Shrinkage and On-shelf Availability Group, found that all companies realized a return on investment, with sales boosted by between 1.5 and 5.5 percent.
By Claire Swedberg
Feb 27, 2018

Radio frequency identification is delivering a boost in sales for retailers by an average of 1.5 to 5.5 percent, while increasing inventory accuracy by about 20 to 30 percent, according to a new study coming out of the United Kingdom. But challenges remain for RFID-enabled retailers when it comes to establishing and measuring Key Performance Indicators (KPIs).

Those are some of the findings of a recent study that focused on RFID adoption worldwide in the retail market. The study, titled "Measuring the impact of RFID in Retailing: Key lessons from 10 case-study companies," was conducted late last year by Adrian Beck, an emeritus professor at the University of Leicester, with sponsorship from the ECR Community Shrinkage and On-shelf Availability Group (a retailer and manufacturer working group) and standards organization GS1 UK.

GS1 UK's Jacky Broomhead
All ten retailers that participated in the study reported that they realized a return on their RFID investment. Half of the participants shared their data regarding the overstocking of goods or "stock holding" to ensure products do not go out of stock, which they said was reduced by between 2 and 13 percent.

Beck conceived of the study and also went on to conduct and author the research. He says he undertook his first study RFID use cases in retail in 2002, when retailers were still learning about this somewhat-new technology. At that time, he notes, "We were still looking at the potential for RFID."

After the 2002 report was released, there was a lull in RFID interest, during which Beck worked on other projects, but he decided to revisit it in 2017 after attending last year's RFID Journal LIVE! conference and exhibition. "I went away from that and wrote a research proposal," he says, based on indications that RFID adoption had matured considerably since 2002. The 2017 study took advantage of data and real-world knowledge that was unavailable 15 years earlier. "This study was much more grounded in experience and evidence," he states. "I was interested in understanding what kind of journey these companies [retailers] had been on."

The recent study involved 10 retailers that shared their experience with RFID. All 10 companies indicated that they had gained a return on their investment and that the deployment was fully justified by the returns. Most said they launched their RFID programs to improve inventory accuracy, according to Jacky Broomhead, GS1 UK's market-development manager for apparel, footwear and accessories. "Many saw the use of RFID as a competitive advantage," she adds.

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