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Study Finds Value for RFID in Visual Merchandising

Seeking to learn how RFID can benefit retailers beyond inventory management and store shelf replenishment, the University of Parma has released the results of a study that used RFID to investigate how well merchandise performed in specific store display areas.
By Claire Swedberg
Apr 02, 2018

With radio frequency identification deployments tracking retailer inventory and out-of-stocks on display shelves, some in the RFID industry are wondering where the next level of benefit for the technology may come from in retail. The RFID Lab at the University of Parma has released the results of a 12-month study that investigated the impact RFID technology could have on store sales by providing visibility into how well merchandise performs at specific store display locations.

With the technology, university researchers and an Italian men's clothing retailer tracked what was displayed in each area of a store, and then compared the net profit of the sale of each piece of merchandise against the cost of displaying that item. The retailer has asked to remain unnamed.

Antonio Rizzi
The study, led by the university's RFID Lab, examined how RFID tag reads, as well as the data culled from those read events, could enable stores to optimize their merchandizing in the store, map out floor performance and boost sales as a result. In fact, the test-site stores, using the RFID data to better manage their displays, saw about a 3 percent increase in sales over expected sales, says Antonio Rizzi, a University of Parma supply chain management full professor, and one of the study's co-authors.

Not all parts of a store are created equal, Rizzi says, and understanding how that space should be used can make a large difference in a store's sales numbers. He notes that retailers can view the sales floor as a valuable space being rented by the merchandise on display. Every items needs to generate sufficient revenue to pay for the cost of the space it occupies, while still providing a profit. "RFID is an enabler," Rizzi states, "to give the visibility to understand what is worth displaying in a specific location and what is not."

Visual merchandising is an important science, according to the study's authors, since it can directly determine the rate of sales. They note that impulse buying in apparel and fashion is based on an attractive product display. Stores cannot always easily measure the effectiveness of their display, however. Simple sales results do not enable the breaking down of each display's effectiveness.

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