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Closing the RFID Knowledge Gap in Apparel and Footwear

At current price points, RFID makes an excellent fit for apparel and footwear retailers.
By Marshall Kay
May 14, 2007Two questions I am frequently asked regard how far RFID has advanced in apparel and footwear, and when it will really explode. I have always maintained that item-level RFID will move only as far as retailers choose to take it. Today, my opinion remains unchanged.

Britain's Marks & Spencer continues to march forward with item-level RFID. The company is tagging a range of garments—from suits at the high end to jeans and intimates on the low end. Garments costing under $15 now bear tags, and this floor continues to drop steadily. I estimate their overseas suppliers have now applied paper RFID hangtags to more than 60 million garments, and I expect them to eclipse the 100 million mark sometime in 2007. By that time, Marks & Spencer will be using RFID to manage inventory in 120 stores, representing virtually all of its apparel business.


These impressive statistics obscure one important fact: Here we have a major retailer extending item-level RFID to dozens of its overseas suppliers, yet most of the leading American vertically integrated specialty retailers decline even to attend educational sessions where end users share advice about how best to deploy RFID. If this were a locomotive, I'd say there was a lot of room between the engine and the caboose.

Although seldom reported publicly, item-level deployments are consistently generating sales lifts of 10 percent and higher—in certain cases, topping 20 percent. These gains will only rise as retailers extend their proficiency with these inventory management tools and begin tapping into a broader range of retail RFID applications, including "magic" mirrors and other customer-facing selling tools (see Magicmirror Could Assist Retail Customers).

What, then, does Marks & Spencer know that the majority of retailers and Wall Street soft-goods analysts do not? Better yet, how much sales lift do the skeptics need to see and believe before they're willing to give RFID its due? I'd wager that when Marks & Spencer pays to have its $15 brassieres tagged, it does so in the belief that this will be a moneymaking proposition.

So what should retailers of apparel and footwear do? To begin with, plan on sending representatives to this August's RFID Journal—AAFA Apparel & Footwear Summit. Do not simply send people from your IT department—professionals from store operations, supply chain, operations, global sourcing and loss prevention should also attend.

A cross-functional team should be assembled well in advance of the conference, with a clear mandate to actively investigate. Begin digesting the case-study data, not only from apparel and footwear but also other retail sectors. RFID industry insiders can direct you to the most relevant information. Focus on item-level deployments, since this is where your payoff will be quickest and greatest. Then schedule site walks at one or more of your stores or DCs with a trusted consultant or vendor. By the time the Apparel & Footwear Summit rolls around, your team should already be thinking about where and how they would deploy RFID, not simply whether or not to deploy it.

Marshall Kay is the North American RFID practice leader at global management consulting firm Kurt Salmon Associates.
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