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Dillard's Gears Up for Item-Level Pilot

The retailer is working with a jeans manufacturer that will apply tags to individual garments and ship them to a store in Dallas.
By Mary Catherine O'Connor
Aug 22, 2007Bill Holder, CIO of Dillard's, a major, family-owned retail chain with 330 stores across the United States, has done his RFID homework. Since 1992, he and his team have been looking at ways the retailer might use RFID for product tracking, and last year the company ran its first technology trial. Armed with research that shows using RFID could help the company achieve cost savings and increased revenue over time by reducing labor, decreasing shrinkage, improving sales and streamlining inventory processes. It's now gearing up for a pilot project in which it will work with a major denim-clothing manufacturer to track its product from the point of manufacture to the point of sale.

During his keynote address Tuesday at the RFID Journal—AAFA Apparel & Footwear Summit held in New York, Holder spoke on a wide range of topics related to RFID and its business applications and concerns around launching the technology in a retail environment.

The company conducted its first RFID technology trials starting in August 2006. During these tests, it placed passive UHF EPC Gen 2 tags on a total of 250 different items. Dillard's ascertained the readability of the tags using both handheld interrogators and ones mounted on mobile carts. "The results were mixed, but good enough to keep us looking at RFID," Holder said.

Holder and his team then worked with the University of Arkansas RFID Research Center to test the readability of EPC Gen 2 tags attached to cases of goods moving down a conveyor system at up to 650 feet per minute. One hundred percent of the tags could be read at that speed, Holder said.

In March of this year, Dillard's began a pilot project that tested EPC Gen 2 tags attached to the secure, reusable plastic totes it uses to ship small high-value items, such as jewelry, from its distribution centers to retail stores. The pilot involved one DC and store, and showed that the technology performed extremely well, with 100 percent of the tags attached to the totes being read at both the DC and the store. The pilot also showed that the associates’ scanning rate on the dock for the bar code labels attached to the same totes was lower, probably because the secure totes contain smaller cartons that are scanned once they are brought out to the retail floor. But Holder said the pilot showed how RFID could be used to automate processes and potentially reduce human error.

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