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Staples Business Depot Sees Positive Results from Active Tag Test
Although the Canadian company found that the RFID system slashed out-of-stock levels and increased sales, it has yet to determine whether those benefits outweigh the costs of deploying the system chain-wide.
Oct 19, 2007—Since May, Staples Business Depot, the 270-store Canadian unit of Staples Inc., has been tracking the location and number of roughly 1,500 stock-keeping units (SKUs) at one of its Montreal retail locations. To do this, the retailer has been using IntelliTracker active RFID tags and readers, a proprietary system made by RFID systems provider AbsoluteSky (see Staples Testing Active RFID for In-Store Tracking, Security). Fujitsu Transaction Solutions provided installation and integration services for this platform.
The use of RFID has eliminated theft, slashed out-of-stock levels and increased sales of tagged items, says Joe Soares, Staples Business Depot's director of process engineering. According to Soares, the system has proven itself from a technical standpoint. However, he says, the company is still evaluating the business benefits it could accrue from rolling out the RFID solution across its stores on a permanent basis.
"There was no shrinkage on the tagged items during the trial," Soares explains. Although the tag would have triggered an alarm if someone had tried to exit the store with a tagged item that had not been paid for, no alarm events occurred during the pilot, and no tagged items left the store unsold. Soares, therefore, believes the mere presence of an IntelliTracker tag might have served as a theft deterrent.
Eliminating shrinkage, however, is just one of the RFID system's many paybacks. The staff employed a network of fixed-position IntelliTracker readers located throughout the store to maintain an ongoing inventory of tagged items, and used these number each night to correct any variances in the store's inventory system. For example, if the Staples system indicated there were five of a given MP3 player or laptop in the store, but the RFID-based inventory showed six of that item, the store's system was adjusted accordingly. The pilot store has seen a sales lift in the tagged items, compared with comparable products not tagged, and Soares attributes this to the fact that the staff had accurate inventory numbers for the tagged goods.
More accurate inventory levels provided another trickle-down benefit as well, Soares says—they led to more accurate product ordering for the tagged items. As a result, he claims, the store saw a 21 percent reduction in instances of tagged items falling out of stock, as compared with before such items were tagged. Staples also found that tagged SKUs sold better than those not tagged—likely due, he says, to greater product availability within the store.
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