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The Myth of Perfect Read Accuracy
Retailers don't need to read every tag, every time, in order to gain business benefits from RFID. Those who think they do are missing the point—and perhaps a big opportunity.
Jun 15, 2009—I spoke at the recent U-Connect conference hosted by GS1, offering the audience an overview of radio frequency identification adoption around the world, as well as in different industries. After my presentation, a gentleman from a well-known retailer came up to me and rather sternly asked, "Can you guarantee that I will be able to read every tag, every time?" I told him that I could not, nor could anyone else. "Then this technology is useless in retail," he said. "How can we manage our business if we are always not accounting for some of our inventory?"
For a moment, I reacted with a stunned look. After recovering, I replied, "But that's what you're doing now." He didn't understand, so I pointed out that he's currently not accounting for every item in his store's inventory. In fact, the inventory counts in his store are probably only about 65 percent accurate. But he continued to insist that RFID needed to be perfect before it could be deployed in a retail setting.
Reading tags on products or assets, in most cases, is a different matter. RFID doesn't need to be perfect. It simply has to deliver a return on investment (ROI) that is compelling enough to warrant adoption. Does it do that? American Apparel, Charles Vögele and other retailers have found it does (see Charles Vögele Group Finds RFID Helps It Stay Competitive and American Apparel Makes a Bold Fashion Statement With RFID)—and the reason it does is that retailers have great difficulty keeping track of their stock.
Bill Hardgrave, director of the University of Arkansas' RFID Research Center, will present aggregated data at our RFID in Fashion 2009 event (being held in New York on Aug. 12-13), illustrating that overall in-store inventory accuracy is off by 35 percent. RFID can help bring that level up to 98 percent or 99 percent—and at the conference, we'll demonstrate how. Yet, the retailer at U-Connect was more worried about the few items RFID can't read, rather than the fact that his inventory accuracy is appallingly low today and would be much better with radio frequency identification.
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