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RFID Boosts Store Turnover by Nearly 10 Percent in Italian Pilot

A study conducted by the University of Parma's RFID Lab, working with a retailer, apparel suppliers and logistics providers in Italy, reveals significant benefits throughout the supply chain.
By Mark Roberti
The software provides employees with a dashboard showing, in real time, which styles, colors and sizes need to be replenished when some of those items are stocked in the back room but there are none on the sales floor. The system determined what needed to be replenished, by combining RFID data from the inventory counts with sales data acquired from the RFID reader at the checkout counter. Store associates were trained to print a list of items to be replenished each morning. The system then tracked when the list was printed, along with the time that those items were moved from the back room to the sale floor.

"Without RFID, it would be a full-time job to find which sizes and colors have to be replenished," Rizzi states. "With RFID, we could track precise inventory levels for the back room and for the sales floor, and know when items were replenished."

The team cross-checked the replenishment data—items read at the Impinj reader by the entrance to the sales floor—with reads at the checkout counter, in order to determine how many of the replenished items were sold. According to Rizzi, the replenishment list was printed 18 times from June 12 to Aug 31, and nearly 90 percent of the items that workers replenished during that period were sold. The additional sales amounted to approximately a 10 percent increase in total store turnover.

"Since the store was not replenishing items daily, it is clear that almost all of the increase in sales was due to the use of RFID," Rizzi notes. "The companies involved were impressed, and have decided to continue the pilot to track sales during the fall/winter season. Benetton will also participate in the next phase."

Rizzi will present additional details about this project at RFID Journal LIVE! Europe 2010—to be held on Nov. 2-4, in Darmstadt, Germany—during a breakout session scheduled for Nov. 3.

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