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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.
By Mark Roberti
Jun 15, 2009I 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.

The only time RFID needs to be perfect is when a financial transaction is involved. And in those cases, it is perfect. A few years ago, I visited TransCore's test facility in Albuquerque, N.Mex. The company has a test track where cars and vans of difference sizes zip around a track to test the reliability of its toll-collection systems. As far as I know, these systems work flawlessly. Exxon Mobil's Speedpass and MasterCard's PayPass work perfectly as well.

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.


Chris Hook 2009-06-19 08:15:46 AM
People, Process, Technology Mark, You make some excellent points in your Editorial Note. However, you could have expanded your argument to the more general case to state that no data capture system is "perfect", and that your argument is not confined to retail operations; yet the nature and precision of data relating to inventory (count, locations, additional meta-data) continues to increase, and the ease (degree of automation) and accuracy associated with such data capture exercises has improved dramatically this century as a result of multi-faceted technology innovations. Lastly, never forger that there is always an essential need to strike the right balance in the people, process, technology mix that constitutes the implementation of any AIDC solution. What we observe is an increasing reliance on the technology component of this equation, but it would be foolish to ignore the requirement for rigorous processes, both as a matter of routine operations and of course exceptions handling. Best regards, Chris

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