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Momentum Is Growing for Item-Level Tagging, Survey Says

The Aberdeen Group finds that 57 percent of retailers using or planning to deploy RFID prefer to employ the technology at the item level, and that many are utilizing the technology to improve inventory accuracy, as well as for a range of other applications.
By Claire Swedberg
The Best-in-Class respondents, two-thirds of whom are already employing RFID, were those that have undertaken specific strategic actions to integrate RFID data with other business processes, and that measure performance of an RFID system by calculating the cost versus benefits of RFID against alternative solutions, and by comparing the accuracy of manual inventory tracking to RFID. The Best-in-Class companies were also more likely to place a high priority on adhering to industry standards such as Electronic Product Codes (EPC) and EPC Information Services (EPCIS), and were more likely to monitor the compliance of their RFID initiatives with government and trading-partner mandates.

Because technology costs have dropped, Klein says, respondents indicated they selected their technology vendors based on the capability of a particular vendor's RFID solution to integrate with other applications, as well as that firm's success in similar projects, more than on the price of the hardware or software involved in their deployments.

In the Aberdeen report, Chuck Lasley, the director of merchandising and supply chain applications at Dillard's, summed up the results of a University of Arkansas study of an RFID pilot the retailer carried out in 2009 (see Dillard's, U. of Ark. Study Quantifies RFID's Superiority to Manual Inventory Counts), noting, "We found inventory accuracy of our pilot merchandise could improve by 17 percent in our pilot stores using either barcode scanning or RFID. But we timed individuals doing the activity. It took me 10 minutes to do an RFID cycle count while it took a team of five employees using barcode scanners three hours and 45 minutes collectively." He added that, "There was a 96 percent time savings in cycle count with improved accuracy using RFID. This could enable more frequent cycle counts and inventory adjustments."

Of the Best-in-Class responders, 22 percent indicated they are currently utilizing item-level inventory tagging, while 18 percent plan to implement it within 12 months (though they did not indicate whether they would be implementing item-level inventory tagging for the first time, or whether this planned implementation was an expansion of a previous item-level inventory-tagging deployment), and 32 percent plan to implement item-level tagging more than 12 months from now. Seventeen percent reported they were using handheld RFID readers, 24 percent plan to do so in 12 months, and 40 percent intend to utilize handhelds beyond that point.

Just as interesting, Klein says, is the finding that retailers have begun leveraging their item-level RFID deployments to do more than conduct inventory and prevent out-of-stocks. Fourteen percent of the Best-in-Class responders said they have deployed RFID-enabled information for price or product information checking, with 5 percent intending to do so in the next 12 months; 10 percent of the Best-in-Class group indicated they have deployed RFID-enabled self-checkout systems, with 5 percent planning to do so in the next 12 months; 10 percent have deployed RFID-enabled electronic article surveillance (EAS) systems, with 14 percent intending to do so in the next 12 months; and 5 percent deployed RFID-enabled fitting rooms, with 14 percent planning to do so in the next 12 months.

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