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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
Turnover Increase
The researchers and end users involved in the project decided not to determine the sales increase resulting from using RFID by comparing sales with a control store, as they felt sales could be affected by a wide variety of variables that could not be controlled, such as weather and location.

"We all agreed that RFID helps to boost sales by reducing the number of times that customers enter the store and can not find the item they like in the right style, size or color," Rizzi says. "For every customer that asks for a different style or color, at least 10 leave the store without buying. And when a customer asks if a different size or color is available in a style they like, the shop assistant is not always able to answer in a reasonable time."

So the team engineered two applications to improve on-shelf availability. The first is designed to provide sales associates with the information they require in order to answer a customer's question. If a shopper requests a particular style in a different size or color, the sales associate can wave the garment in front of the fixed reader installed near the back-room doorway, and the system will show that worker, on a touch screen mounted by the door, the different sizes and colors for that same style available in the store, as well as in the back room. If the customer wants, for instance, the same style of an outfit, but in blue, the associate can load the unique serial number of the blue version in a Psion Teklogix handheld RFID-enabled handheld computer, to quickly locate it in the back room.

"To assess the impact on sales, we tracked the use of this application, and cross-checked it with checkout data," Rizzi explains. "The application was used more than 300 times over a period of about three months, and we found that about one-sixth of those items wound up being sold, which corresponded to about a 0.4 percent increase in total sales for the store."

The team also developed a replenishment application that helps store associates maintain an assortment of all top-selling styles, colors and sizes on the sales floor. Hot-selling items are often sold and then not quickly replenished from the back room, resulting in customers entering the store, failing to find the item they want and then leaving without asking if it is available, and thereby resulting in a lost sale.

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