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Macy's Inc. to Begin Item-Level Tagging in 850 Stores

The company plans to RFID-enable its Macy's and Bloomingdale's stores in 2012, and will tag garments most often replenished—accounting for about 30 percent of the retailer's sales.
By Claire Swedberg
To ensure that the replenishment items received at its DCs and stores are tagged, Macy's Inc. is working with its suppliers to aid them in transitioning to applying RFID labels to products at the time that the goods are manufactured or packaged. According to Connell, the company advises that the best approach may involve applying an RFID tag in place of the current price label attached to each garments or its packaging. At present, he says, no suppliers are attaching RFID tags to products destined for Macy's or Bloomingdale's. However, most supplying the replenishment items, such as undergarments, will begin applying tags by the end of next year. Macy's intends to assist with any issues that could arise for suppliers as they make that transition, Connell says.

The timing is right for the item-level tagging plan, Connell says, since the technology has been proven through his company's testing, as well as during other case studies conducted by the University of Arkansas. "The technology is ready, the hardware is working well, the pilots have taken place," he states.

The retailer has been working with the Voluntary Interindustry Commerce Solutions Association (VICS) since 2010 to develop the collaborative adoption of standard practices for item-level tagging (see VICS Item Level RFID Initiative Enters Phase II). Connell serves as a co-chair of VICS' Item Level RFID Initiative (VILRI) communications and outreach committee.

With the use of RFID, Connell says, customers will also benefit by being able to purchase the particular size and color of a product that they seek. "When you're in stock, the customer is better served," he states, noting that suppliers will benefit as well, since they, too, will be able to ensure that their products are on the sales floor in the sizes and colors that shoppers need.

Macy's Inc. reports that it is focusing on using RFID only for inventory cycle counts, and only on replenishment items, with no immediate plans to expand to other products or other applications the technology. That, Connell says, is necessary to ensure that RFID's adoption is managed smoothly across the company's enterprise.

Technology vendors—such as tag and hardware companies, as well as software providers—have yet to be determined, Connell says.

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