What type of return on investment does the technology provide?
The return on investment can vary greatly, depending on how RFID is used. Generally speaking, the ability to take inventory extremely quickly allows personnel to do it more often than can be accomplished with bar codes, and also improves on-shelf availability—which leads to more items being sold at or near full price.
RFID Journal developed a retail apparel ROI calculator that allows retailers to estimate the potential ROI. You can input the number of stores, items or terms, the average selling price or margin, or other variables. The calculator makes some assumptions about the labor required to take inventory more often, as well as the RFID system’s cost and the potential improvement in sales and margins that one can expect due to higher on-shelf availability. You can adjust these up or down accordingly (we tried to be conservative).
You can download the PDF that explains the assumptions and how to use the calculator by clicking on this link. Contained in the PDF is a link to the Microsoft Excel spreadsheet that serves as the calculator.
—Mark Roberti, Founder and Editor, RFID Journal
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