Which Items Should We RFID-Tag?

If we deploy RFID at our department store, would we be required to allocate unique ID numbers to each and every article? At this moment, we maintain common EANs for articles that are similar in nature.

—Pradeep

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Pradeep,

That's a great question. Most retailers are deploying RFID on specific categories of items and expanding when it makes sense to do so. There are generally three ways of prioritizing which items to RFID-tag.

1. Items with complex stock-keeping units. When you have similar items with a variety of colors, sizes and styles, it is difficult to keep items of every size, color and style on the shelf at all times. Consequently, sales are lost when a customer comes in and finds the style and color they want, but not the size, or the size and color, but not the style. RFID technology allows the retailer to take inventory regularly and ensure that it always has the right sizes, colors and styles on the shelf. This boosts margins because you sell more items at or near full price. Some items commonly tagged first include bras (which come in many different sizes and styles) and jeans (which have different waist sizes and inseam lengths).

2. Items that are often stolen. Electronics and jewelry are often kept in cases, but these items can be stolen when shipped from a warehouse to a store, when they arrive at the store, and when they are removed from cases to be shown to a customer. By tagging these items, companies can monitor how many leave the warehouse, how many arrive at the store, and how many are put in cabinets, either in the back room or at the store front. RFID-enabled locks can be used to require staff members to utilize an RFID-based employee badge to open a cabinet. This enables the retailer to record who removed an item, which cuts down on theft. Readers at the counters on the floor monitor when items leave the area before being paid for.

3. Items that sell quickly and thus are often out of stock. By tagging such products, companies can monitor when stock levels are getting low and can then replenish them more quickly and effectively, which helps retailers avoid losing sales due to out-of-stocks.

The downside of tagging some categories of items and not others is that you need to employ two different inventory-taking processes. For the RFID-tagged items, you might send employees to the stock room or the store floor once a week to count inventory. This is not feasible with bar codes, because taking inventory with bar codes is slow and labor-intensive, so you might take inventory of bar-coded items once every six months or so. This requires workers to be aware that they have to perform two different kinds of inventories. But the benefits of using RFID on the items above are so huge that it is worth doing it this way. As RFID costs come down, it will make sense to eventually tag all the items in your stores.

We will have several retailers speaking at this year's RFID Journal LIVE! Europe conference, so that would be a good opportunity for you to learn from those who have already made decisions about which items to tag.

—Mark Roberti, Founder and Editor, RFID Journal