Retailers Cite RFID in Year-End Financial Reports

By Mark Roberti

American Apparel and Sears are two companies that have let shareholders know they are investing in radio frequency identification.

I am often asked when radio frequency identification will take off, and I like to respond, "Once companies start mentioning, in their financial results, that profits are higher due to the technology." When that happens, I explain, Wall Street analysts will begin asking other CEOs whether they are employing RFID—and, if not, why they aren't—and we will see CEOs start signing off on RFID projects.

We are not there yet, but we might be getting close. In its financial report about its 2012 fiscal year, specialty apparel chain American Apparel wrote, "...We will continue to wisely invest in technology and processes in order to continue to improve efficiency. As of the end of February, we have implemented radio frequency identification (RFID) in a total of 213 stores, fully implemented a workforce and labor schedule optimization system in our retail and manufacturing locations, updated our production forecasting and allocation systems and enhanced our online web store capabilities with implementation of Oracle ATG Web platform. We expect further benefits from these investments in the near term."

In addition, the company reported that capital expenditures during 2012 rose to $21.6 million, up from $11.1 million in 2011. "The increase in 2012 was primarily due to investments in our new distribution center in La Mirada, California, implementation of our new Web platform, Oracle ATG, and continued implementation of RFID tracking systems at our stores," the company wrote, adding, "We expect to substantially complete implementation of RFID at all our stores in early 2013."

In Sears Holdings' year-end report, the company's chairman, Edward S. Lampert, wrote: "While we invest in these key strategic areas, we will also look at other areas to become more efficient and repurpose resources consistent with the mission we have outlined. We will invest our resources where we can create competitive advantage and look at areas much more openly where we have not been able to compete effectively. We will also continue to work on LEAN initiatives to streamline the operational processes and systems, and at the same time continue to test and learn with technologies such as Digital Signs and RFID, so our associates can spend less time in the backroom and more time on the floor serving members."

Seems to me that RFID is no longer a dirty word. It's only a matter of time before CEOs start attributing better results to RFID investments.

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on
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