Word Is Getting Out About RFID in Retail

By Mark Roberti

Forbes, CNN, and many newspapers and business journals are covering deployments at Macy's and J.C. Penney, showing that the mainstream media finally understands the technology's value.

There's an old philosophical thought experiment that asks, "If a tree falls in a forest and no one is around to hear it, does it make a sound?" Similarly, many in the radio frequency identification industry have been wondering, "If a retailer deploys RFID and gets a lot of benefit, but no one knows about it, does it change anything?"

I don't know the answer to the second question (the first answer, you might be surprised to hear, is "no"), but I do know that businesspeople outside of RFID Journal's knowledgeable readership are starting to hear about the benefits of RFID in retail. Recently, Forbes wrote an article titled "Macy's Wins With Technology."




The Forbes article discusses the use of RFID in the Macy's Herald Square store, which is getting a $400 million facelift: "[RFID] is going to be up and running this fall when the new 63,000-square-foot shoe department opens in the Macy's Herald Square store... The first phase launches in August 2012 with 300,000 pairs of shoes for sale on any given day. RFID will make it much easier to track such a large quantity of shoes and, importantly, make it possible to serve the customer faster and more efficiently."

The article explains that after shoes, Macy's plans to tag basic items that always require replenishment, as opposed to fashion items that are sold and never replenished: "About one third of the full replenishment assortment at Macy's will be on RFID," the author writes. "As a result, merchandise in stock levels will rise and customers will be happier. For example, in shoes, inventory will be monitored by size, width and color, and eventually, polo shirts will be monitored by color and size. The cost of RFID technology and the chips on each garment have come down dramatically in price, making it possible for Macy's to take this first step."

The Forbes article adds that "a second step will allow sales associates to improve their customer service by finding wanted merchandise in other Macy's stores and having it sent it directly to the customer's home. This fits with Macy's omnichannel strategy that integrates stores, Internet and mobile devices into one seamless shopping experience. By the end of this year, the goal is to enable sales associates to sell any product that may be out of stock, either locally or in the fulfillment centers, by drawing from store inventories nationwide."

RFID Journal has already covered the deployment (see Macy's Inc. to Begin Item-Level Tagging in 850 Stores). But it's great to see the story being discussed in the mainstream business press, because that will encourage more retailers to explore RFID's benefits.

It's also encouraging to see the mainstream media covering J.C. Penney CEO Ron Johnson's comments at the Fortune Brainstorm Tech conference, held last week in Aspen, Colo. Johnson told Fortune magazine's senior editor, Jennifer Reingold, that the retailer plans to begin placing tags on 100 percent of its merchandise this year. In 2013, he disclosed, the company expects to employ the technology to help it transform the way in which shoppers purchase goods at its 1,100 stores.

Many newspapers and business journals picked up the story. For RFID Journal's coverage of his comments, see J.C. Penney CEO Predicts RFID Will Help Create a Transformational Shopping Experience.

J.C. Penney plans to accomplish something that no other retailer has ever "done completely" before, Johnson said. "We are going 100 percent RFID with ticketing this fall. So February 1st next year, the entire Penney's platform will be on RFID tickets."

According to Johnson, 10 percent of all the money J.C. Penney spends—half a billion dollars annually—goes to transactions. By using RFID technology to eliminate point-of-sale machines and labor, the retailer can channel that labor toward improving customer service and the customer experience.

"When you go to the Apple store, you feel the people, the connection," Johnson said. "When you go to most retail stores, all you see is people doing work to execute the retail strategy. It is stocking shelves and transacting business. That is all going to change because of how we use Wi-Fi, RFID and mobile checkout... We're going to rollout self-checkout, and it's really cool and it's really easy because it's RFID-based." (You can watch a video of the discussion between Johnson and Reingold on CNN's Web site: J.C. Penney Killing Checkout Counter by 2014.)

If Macy's and J.C. Penney roll out these RFID solutions as planned, they will have a big impact on retailing. The mainstream media will write about the business benefits, and that will cause more retailers to pay attention—and, perhaps, push those that have been reading RFID Journal and exploring RFID's potential to take the next step and roll out a solution. Unlike that proverbial tree in the forest, these deployments will likely make some noise.

P.S.: If you are wondering why the tree makes no noise, it is because when it falls, it creates mechanical waves—oscillations of pressure—that are transmitted through the air. The waves impact our eardrum, and the vibrations travel though the middle-ear bones to the inner ear, where they are converted into electrical impulses that our brains interpret as sound. If there is no brain present to do the interpreting, then all you have is mechanical waves. And you thought I only knew stuff about RFID!

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog, the Editor's Note archive or RFID Connect.