Fortune Highlights the Value of RFID to Brick-and-Mortar Retailers

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The mainstream business press hasn't quite caught up with the reality that radio frequency identification technology has matured and is delivering benefits to companies in every industry and in every corner of the world. But that might be changing. A recent article posted on Fortune's website explains that Macy's and other brick-and-mortar retailers are using RFID
to compete more effectively with online retailers, such as Amazon.com (see Can RFID save brick-and-mortar retailers after all?).

After explaining that the early promise of transforming Walmart's supply chain didn't pan out, the article says: "Today, RFID has landed a high-demand job: Helping retailers become more competitive with online sellers, through 'omnichannel' sales—closing a sale on the buyer's terms, whether in the store, on the Web, using social media, or through some combination of those channels. "

Bill Connell, Macy's senior VP of logistics and operations, is quoted as saying "RFID enables frequent [inventory] counting, which enables inventory accuracy. You can't be great at omnichannel without having high confidence at the store level, at the size and color level. "

Connell goes on to explain: "You can count [inventory] once or twice a year with bar codes with limited accuracy, because the person can be distracted, or scan the same code twice. We can count up to 24 times a year using RFID. It just enables us to keep inventory accuracy in the high 90s [in terms of percentage]. "

The article, written by former RFID Journal reporter Mary Catherine O'Connor, says Macy's is asking more suppliers to start delivering tagged apparel items. It points out that while Walmart began by using RFID in the supply chain, retailers have now learned the real benefit is in the stores.

"A warehouse can be Six Sigma, but [inside] a store is No Sigma, " the article quotes Bill Hardgrave, dean of Auburn University's College of Business, as saying. "Stores are chaotic. The processes are not repetitive; customers don't behave the same way every day; the weather isn't the same every day and that impacts buying patterns. So this is where RFID has the most value. "

It's great to see mainstream business publications explaining to retailers where the benefits are.

Last update: Jul 25, 2016

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