A small tag is having a big impact on sales at one high-end department store.
The retailer recently deployed radio-frequency identification at six U.S. stores to track inventory on shoe displays. The technology led to an increase in sales by ensuring all shoe styles were always on display, the store reported.
This technology is still a bit pricey. That means RFID isn’t a great idea for a 90-cent can of peas with a profit margin of 25 cents. But for big-ticket items, it absolutely makes sense and will add efficiencies to the supply chain that will be unprecedented.
RFID will reduce shrink by allowing retailers to track every product in the supply chain. Want to know where that clothing on a boat from China is located? RFID will give you its latitude and longitude.
And it will get better as technology improves and becomes more affordable. So retailers better start embracing it.
The retailer estimates that the company could see a multimillion-dollar increase in shoe sales if all of its 47 stores were able to improve inventory counts through RFID technology.
“We are leveraging the basic premise that if you know where the merchandise is, you can get more sales,” said Dan Smith, the retailer’s CIO, in an article in RFID Journal. “If you are able to take inventory every night, or a subset of inventory every night, there is a pretty high payback.”
Source: RFID Journal, November 2011