7 Things Your Boss Wants to Know About RFID
Maybe your boss still prefers manual inventory tracking or using other options that have worked for your company in the past. Whatever the case, with strong ownership and RFID supply chain knowledge, you can show the higher-ups specific reasons why the world’s most successful retailers are tracking their inventory with RFID systems. Here are the top 7 things your boss wants to know about RFID:
1. Do we really need RFID?
Without an accurate, up-to-the-minute view of current stock levels, retailers find themselves with bloated inventory levels in back stocks and numerous out-of-stock situations on the sales floor. A recent retail survey of 5,000 consumers from the United States, United Kingdom, France and Germany suggests retailers really need RFID, especially with the pressure for omnichannel retail solutions.
2. Can RFID help with retail shrink?
The mere presence of RFID has a significant impact on shrink. Real-world applications of RFID in the supply chain demonstrate that the increased accountability provided by this technology results in a reduction in shrink, particularly with regard to losses due to internal theft. In fact, after implementing SML’s Clarity® RFID solution for item-level tracking, global specialty apparel retailer American Apparel reported a reduction of more than 50 percent in shrink.
3. Can we eliminate third-party inventory audits?
Implementing RFID tracking provides company executives with greater assurance that reported inventory is both timely and accurate. With inventory accuracy at or above 98 percent, management can eliminate third-party audits with confidence. After all, it doesn’t make sense to pay a third-party firm to conduct manual audits once or twice yearly when store associates can quickly get a more accurate count with RFID whenever needed.
4. What’s the return on investment for RFID in retail, and where does it come from?
The bottom line for retailers is sales, so when American Apparel saw a sales lift ranging from 3% to over 10% after RFID was fully implemented, the return on investment was proven. Sales lift for American Apparel came primarily through better inventory management—i.e., more timely replenishment and the reduction of out-of-stocks. Some other surprising benefits contributing to the positive ROI included the aforementioned reduction in internal shrink as well as reduced inventory levels in backstock, leading to more efficient space utilization and higher SKU density on the sales floor.
5. How much will our current operations and infrastructure be disrupted?
Firstly, deploying a solution like SML’s Clarity® doesn’t require you to implement all-new backend systems to start reaping the benefits of item-level RFID. Good RFID software should integrate with existing systems to extend their usefulness to the item-level realm, enhancing systems and making them better—not replacing them.
The disruption from tagging products with RFID can be minimized by selecting a tag provider that can partner with you to ensure the right kind of tag is shipped to (and from) the optimal location for tags to be placed on your inventory with minimal cost. There are a plethora of viable solutions and it can get quite complex, so selecting the right tag provider is crucial to success. When you do have the right supplier, however, RFID tagging is not much different than regular tagging.
6. How do we get started with item-level RFID in our stores and supply chain?
Retailers can quickly and efficiently deploy tagging programs with bundled solutions, including RFID tags, software, hardware and associated services. An RFID inventory management solution such as Clarity® enables retailers to utilize existing mobile devices and the power of cloud computing to reduce costs and setup time while leveraging existing infrastructure and hardware. Very often we see retailers capture significant value using little more than two handheld readers per store to begin addressing inventory accuracy.
7. Will our employees want to use the RFID retail inventory management system?
Implementing an item-level RFID system makes employees’ lives easier and more productive, freeing them up to engage with customers by eliminating the tedious and mundane task of manual inventory counting. In addition, the stress of not knowing where an item is located, or whether it is even in stock, can be eliminated. This results in a motivated, happy workforce ready to focus on customer service – an added bonus in addition to the other benefits of reducing out-of-stocks and overall inventory levels, improving omnichannel fulfillment reliability, and reducing shrink due to theft and loss.
To learn more about SML RFID and its leading item-level RFID application Clarity®, visit us at sml-rfid.com. If you have questions regarding things your boss wants to know about rfid, please feel free to contact us.