The use of radio frequency identification in the retail market is far from a new concept, but one reported incident at this year’s National Retail Federation (NRF) Big Show in particular caught our attention. Jordan Lampert, COO of Truecount, a ThingMagic partner offering software solutions for mid-sized retailers, was approached at their booth at NRF and offered a cash deposit by the CEO of a nine-store East Coast shoe chain. The executive’s request? For Truecount to send a team out to begin deploying an RFID system for them immediately!
If you’ve attended NRF in New York City before, you’ll know that RFID has been a topic of conversation there for years – but for the most part, retailers haven’t been lining up with bags of cash in hand to put down towards implementing a system. Retailers who’ve already taken advantage of RFID systems are now able to show the fruits of their investment, while retailers who haven’t are unveiling plans to deploy the technology and admitting they’re behind the curve. This year, the focus of the NRF Big Show remained on store-level inventory and POS deployments, with mobile developments dominating the show floor; but a handful of major players in the retail space used the show as a forum to announce their particularly progressive partnerships and endeavors for the future as well.
Taking RFID beyond the store-level, UK retail giant Marks & Spencer and Avery Dennison announced a significant expansion to their nine-year RFID partnership, to the tune of a billion tags deployed in M&S’s more than 700 stores. Shawn Neville, president of retail branding and information solutions with Avery Dennison, explained that "as one of the UK’s biggest retailers, M&S is focused on providing exceptional customer experience and RFID enables that experience by ensuring inventory accuracy from the distribution center to the store floor, providing shoppers with consistent and accurate product availability in-store and online." And with 21 million shoppers walking in and out their doors each week, visibility into operations is entirely necessary for maintaining order.
Finding the benefits of RFID deployments similarly convincing, French fashion retailer Faconnable and Tagsys RFID are turning their partnership from a one-store pilot into a 70-store, multi-continental RFID rollout. By integrating Tagsys’ FiTS (Fashion-item Tracking System) with their third-party logistics suppliers, the sizeable fashion retailer will have complete coverage of the millions of items that they and their partners sell.
Shows like NRF are continually bringing together the greatest minds in connected technology and helping facilitate communication about the value of RFID. Just recently we posted about RFID at this year’s Consumer Electronics Show (CES) and how fortunate we at ThingMagic were to be able to work with Alcatel-Lucent on the Connected Service Vehicle for their ng Connect program. Though RFID connectivity is already seeing success as a business technology, the attention it gets from major events like CES and NRF helps prove its worth.
For retailers in particular, business goals boil down to a handful of uniform desires: to provide the best customer experience possible, and to do so in the most efficient manner available. What these retailers now realize is that the visibility that RFID systems can provide to their stores and supply chains can affect more than just the cost savings of having better control over inventory. When the entire supply chain becomes a unified whole, the issues that have always frustrated customers, managers, and employees regarding inaccurate information about item availability no longer exist.
And regardless of whether retailers are realizing this because they’re seeing the benefits of RFID systems they’ve deployed or because they’re kicking themselves for not jumping on RFID solutions sooner, it was clear at NRF’s Big Show that RFID is at the top of the agenda for most major retailers.
There has certainly been a lot of talk recently about innovation in the retail sector, a lot of which can be found in PSFK’s most recent Future of Retail Report. Essentially, it comes down to enhancing the customer experience. Retailers are listening to their shoppers and considering new technologies to deliver what they are asking for, whether it is a webcam enabled algorithm that helps them find the right fit or a location aware smartphone app that provides sales-staff with customers’ preferences.
The use of RFID in retail to deliver enhanced customer experiences is growing as well. For example, Macy’s recently announced in a Forbes article that RFID will be an integral part of the new 63,000 square foot shoe department opening this fall in their Herald Square location. Similarly, JCPenny CEO Ron Johnson revealed they would be moving “…to a 100% [item-level] RFID implementation by February 1, 2013.” Macy’s and JCPenny are not unique in their decision to embrace RFID, as many retailers now understand the countless advantages the technology has to offer (for more, see our blog posts on RFID in retail).
For Macy’s, installing RFID in the shoe department will be their first “broad use of RFID.” After shoes, Macy’s plans to expand into basic merchandise - items that they need to make sure are always in stock and are in need of constant replenishment.
JCPenny's RFID strategy is centered on revitalizing the customer experience at the century-old department store. According to reports, the retailer is starting by implementing an RFID-enabled mobile Point of Sale (POS) solution beginning this fall. This is the first step in the company's plan to use RFID storewide to eliminate traditional check-out stations. The end goal is to allow any customer to check out anywhere, anytime, including self-check-out, by 2014.
At the end of the day, RFID is about simplicity and innovation. By automating manual tasks, RFID technology can improve the customer experience while driving sales and reducing costs. Add progress made by industry organizations such as VICS and their templates for retail best practices, and the barriers to RFID adoption in become very low.
In 2010, we blogged about RFID in retail in the article RFID-The New Future of Retail. We noted Wal-Mart’s famous 2004 mandate requiring its top 100 suppliers to apply RFID tags to shipping crates and pallets to drive efficiencies into its supply chain, and many innovative uses of the technology since. With Macy’s and JCPenny grabbing some of the spotlight now, it sure seems like big retail players are beginning to recognize the value of RFID in meaningful ways - taking advantage of the process improvements it has promised to deliver for over a decade and enabling unique personalized customer experiences that today's shoppers are demanding.
It’s no secret that technology is transforming the way we do business, but with some innovative thinking on the part of retailers, businesses are in store for a level of efficiency they’ve never seen before – in part, thanks to RFID.
These new efficiencies are coming in ways that, until now, have seemed counterintuitive. In a recent blog, Software Advice's Michael Koploy details how retailers are beginning to fill online orders with their in-store inventory – essentially turning their entire supply chain into one cooperative “warehouse.” This may seem like a nightmare to maintain, detrimental even, if you consider the possibility of more frequent stockouts, but in fact RFID has made this an incredibly viable option for the modern business world.
As retailers begin to incorporate RFID into their supply chains, tagging every piece of inventory and scanning items as they move from warehouse to distributor to retailer, suddenly enterprises are afforded a much higher level of visibility into the location of the various moving pieces of their business. Businesses are now able to treat their in-store inventory as an extension of their warehouse because RFID redefines what it means to track inventory – what was once a few teenagers counting boxes in the back room of a store with a clip board and pen is now a highly organized and incredibly accurate automated tracking system. It’s almost like having a crystal ball.
With an RFID system in place, retailers can have a more accurate picture of their inventory and feel comfortable knowing that they are moving their products in the right direction. Not only that, but using RFID to fill online orders from in-store inventory can actually lead to fewer stockouts, as the new level of visibility gives enterprises a better idea of which inventories are running low and when they need to be restocked. Additionally, businesses will see less of a need to implement markdown prices, as slow-moving inventory can be better distributed among the variety of retail outlets, and businesses will save on shipping and delivery costs since each retailer can now function as a distributer as well.
It’s getting more and more difficult for businesses to ignore the benefits of RFID. What managers once thought could only serve enormous supply chains with equally-enormous budgets is now allowing retailers to modernize their entire business platform. RFID is redefining what it means to have visibility into business operations, and as the scope of RFID implementation continues to expand and simplify, it’s becoming far easier for retailers to increase profits by understanding their company at a more granular level. RFID very quickly begins to pay for itself, and it certainly makes life easier for everyone from enterprise managers to the guys in the back who can now focus on greeting customers instead of counting boxes.
“American Manufacturing Has Declined More Than Most Experts Have Thought.” That was the headline of a March 28 Huffington Post article. Manufacturing is in the spotlight now that Washington politicians are trying to find ways to bring the trade back from overseas and make the United States a manufacturing hub once again. The top most common reasons that businesses sent their manufacturing outside the U.S. during the last decade were high labor costs and high corporate taxes. The quest for viable margins prompted the mass exodus.
The retail industry was an early adopter of RFID because the benefits to all aspects of the supply chain were abundantly clear. Supply chain efficiency has a tremendous impact on manufacturing margins, which makes RFID an easy bet for this industry as well.
We all know that RFID can be used in many ways to create more efficient processes which leads to lower costs and stronger bottom lines. In manufacturing and distribution environments, the implementation of RFID can reduce labor costs by reducing the workforce needed for inventory management, among other things. RFID can also store all of the history associated with a product, which helps minimize support warranties and optimize recall processes. While we don’t know yet if RFID can help reduce government imposed taxes, the benefits that RFID delivers can certainly help offset those taxes. Benefits include: increased throughput and productivity; shorter order cycles; faster shipping; more efficient inventory management; increased profit margins and better customer service.
It’s clear why manufacturers are looking to RFID to help them run more efficient operations that minimize production down time, optimize material and parts inventories and improve labor output. Of course we understand that the manufacturing companies are working with restricted budgets these days, which is another reason why RFID is a prime technology to for this market. By applying RFID incrementally across a plant floor, manufacturers can easily integrate the data captured by RFID, without disruption, into the existing infrastructure and processes.
The newly acquired, real-time visibility into the supply chain can yield tangible benefits almost immediately by letting manufacturers make more informed decisions and minimize costly errors. Could RFID in the manufacturing supply chain be just what the doctor ordered? It seems too good to be true that implementing a low cost, highly effective technology could bring an entire industry back from the brink of extinction; at least extinction in the United States. But if there was one technology that could do that, it’s no surprise that it would be RFID.
We’re not the only ones who recognize the critical role RFID can play in breathing life into manufacturing. The recentl RFID Journal LIVE! conference ran a track dedicated to Manufacturing and Operational Efficiency. Companies like Deere & Co., Boeing and Mitsubishi shared their compelling success stories. Hopefully other manufacturers will follow suit and put the U.S. back on the manufacturing map.
If you have an RFID manufacturing success story you’d like to share, please tell us about it.
You could fill in the blank with any number of words. Business benefit from the Speed of RFID, ...from the Accuracy of RFID, ...from the Efficiency of RFID, ...from the Personalization of RFID, ...from the Profitability of RFID …you get the picture.
All you have to do is check out the list of industries represented at this year's RFID Journal LIVE! conference. It is a pretty broad list, illustrating the value and reach of the technology: Defense/Aerospace; Health Care/Pharmaceutical; Manufacturing/Operational Efficiency and Retail/Apparel.
Among the companies within these industries are several that are working with ThingMagic to bring innovative solutions to market, improve productivity, and gain a competitive advantage. We are proud to be working with many award winners and presenters at RFID Journal LIVE! 2012 and years past. Check 'em out here:
Keonn - Winner of "Coolest Demo" Award at RFID Journal LIVE! 2012
Walt Disney Parks and Resorts U.S. - Presenter - Improving Supply Chain Logistics: Using RFID to Speed Up Inventory Management at Disney. Check out the RFID Journal article on the solution here: RFID Helps Disney Employees Get Into Character
Seeonic - RFID Journal LIVE! 2012 Best in Show finalist
Gerry Weber International - RFID Journal LIVE! 2011 Best RFID Implementation Award
The Disney Family Cancer Center - RFID Journal LIVE! 2010 Most Innovative Use of RFID Award
The RFID Journal Awards recognize companies that have distinguished themselves by their successful use of RFID or introduction of a valuable new RFID product or services. A full list of award winners at RFID Journal LIVE! 2012 can be found here. A full list of the Coolest Demo Contest participants are listed here. We know who are favorites are! How about you?
The holiday retail sales season by most accounts was characterized as volatile – with huge surges at the start and end of the season, and big dips in the middle. That’s obviously good and bad for retailers. How to smooth out the peaks and valleys surely will be discussed at the National Retail Federation’s “Big Show” this month.
This also gives us an opportunity to illustrate how an industry can think differently about RFID to help address this problem. As we asserted in our 2012 prediction that data and apps will rule RFID for the next 10 years, when companies hear the term “RFID”, they shouldn’t be thinking about readers and tags, but rather about processes. Here’s how it can be done within retail.
Real-time Data, Real-time Decisions
The age-old challenge in retail is how to maximize razor-thin margins. The newer challenge is sustaining increased sales in brick-and-mortar stores. Technology is essential, but it has more of an advantage for online retail.
A key to optimizing sales and margins is making near real-time decisions about merchandising, assortments and promotions. It’s easier to do this on the web because of data available from such things as what items people are clicking on, search queries, etc. Retailers can change what gets promoted on the fly with this information.
But how can this happen in physical stores? Point-of-sales systems provide data as to what people buy in the store. This has been where innovations in terms of data warehousing and analytics have come. There’s a lot of consumer behavior that takes place before the check-out though, and data from this activity can help make even faster decisions about assortment and promotions on the floor.
There are project-level RFID implementations in retail that we have highlighted here that can be broadened to make a process-level impact. For example, last month we wrote about how a department store in Japan is the first to use RFID-based interactive hangers that trigger a display of a model wearing a garment that a customer selects off a rack. The idea is to make the item more appealing at the point of interest.
Those hangers could do a lot more for a retailer, however. The mere fact that someone picked the item off the rack shows an initial level of interest, which can be captured as a new set of data; like clicking on an item online. If a person takes it to the fitting room to try it on, where there is another RFID reader, the system can capture this as additional data related to the level of interest in an item. If the item is left in the fitting room, the retailer can know this immediately, as well as if the item is taken from the fitting room to the check-out counter.
This is as valuable as the data that can be mined from web site clicks and searches and allow in-store managers to change assortments and displays much more quickly than before.
Processes and Solutions
When we say that we should reshape the way we think about RFID, we mean that we should not fixate on the need to prove the technology, but rather think about ALL of the processes that can be improved with the availability of RFID data. As the example above is intended to illustrate, retailers should think about how they can get data about shoppers’ behavior from the moment they walk in a store and the kind of analysis they can do to optimize processes accordingly.
Specific processes can be gleaned with the help of McKinsey’s recent Big Data report, which looks at retail as one of the industries where more value can be created from new data sources like RFID systems. These include in-store behavior analysis, customer micro-segmentation, assortment optimization and placement and design optimization.
Beyond the process identification, retailers can benefit from the availability of full RFID solutions that help them incorporate data generated from RFID systems with the data warehousing, analytics and mostly home-grown software applications used to manage operations.
We’ll continue our series of posts about how other industries can think about leveraging RFID data by looking more closely on healthcare and the in-transit markets. In the meantime, what are some other ways retailers can use RFID to enhance existing processes?
Already in its 101st year, the National Retail Federation (NRF) is gearing up for its Annual Convention & EXPO in New York next month. It looks like there is a lot of excitement in store for us (no pun intended) including a keynote speech from Bill Clinton!
Aside from a former U.S. President being in attendance, digital retail and mobility are dominating the buzz this year. This shouldn’t come as a huge surprise because retailers are marketing to the consumer in ways that align with their behaviors – which is largely dominated by using mobile devices to consume digital information.
According to Susan Newman, NRF’s Senior Vice President of Conferences, “Right now, it’s all about how you reach customers, engage with them, and help them engage with you.”
If you walk into any mall or store, or even just observe people walking down the street, EVERYONE is carrying a mobile device. If that’s an accurate representation of the consumer market today, retailers must recognize that they can reach a very large portion of their target audience via digital media and the smart phone. As a proof point to that theory, Shop.org’s First Look Track at NRF will be two days that focus on all things digital, related to topics such as The Future Shopper and Buying Behaviors.
A while back we experimented with mobility and social media, having RFID play the integral role. We determined that RFID + Social Media = Reach. Meaning that by adding the two together, it was easier and more effective to reach the intended audience, customize to their preferences and build brand loyalty. How can RFID help get us closer to that Holy Grail (in a simple, easy way) in retail?
One way to get to get a better understanding of your customers’ preferences is through item-level tagging. It may actually be on its way to being considered a best practice in retail. The Voluntary Inter-industry Commerce Solutions (VICS) Association started the VICS Item-Level RFID Initiative for that very purpose. Its goal is to foster innovation, improve business processes and enhance consumer experiences by developing business applications and best practices around standards-based RFID. This is the kind of support the industry needs to effectively sell, and sell in such a way that is embraced by consumers. Using mobile devices and digital/social media will undoubtedly be widely accepted because it aligns with their current behavior.
We can’t wait to see some of these session tracks at NRF to learn more. Congratulations, NRF on 101 years and a sold out expo floor!
It’s that time of year. With the holiday season in full swing, it seems like retail is the topic of choice for RFID stories lately. We last blogged about the mobile wallet and how it can enhance the check out process, which could have a huge consumer impact during this time of year.
And here's yet another way that RFID is improving the shopping experience and potentially helping boost sales. A department store in Shibuya, Tokyo, Japan is the first to try out interactive hangers. When a shopper picks up a garment, RFID triggers one of the large screens above the rack to display a person modeling the clothes selected. Beyond the holiday season, this use of RFID could also have a huge impact on the back-to-school purchases, and even prom season.
Check it out here.
The hangers were developed by Tokyo tech firm Teamlab. They are regular hangers with a large central rectangle that houses the RFID tag. We didn’t find reports that included information on the RFID readers, but they could be placed on the clothing racks or ceiling mounted. The hangers can also be used to manipulate the music and lighting in the store. The diagram above depicts how the RFID system works.
We like it because it’s unobtrusive, as is the case with RFID in general. If you don’t care to see what the garment looks like on the model on the screen, simple. Don’t look up. It’s out of the way and can be easily ignored.
Many shoppers can be easily influenced by a positive image and I bet this is why retailers will like this solution. If a leather jacket looks good on the GQ model, I transfer that image to myself, I buy it and the marketer wins.
Take the concept one step further, what if the model on the screen showed us how to tie a tie or scarf and the various other ways it could be worn? That could be extremely useful, especially if it’s a new fashion trend.
This implementation of RFID reinforces that the technology can play a valuable role in all phases of the retail supply chain - from the manufacturer to the show room floor. While this use case may not be the driver for RFID being widely adopted in the retail sector, it shows that very intelligent people are thinking of creative, yet easy ways to integrate RFID into everyday processes.
Which one of your everyday activities can be enhanced with RFID?
Image Source: TechCrunch
Google Wallet has drawn a lot of attention to the act of making purchases with the tap of a smart phone. It’s considered the first NFC mobile wallet system that, with the SingleTap feature, conducts the transaction, redeems coupon offers and earns loyalty points, all in one step. Visa has said that their payWave system will work with Google Wallet and American Eagle Outfitters, Macy’s, Toys“R”Us and Jamba Juice have stated that they will accept Google’s SingleTap payment in some of their locations.
Using smart phones as wallets is not a new concept, but momentum seems to be growing. In fact just a few weeks ago, Intel and MasterCard announced their alliance to offer a better experience for online shopping. Part of their aim is to provide a safer and simpler checkout process for consumers using devices. If the number of smart phone options and support from financial institutions are any indication, this form of RFID will soon become an integral part of the consumer experience – potentially transforming the retail market.
It will be interesting to see if some shoppers lose control of their spending because of the ease of tapping a phone instead of being forced to take cash out of their wallets or signing a credit card slip. It may be those extra motions that make consumers think twice about whether or not they really need to buy that item.
Is it only a matter of time before we’re all buying our groceries, clothes and gas with digital dollars? Will there come a day when future generations don’t know what paper money is and goods are purchased thought the exchange of virtual credits?
I’ve bought into the convergence of my phone, MP3 player, rolodex, newspaper, video game system, calendar, camera, and much more, into a single device that I carry in my pocket, but for now I’m sticking to the good ol’ American dollar, bread, buck, clam, dough, frogskins, greenbacks, loot, bones, coin, folding stuff, moolah, spondoolies, wonga…
Beyond the Right product, at the right place, at the right time...
RFID in retail has demonstrated major business benefits in the way of streamlining the supply chain, which leads to reduced costs and enhancing the customer experience - resulting in increased and recurring sales. All good for a thriving business, which is probably why Macy’s and Bloomingdale’s have recently taken a stronger stance on their RFID deployment plans.
Last week it was reported that Macy’s is embarking on a widespread adoption of RFID. This is very exciting to those of us who have been supporters (and developers) of RFID since its infancy. Macy's will be one of the first retailers to implement RFID on a broad scale. Next year, the company plans to be using RFID in all U.S. stores to track items that are regularly stocked and automatically resupplied as they are sold to customers. These “replenishment goods,” which include men's furnishings, intimate apparel, men's pants, denim and women's shoes, make up about 30 percent of its sales. One can deduce that Macy’s expects that number to grow based on its investment in RFID.
According to Tom Cole, Macy’ chief administrative officer, the goal of the project is to help them ensure they have the right product, in the right place, at the right time for their shoppers. It would seem like a simple notion, but there are many variables in retail that make that a difficult task. But, RFID can replace some of those pesky variables with the desired constant.
From the Supply Chain to the Fitting Room
RFID is improving the retail experience outside of supply chain enhancements as well. Recently, ThingMagic UHF RFID readers were featured in a Musical Fitting Room video to show the powerful combination of music, fashion and RFID. It’s a great concept. The idea is to appeal to the individual shopper by playing music that resonates with them, then sending them an SMS with the name of the song and a link to download it for free on StarHub.com.
To make this work, the clothing items have RFID tags applied to them that, when brought into the dressing room, trigger a song that matches the ‘mood’ of the clothes. The project coveres 16 genres and more than 10,000 songs to encompass all ages and types of shoppers.
With RFID, retailers can count and track item-level inventory much easier, faster and accurately. A very important part of the equation solved. Once you have that part of the equation, you can arrive at “right product, right place, right time” answer. And who doesn’t like getting the right answer all of the time? Now, with a soundtrack to boot!
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