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Abstract
It has been proven that item-level RFID can improve many in-store processes for retailers. In particular, the business case for RFID for retailers looks promising. Previous studies have shown the benefits of RFID at the pallet and case level, such as reducing out of stocks and improving inventory count accuracy. Therefore, it seems logical that item-level RFID would provide even more benefits. In this study, we examine the use of item-level RFID at a major apparel and home retailer, JCPenney. Specifically, the use cases of inventory accuracy and inventory management using RFID replenishment reports are investigated, with incidental attention to cycle counting. This pilot’s results support previous research, demonstrating the tendency for inventory accuracy to diminish over time, as well as the potential for improvement in inventory accuracy due to RFID. Improved inventory accuracy leads to fewer out of stocks, less safety stock, and better ordering and forecasting, among others.
Summary
Item-level RFID offers significant benefits for apparel retailers, especially in improving inventory accuracy, reducing out-of-stocks, and enhancing loss prevention. A study conducted at Dillard’s Inc. demonstrates these advantages. RFID enhances inventory accuracy, leading to fewer out-of-stocks and less need for safety stock, which improves ordering and forecasting. It also allows for more frequent and precise cycle counting, eliminating the need for large, annual inventories. For loss prevention, RFID tracks stolen items in real time, providing details on what was stolen, when, and from where. This data not only strengthens loss prevention strategies but also allows for more accurate inventory adjustments and better restocking decisions. Overall, item-level RFID supports more efficient store operations and inventory management.
