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Abstract
Item-level RFID has the potential to improve many in-store processes for retailers. In particular, the business case for RFID for apparel 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. It seems logical, therefore, that item-level RFID would provide even more benefits. In this study, we examine the use of item-level RFID at a major apparel retailer, Bloomingdale”s. Specifically, the use cases of inventory accuracy and out of stocks are investigated, with incidental attention to cycle counting and loss prevention. Results clearly indicate 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. The ability to quickly and accurately conduct cycle counting facilitated by RFID, rather than doing large scale inventories once or twice per year, offers the advantage of keeping inventory accuracy high. Finally, for loss prevention, RFID provides the advantage of knowing exactly what was stolen, when it was stolen, and from where it was stolen. In addition to the insights this provides to improve loss prevention methods, knowing exactly what was stolen allows the retailer to adjust inventory counts accordingly and order more product, as needed.
Summary
This leads to fewer out-of-stocks, less safety stock, and better forecasting and ordering. RFID also enables more frequent cycle counting, improving accuracy by avoiding large-scale annual inventories. Additionally, RFID enhances loss prevention by tracking stolen items in real time, revealing what, when, and where theft occurs. This data helps improve loss prevention strategies and allows retailers to adjust inventory counts and reorder products as needed.
