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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 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, Dillard’s, Inc. Specifically, the use cases of inventory accuracy, out of stocks, cycle counting, and loss prevention are investigated. Results clearly indicate the 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 research paper focuses on ways to improve RFID technology in a multitude of retail processes. Studies conducted before this research supported the idea of RFID’s positive impact at the pallet and case level, and this research completed with Dillard’s Inc. highlights the benefits of RFID specifically on an item level. In completing three phases of research, Hardgrave found overall positive results that supported the benefits of RFID technology on the item, case, and pallet level.
During phases one and two, investigation was completed to identify the practicality of RFID technology at an item level within a large store, and when this looked promising, phase three began. Phase three of this research contains the bulk of important information pertaining to RFID on a business level and this research was completed in natural settings at Dillard’s, Inc. Results from this investigation clearly show improvement in inventory accuracy, cycle counts, loss prevention, and tracking out of stock items. In the past, large stores such as Dillard’s would complete one or two complete inventories, and introducing this technology offered fast and efficient inventory tracking. From a loss prevention point, this paper further supports that RFID offers important information on exact items stolen and where they were located.
