The Promise Of RFID Is New (Again)

By Matt Pillar, chief editor

March 2014 Integrated Solutions For Retailers

The retail market has made the last 10 years pretty rough for RFID tag sales people, but the ice has begun to break. Apparel and department store retailers, in particular, began deploying item-level tags en-masse. Kohl’s, Macy’s, Marks & Spencer, Saks Fifth Avenue, and Walmart are a few notables.

What’s interesting about the quickened pace of item-level adoption is that the economics of RFID haven’t much changed. The infrastructure is considerably less expensive than it was 10 years ago, but the kind of large-scale implementation necessary to attain a high degree of inventory visibility across a national, multi-site enterprise and deep into the supply chain is still a very significant expense. And while retail sales performance is gradually improving, it’s not as if U.S. consumerism has rebounded to the point that retailers are bullish on laying out big money for massive infrastructure projects. The recent surge in RFID deployments isn’t a result of the economics catching up with the use case. It’s a result of a use case paradigm shift. The ROI on item-level RFID was not long ago calculated primarily on the efficiency gains the technology enabled in the supply chain. Increased speed of the receipt of goods at the DC and pick, pack, and ship efficiency were oft-cited benefits. Not a very sexy approach to winning C-level buy-in.