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Is RFID Saving Brick-and-Mortar Retail?

Is RFID Saving Brick-and-Mortar Retail?

The RFID retail revolution has been hyped for nearly 20 years, but it never seemed to quite catch hold. And during that time, traditional retailers have suffered mightily, losing ground year after year to online merchandisers. But a new analysis of Macy’s use of RFID yields some hopeful results, both for RFID usage and for the future of brick-and-mortar stores.

Inventory management turns out to be the secret to storefront retailers maintaining market share when competing with online sales. Although consumers love the low prices and wide selection of online stores, they can’t enjoy their purchases until the shipper delivers them. Oftentimes buyers can’t or won’t wait for delivery, or they need to see an item in person before making a buying decision. Storefront retailers really can’t afford to disappoint these need-it-now buyers, and they know that an out-of-stock item will drive these buyers straight out the door and onto their smart phones or computers. Retailers who can reduce out-of-stocks are seeing a corresponding rise in their in-person sales.

This is where RFID shines. As an inventory management tool, RFID tracks items throughout the retail supply chain. Managers can set low-inventory alerts so popular items are restocked before they run out; every item is always available on store shelves, and in-person buyers are never disappointed. After Macy’s began using RFID throughout its fashion departments, sales rose an estimated 200%.

Macy’s is reported to be currently tagging 50% of its stock with RFID tags, with plans to tag 100% by the end of 2018. The price of RFID has dropped dramatically, making it economically viable even with thin retail margins. With the positive results Macy’s is seeing, it’s quite possible that RFID could be the surprising hero of traditional retail.

And with the improved control that RFID brings to inventory management, retailers can also extend those benefits to their inventory storage. Vertical storage and multi-level racks, combined with RFID, can result in reduced storage space needs – another source of improved profits. Talk to a storage consultant about designing a complete system combining RFID and compact storage.


Photo © zhu difeng/