Evolving Inventory Management Through Item-Level Tagging
A report from Baird originally projected growth of radio frequency identification (RFID) in the apparel industry at 40 percent this year. With recent pushes in RFID adoption, that number has more than tripled to between 125 percent and 150 percent growth. One of the main drivers of this evolution is the increased use of RFID in item-level tagging. With this type of RFID tagging and scanning, retailers can tag individual items on their retail floors — instead of just in the supply chain — to gain better visibility and control of their inventory and expand their customer experience capabilities.
Retailers are currently expected to purchase a total of 300 million RFID labels in 2010. This can be attributed to a market shift from more compliance-based tracking to item-level tagging, as well as more affordable tag and reader costs. For apparel retailers, this is critical in order to ascertain how much inventory is available on the floor. For example, what sizes and colors need to be restocked, and what inventory is available in stock rooms with a simple scan of a RFID tag?
One of the greatest benefits of item-level tagging for retailers is perpetual inventory management. With the increased visibility into inventory afforded by tagging, retailers have greater efficiency and accuracy in order processing based on an increased knowledge of what's in stock. Additional benefits include:
- ability to keep a fully stocked sale floor;
- increased time and labor savings;
- increased accuracy in taking inventory; and
- reduction in the amount of clearance items due to incorrect inventory and excess ordering.
Item-level tagging also provides retailers with improved customer relationship management. By reducing the amount of time salespeople spend in a stock room or taking inventory, the result is employees are able to spend that time working with shoppers to generate more sales.