By George Anderson, Editor-in-Chief, Associate Publisher, RetailWire
Jones Apparel Group announced it has begun a pilot program in Nine West stores to test radio frequency identification (RFID) technology at the item level. The company is seeking to determine what impact item level tracking will have on productivity, customer service and inventory management.
"RFID has interested us for some time, and we believe it has reached the point where launching a pilot program of this nature makes sense," said Norm Veit, Executive Vice President, MIS at Jones, in a press release.
Sergio Prosperino, senior vice president, store operations at Nine West, said, "We are intrigued by the prospect of enhanced inventory visibility, and we think this can be of real value to our customers and store associates."
Jones is working with Avery Dennison, inCode Wireless, Motorola's Enterprise Mobility Business and Vue Technology as technology partners in the test.
The Jones test follows in the steps of American Apparel, which tagged all items sold in its New York City stores last November. According to a report on the STORES magazine website, the company is expanding item-level tagging to its locations in the New York area and another store in Santa Monica, Cal. It will follow by eventually rolling out the technology to all its North American locations.
Zander Livingston, who led the RFID test for American Apparel, believes that it's time to go for it when it comes to item level tagging. "We hear about a lot of people saying that they're waiting for the costs [of RFID] to come down, but I think that's just a mask," he said. "It's not that expensive; I think really it's about waiting to see if somebody else steps up first."
Discussion Question
for the BrainTrust panel: Is the time right for RFID at the item level? What do you think Jones Apparel and Nine West will discover from the testing the companies will do? Is the tag cost impediment still a major issue preventing more widespread adoption of RFID or are there other more serious factors getting in the way?
RetailWire BrainTrust Comments:
RFID continues to be a terrific opportunity for certain items, suppliers, and retailers but is not yet ready for massive rollout on every SKU. This test will verify that you can track and manage inventory more effectively on high-retail, average/low-turn clothing.
The technology makes the most sense for high-retail/high-turn items like razor blades, laundry detergents, cosmetics, etc., where the cost of the tag and set up is easily absorbed into the item P&L and is offset by reduced inventories and higher turns.
Now, how do you translate that item P&L into very high-turn items like a 50-cent can of Viennas or a can of Pringles? RFID is still cost prohibitive for many SKUs, but clearly makes great sense for the right items which center on that item's P&L.
Dan Nelson, CEO, Leadership Resources
Herb Sorensen, Global Scientific Director,
Shopper Insights, TNS Sorensen, Says: |
 There are many retailers for whom, to this day, the scanner is largely about ringing up sales and tracking the gross numbers, whether for inventory or otherwise.
What do you say? Send us your comments here |
The MediaCart system is built on passive RFID using shelf labels. The discussion here is rightly focusing on inventory management, but there is a good deal more that can be done with the data. Think how long it took from when scanners were introduced until dunnhumby assisted Tesco in showing how to use this (OK, and they weren't the only ones involved.) The point is, there are many retailers for whom, to this day, the scanner is largely about ringing up sales and tracking the gross numbers, whether for inventory or otherwise.
I hope that it won't take 20-30 years after the technology is adopted for management of inventory, before the industry makes serious use of what the technology can teach about the science of retailing. We have been using active RFID for "item level" tracking (but not inventory control) for 8 years now, and hope our new book, soon to be published by Wharton School Publishers, will wake a few people up as to what they don't know, but should.
Herb Sorensen, Global Scientific Director, Shopper Insights, TNS Sorensen
Clearly it will be easier for retailers with larger items to start the RFID age rolling (think Costco vs. Claire's), but in the near future, obviously, RFID will be commonplace. The benefits so incredibly outweigh the challenges that it's a bit of a slap in the retail face that the conversion hasn't happened sooner. Short sightedness being the usual demon.
It seems that being a fast second is the nature of retail today, which makes innovation the way to differentiate and win.
Lee Peterson, Vice President, Creative Services, WD Partners
One thing that reduces both companies' cost: they're the producers as well as the retailers. However, given the low price points of American Apparel and the moderate price points of Jones, it's not easy to see why RFID would yield a greater return than bar code scanning. The real test: will RFID be implemented 100% chainwide at either company? When that happens (not when it's heralded in a press release about the future), it might be a decent sign that the payback is worthwhile.
Mark Lilien, Consultant, Retail Technology Group
Read the entire story and RetailWire discussion at:
http://www.retailwire.com/Discussions/Sngl_Discussion.cfm/13159
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