Over the past 18 months, the price of RFID tags has dropped as much as 40 percent. This brings the per tag price down to roughly five cents each, or less, based on volumes and the type of tag. Some of the larger tag orders we have seen are capturing a per tag rate equal to four cents. We fulfilled an order for
one million tags for one of our customers with the excellent rate of seven cents a tag.
Early in this 2013 fiscal year, we have approached the tipping point for finding the ROI in RFID based on tag expense.At the same time, technological advances over the past months have substantially improved tag range and readability. The overall quality and performance of RFID technology continues to rise as costs go down. The time to activate your planned RFID pilot is now. Chances are your competition is ready to launch.
A recent survey by the Aberdeen Group found that 57 percent of retailers are using or plan to deploy item-level RFID. And we expect this percentage to increase. Compelling results from early adaptors like American Apparel and category leaders like Macy’s are validating the business case for RFID. At American Apparel, RFID working in tandem with other technologies helped reduce shrink by 75 percent. The enabling capacity of RFID propelled efficiencies throughout the operation, making American Apparel’s RFID-enabled stores the best-performing locations in the 300-store chain.
Lord and Taylor credits RFID implementation with a four percent boost in sales. Company executives explained the sales lift this way: “You can only sell what you can see”. With RFID you can see inventory wherever it is—in the backroom, on the dressing room floor, or misplaced in the wrong department. According to Lord & Taylor, RFID simplifies replenishment, keeping the sales floor at “full capacity” at all time.
Multiple research pilots, including studies by the University of Arkansas’ RFID Research Center, further prove the impact of RFID on the retail bottom line. By keeping the sales floor properly stocked, RFID reduces out-of-stocks, enabling more sales and enhancing the overall customer experience.
In a retail environment that demands “lean” operations, RFID is a proven time and money saver. Truecount’s item-level RFID, for example, consistently delivers inventory speeds that are 100 times faster than barcodes. At a read rate of hundreds of items per second, an entire cycle count can be accomplished in minutes. Counting and auditing tasks that once required multiple people and many hours to execute can be reduced from days to under an hour with RFID.
Retailers with RFID in place are experiencing other critical advantages of the technology. A key benefit is the cost-reducing link between RFID and anti-shoplifting technology. [More on this topic in our next blog]. The point we are making now is that retailers of every size are under new pressures: from customer expectations for “perfect” service, to escalating competition in the sector created by global e-commerce, to fluctuations in the world economy. The need to operate efficiently while keeping capital investments as low as possible is intense. Accurate stock control and a very clear picture of where inventory is at all times are essential in meeting this need. With tag prices at a historic low and the competitive advantages continuing to increase, the momentum for item-level tagging is escalating worldwide. Chances are high that your competitors have already launched, or are about to launch their pilots. What are you waiting for?
If you still have questions about item-level RFID, let us know in the comment box below or email success@truecount.com. For more insights into the benefits of RFID, we invite you also to download Truecount’s complimentary White Paper, “The Perfect Sales Floor”, available here: http://www.truecount.com/the-perfect-sales-floor/