Posts Tagged 'RFID'

Who’s next for cashier-less checkout?

RetailWire panelists speculated recently about how long it will take for the Amazon Go experiment to be adopted by other retailers. Here’s my brief take on the issue:

Some stores will never be suited for a cashier-less system (most obviously, retailers like Nordstrom) but it has application to plenty of other stores. It’s a question of scale and how long it will take for enough early adapters to drive the cost of these systems down for everybody else. Think about the evolution of RFID: It’s been hailed as the next big thing in inventory management but has taken seemingly forever for even big national chains to adopt the technology. I don’t expect this to be any different given the short-term capital expense involved.

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“The Year of RFID”…again?

It’s probably self-serving among providers of RFID hardware and software, but once again 2014 is being declared “the year of RFID.” While stores like Macy’s and JCPenney are moving forward with it, the industry as a whole has been slower to embrace the technology than you might expect. My recent opinion:

To George Anderson’s point, “the year of RFID” seems to be an annual topic on RetailWire. There is no doubt that the technology is gaining traction and significant users, but the question is “what’s taking so long?” It will become easier to sell senior management on the expense investment in RFID if it can demonstrate quick revenue and margin payback, not just improved inventory accuracy over the long haul. At the same time, retailers need to face the loss-prevention risks of conversion from security tags to RFID tags.

Does “sequential pricing” stand a chance?

There was a lot of mixed opinion on RetailWire this week on the subject of  “sequential pricing.” This is the concept that retailers can charge more for an item once they determine that a shopper is more likely to buy it by observing consumer behavior. (This can include using RFID technology to figure out whether somebody has taken an item from a shelf.) Count me as a skeptic, for a couple of reasons:

From the article, here’s the flaw in the premise: “Not apparently explored in the study is whether altering prices based on buyers’ intent will be acceptable to consumers.” The “empowered customer” would find at least two reasons to object to this pricing practice.

First, the growth of “price transparency” makes it harder and harder for retailers (especially in e-commerce) to disguise the price for goods and services. Second, state attorneys general or bureaus of consumer protection (not to mention the FTC) would have a real issue with multiple in-store prices that conflict with “shelf prices,” especially if they are driven by RFID.

Bottom line: I would not expect “sequential pricing” to get off the ground.

The “black hole” of inventory management

RetailWire panelists spent time recently discussing the interlocking issues leading to chronic out-of-stocks, even in today’s era of improved technology solutions. My comment (which follows) points to inaccurate inventory tracking, which is a problem well within retailers’ ability to solve:

The promise of new technologies like RFID inventory tracking has not been met yet, since many retailers have not made the investments needed to make them work. So many retailers continued to be plagued by what I call the “black hole” of inventory management.

Specifically, stores may book receipts into their on-hand systems at the point of receipt at a distribution center (or even upon receiving an advance ship notice electronically from a vendor). There can be a gap of days between receipt in a store’s “system” and actual delivery of goods to a store. There may be additional delays if tight store payrolls (Walmart, anyone?) cause a breakdown in replenishment between the truck, the stockroom and the selling floor. Meanwhile, the buyer (or the replenishment system) thinks that goods are in stock and can’t figure out whey they aren’t selling.

Retailers are decades past the days where the solution to the “black hole” problem was out of reach. But it requires investments in technology and manpower to fix it.

JCP’s push toward RFID technology

Here’s a recent RetailWire post about JCP’s conversion to RFID tagging from traditional barcodes. I’m a believer in RFID but I’m skeptical about the plan to convert entirely to self- and mobile-checkout at JCP. My thoughts:

Macy’s has been working on RFID conversion for at least a year, and JCP’s promised update should push this technology into the spotlight once and for all. JCP is positioning it as a way to streamline the store checkout process (by eliminating traditional checkout counters) but the real benefit to retailers will be more accurate real-time inventory management and replenishment. In fact, JCP ought to make sure that its existing and targeted consumer actually likes the sort of checkout experience being proposed — testing first would be a wise idea.

RFID marches on

From a recent RetailWire discussion: Big retailers are moving faster toward RFID technology, despite their past investment in UPC scanners and related software. Like any new technology (aimed at consumers or businesses), the cost of early adaptation is relatively high. It becomes practical for smaller or specialty retailers only after larger stores (Macy’s, Walmart and the like) have driven down costs through economy of scale.

But the move to RFID is definitely accelerating. The benefits for more accurate inventory management are huge. Being able to monitor SKU details (style, color, size) more precisely should benefit margins, shrinkage and (most importantly) top line sales through improved in-stock rates.

Macy’s RFID rollout

As a followup to my last post about Macy’s IT initiatives, here’s a recent RetailWire comment about RFID. Macy’s is committed to rolling out RFID technology (including inventory tracking) by late 2012, and it’s a welcome move:

This is a long-overdue move, and I’m still surprised that Walmart didn’t get there first. Many of Macy’s vendors overlap with other department store accounts (often under other labels), so they ought to be ready when the next national retailer steps up to the plate. To make “My Macy’s” a true success — not just a slogan — it takes this sort of commitment to technology and good execution.


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