RFID gains global momentum as a driver of the retail Internet of Things
NEUHAUSEN, Switzerland—April 15, 2015—As the retail industry undergoes transformation, RFID has emerged as a critical, enabling technology for retailers competing in an omni-channel world and a cornerstone for the retail Internet of Things (IoT). With proven return on investment and defined use cases, RFID powered solutions from Tyco Retail Solutions are in place today at over 2,500 stores, representing some of the world’s largest retail brands. From pilots to large store deployments, forward thinking retailers like Inditex, Macy’s and Chico’s FAS, Inc., understand the critical role of RFID to maximize revenue, improve store operations, and meet the demands of today’s consumers.
IDC Retail Insights reports*, “Improving sales and inventory performance metrics while reducing loss through the application of RFID to products remains the most widely applied retail IoT use case to date, and by 2020, a whopping 20 billion products will be tagged per year.” While initial use cases for RFID highlighted improved inventory accuracy among basic replenishable goods, today more and more retailers across categories, including fashion apparel, are considering RFID as a viable and essential technology to successfully solve many of today’s evolving retailer problems. In the last 12-15 months, Tyco Retail Solutions has seen significant momentum, not only in the number of retailers deploying RFID, but also in the number of stores and merchandise categories designated for RFID roll-outs. Key highlights include:
- Shorter RFID pilot project cycle times—from months to weeks
- Increased size of pilots—up to ten times more stores
- Quicker roll outs—fewer steps from pilot to full deployment
- More merchandise categories deploying RFID—beyond basic replenishable items
- Increased speed to ROI—from expanded and proven RFID use cases.
More RFID use cases beyond basic replenishable items are driving ROI for today’s retailers.
According to the new Kurt Salmon RFID in Retail Study, which surveyed 50 leading U.S. softlines retailers, RFID adopters measuring ROI have seen gross margin improvement of more than 5% in some cases. As these stores become more saturated with RFID tagged inventory, second generation use cases are becoming viable. In fact, 42% of respondents reported 1% to over 5% increase in gross margin from using RFID to support omni-channel fulfillment. Additionally, 60% of respondents reported 1% to over 5% increase in gross margin achieved from using RFID to improve backroom to selling floor inventory accuracy and replenishment.
“RFID has become a critical foundation for success in today’s retail environment,” said Nancy Chisholm, President, Tyco Retail Solutions. “Anchored by effective use cases and proven returns, our RFID powered solutions are gaining global momentum. We will continue to help unleash the benefits RFID offers retailers worldwide and to support the advancement of this critical IoT application.”
* IDC Retail Insights, Business Strategy: Developing an IoT Technology Strategy, August 2014, #RI250271