Study: RFID commitment doubles

OCTOBER 13, 2016 | BY DEENA M. AMATO-MCCOY

It has been a long haul, but radio frequency identification (RFID) is finally making its bones in retail.

 

In 2014, 34% of retailers either implemented or were in the process of adding or piloting RFID. Fast-forward to 2016, and those results have doubled to 73%, according to the “Kurt Salmon RFID in Retail Study 2016.”

 

Kurt Salmon tapped 60 soft lines retailers and wholesalers with revenues of at least $500 million, to determine how commitment levels have changed since 2014. The new report revealed inventory accuracy is the most widely used metric, with 93% of surveyed retailers using RFID to manage the process, and gaining an average accuracy improvement of 25.4%. 

 

Among these retailers, RFID improved customer satisfaction by 11.0%, reduced out-of-stocks by 40.6%, cut shrinkage by 33.7% and, most importantly, boosted profit margin by 60.7%, the report said. 

 

Two years after the original survey, companies are still discussing RFID’s return on investment (ROI). This year however, retailers reported they are on average using RFID in six typical use cases, including labor savings, improved inventory accuracy and enhanced omnichannel fulfillment — and each showed a positive ROI. 

 

Specifically, retailers reported a 12% ROI from labor cost savings due in part to employees conducting cycle counts more efficiently or not at all, the report said.

 

Of course, barriers still remain. Some retailers, mostly smaller companies, continue to hold out due to high implementation costs. Meanwhile, 75% said they were waiting for broader industry adoption, data showed. 

 

While it is not a technology “reserved” for larger companies, to date, these are the organizations that are leading the charge. For example, 76% of retailers with revenues over $1 billion have implemented or are implementing RFID, while 87% of retailers with revenues of more than $5 billion already have, the study said.