In January, Walmart issued a new mandate requiring suppliers in certain departments to begin providing RFID tags on specific home and hard goods inventory. The mandate, which goes into effect September 2, was established so Walmart can ensure on-time replenishment and maintain the proper stock levels at each store.
While Walmart’s mandate made headlines in the retail industry, they aren’t the only company to utilize RFID technology for inventory tracking. In the past two decades, other retail companies – Target, Macy’s, and Sam’s Club – have adopted RFID to improve inventory accuracy.
Shortly after Walmart announced its RFID requirements, both Dillard’s and fashion retailer Nordstrom announced a similar mandate that RFID tags would be required for most of their merchandise including apparel, accessories, baby gear, shoes, and home and gift products.
What RFID Requirements Could Mean for the Retail Industry
The biggest question in industry experts’ minds today is how will these new RFID mandates affect the retail industry? Many assume other retailers will simply follow suit and begin issuing their own directives. And they’re probably right.
When you consider the benefits of using RFID solutions to track and manage your inventory, it seems like a forgone conclusion. However, the real reason for an industry-wide adoption lies in the overwhelming influence that retailers like Walmart, Macy’s, and Target have over the industry.
Those retail juggernauts, as well as many others like them, have seen the use cases for retail RFID technology multiply.
- Improvements in inventory processes
- Optimized store operations
- Understanding in-store traffic patterns
- Faster checkout processes
- Increased theft detection and prevention
And with the price of the technology at an all-time low, the return on investment is better than it’s ever been. A report from McKinsey & Company found that the price of a UHF RFID tag has dropped by 80% in the last decade. That brings the cost down to approximately $0.04 per tag if printed in large volumes. Even the price of RFID readers has dropped by 50%.
The Benefits of RFID Technology in Today’s Retail Industry
As the technology matured, the applications associated with RFID became more trusted and expanded. RFID software solutions like PortalTrack from MSM Solutions allow retailers and suppliers to use the unique electronic product code (EPC) assigned to each tag to accurately trace the life cycle of the product from manufacturing to consumer purchase.
This means retailers can maintain better control over their inventory and ensure product availability enabling suppliers to respond to demand faster and more efficiently. More specifically, RFID solutions provide:
- Better insight into inventory availability.
- Real-time inventory tracking.
- Faster fulfillment processing times.
- More accurate real-time data analytics.
According to the South Florida Business Journal, some of the largest retailers believe their inventory numbers are flawed and they actually only have 50-65% of the inventory listed. However, research shows that RFID solutions increase inventory accuracy to 97-99%.
Combine the low cost of RFID, more accurate inventory counts, and RFID software solutions that give you better insight into your inventory and you have an inexpensive tracking system that helps you make more guaranteed sales while providing a great customer experience.
To learn how MSM Solutions can help you meet RFID requirement demands, check out how we help apparel manufacturers and brand owners gain better insight into their supply chain with RFID solutions.
MSM Solutions has helped some of the world’s largest brands meet their own RFID retail mandates so contact us and let us help you meet any new RFID requirements.
