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On the Horizon: RFID Unwired for Retail

By: Stephen Cloughley, Senior Director of SAP’s Traceability & Serialization solution

RFID is traditionally viewed as a system for tracking parts or goods through the manufacturing process and supply chain.  However, RFID, paired with SAP Auto-ID Infrastructure (AII), can also provide major benefits for merchandise in the final stages of its journey —when it is on the shelf of a brick-and-mortar retail store.


Unlike traditional UPC barcodes and readers, RFID (Radio Frequency Identification) has a longer range, enabling readers to scan an entire stack of jeans or rack of jewelry instantly, rather than individually matching each barcode to a reader.  RFID, paired with SAP AII, can create, capture and transform products’ serialized data into meaningful business information such as  real-time inventory status, replenishment data and sales volume.


Perhaps it would be best to illustrate RFID’s benefits through a real world retail example.  A leading women’s clothing, shoes and accessories retailer implemented RFID in a distribution center and two stores.  The result? Major benefits in inventory accuracy and labor efficiency.  The stores achieved 97-99% inventory accuracy, as opposed to 75-95% from before.  Time spent on counting merchandise in the stockroom was reduced from 16 hours by a 3rd party inventory-tracking vendor to 1.25 hours by a store associate. In addition the average time spent during a stock room search was reduced by 18%.


However, one of the great “hidden” benefits  of RFID is that it improves customers’ in-store experience. RFID tags encode a rich set of data, including size, color, style, etc.  When a customer asks an associate for certain sized shoes, the associate can instantly check on a handheld PDA to see if they are available.  If they are out-of-stock, the associate can then use RFID data on the shoes to cross-sell and suggest a similar style that is in stock.  Keep in mind that during this entire process, the sales associate is still by the customer’s side, providing utmost service and support.


RFID with auto-ID infrastructure marks the next generation of inventory tracking, labor management and customer experience enhancement technology.  SAP offers a full suite of solutions for auto-ID, item serialization, and mobility. 


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