Executive Briefings

Benefits of RFID Technology to Apparel Industry Are Many, and ROI Is Assured

RFID retail inventory management can deliver benefits for most apparel retailers now. The basic handheld solution is not hard to understand, delivers real ROI and has a relatively low investment hurdle. Yes, employee training and compliance is a headache, but this is true for many jobs in retail, and it does not change the fact that significant sales uplift is not only possible, but typical.

According to our analysis the ROI for RFID in apparel retailing is so strong that it is surprisingly insensitive to the price of tags. Retailers with a high proportion of replenished items like basics can expect sales uplift just from having well-stocked shelves. For those with fashion and seasonal items, avoidance of markdowns from better inventory visibility will boost gross margin dollars. Both can expect reduced shrink from better ability to discern loss patterns. Beyond this low-hanging fruit, the inventory visibility RFID provides is an asset for retailers implementing omnichannel strategies.

Retail adoption of RFID for apparel has lifted off and will only accelerate as the number of brand owners and retailers using it grows. We even see some of these retailers deciding to tag all general merchandise.

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According to our analysis the ROI for RFID in apparel retailing is so strong that it is surprisingly insensitive to the price of tags. Retailers with a high proportion of replenished items like basics can expect sales uplift just from having well-stocked shelves. For those with fashion and seasonal items, avoidance of markdowns from better inventory visibility will boost gross margin dollars. Both can expect reduced shrink from better ability to discern loss patterns. Beyond this low-hanging fruit, the inventory visibility RFID provides is an asset for retailers implementing omnichannel strategies.

Retail adoption of RFID for apparel has lifted off and will only accelerate as the number of brand owners and retailers using it grows. We even see some of these retailers deciding to tag all general merchandise.

Read Full Article