Bloomingdale's Tests Item-Level RFID

Adding to the growing body of research and studies it has developed in relation to the use of RFID in the supply chain, the RFID Research Center, a part of the Information Technology Research Institute (ITRI) at the Sam M. Walton College of Business at the University of Arkansas, has published the results of a 13-week item-level tagging initiative it had conducted at Bloomingdale's stores last fall. The study's authors determined that when the retailer relied solely on its current inventory management system (which shows what should be on hand based on what has been received in shipments and what has been sold), the accuracy of the inventory decreases over time. But when inventory was counted using RFID, the accuracy was improved by 27 percent. The researchers also found that using RFID to identify and count individual items took, on average, 96 percent less time than using bar codes for the same task. Finally, they found that using RFID to determine which items had been stolen helped further improve inventory accuracy.

Retailers devote a great amount of resources toward improving inventory accuracy because inaccurate inventory levels can lead to either out-of-stock products, resulting in lost sales or overstocks, necessitating that retailers discount product prices in order to sell excess inventory. Some studies have shown, however, that retailers' perpetual inventory counts (that is, the amount of stock retailers believe they have in their stores at any given time) can be more than 55 percent inaccurate.

Used with permission from RFID Journal, Inc.