Where’s that sweater you want to buy? High-tech tags help retailers track it down
Hold the tags dangling from a T-shirt at a retailer like Target or Levi’s up to the light, and odds are you’ll see one with paper-thin electronics embedded inside.
Most shoppers likely never notice them. But those tiny radio-frequency identification, or RFID, tags are what help some retailers accurately promise you that the sweater you’re eyeing online is in stock at your local store and, when you fail to find it on the rack, track it down in an abandoned dressing room pile.
You’ll likely see more of them. In just the last two years, the share of apparel retailers using or piloting RFID technology has doubled, according to a 2016 survey by consulting firm Kurt Salmon.
The technology isn’t cheap. But retail industry experts say the potential to bring some perks of online shopping to brick-and-mortar stores while making it easier to keep up with impatient, time-pressed customers is convincing more companies the tiny tags are worth it.
Old-school inventory tracking methods, relying on employees hand-counting product on the sales floor, are too time-consuming to do often enough to provide the kind of accuracy retailers need to reliably tell customers whether an item is in stock at a local store or fulfill online orders from stores, industry experts said. RFID technology takes out much of that legwork.
About two years ago, before activewear-maker Lululemon Athletica’s push into the technology, the company internally tested its buy online, pick up in store service in New York. More than half the time, Lululemon was unable to fill the test orders because of supply issues, Jonathan Aitken, the company’s information technology director, said at a retail industry trade show last month.
“That’s a terrible guest experience,” Aitken said.
Lululemon finished its RFID rollout in North American stores in September 2015. On a typical day, it now only cancels 1 to 4 percent of those orders, Aitken said.
Information from the techie tags also helps Lululemon keep sales floor displays stocked, and when a size or style does run out, employees use handheld devices to check whether an item is available without going back to the storeroom. Shoppers can get the same information through the retailer’s app, which Aitken thinks boosts sales since customers won’t assume products not found on the rack are sold out.
Early adopters already are working on more creative uses for the technology.
At the trade show, Lincolnshire-based Zebra Technologies Corp. and Intel Corp. each displayed systems that combine a network of ceiling-mounted sensors throughout the store with video cameras and other devices to collect more detailed data, similar to how retailers can monitor a consumer’s use of its website. In other words, merchants can track an item’s every move through a store.
That kind of system, tracking the movement of merchandise around a store, may seem Big Brother-ish to consumers. Indeed, Zebra says the system can deter theft since it can signal when a shopper carries a pricey item past checkout without paying.
But RFID tags also could help retailers determine why a particular item might not be selling well, Intel said. For instance, instead of simply noticing a shirt isn’t selling, a retailer might see that it’s often brought to the dressing room but rarely purchased, signaling a potential problem with fit.
Levi’s is piloting Intel’s Responsive Retail Platform. Zebra said three North American retailers, which it declined to name, are testing its SmartSense for Retail system.
Despite the recent uptick in interest, the technology isn’t new. Retailers have been testing RFID since the early 2000s, but at the time, it was hard to justify the cost, said Al Sambar, a Kurt Salmon managing partner.
Customers still shouldn’t expect to see the radio frequency tags in every store.
Merchants that sell multiple brands need to convince each vendor that the technology is worthwhile or foot the bill for tagging products once it receives them — an extra step with costs that add up. If only a fraction of the retailer’s merchandise carries tags, it might not be worth outfitting stores with the technology to read them.
Macy’s told RFID Journal last year that it plans to tag every item in its stores and fulfillment centers by the end of 2017 and Kohl’s is testing the technology to see whether it delivers on promises of a better customer experience and higher sales.