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A new report on retail item-level RFID adoption highlights where RFID item-level tagging provides the greatest value along the value chain, who stands to benefit most from RFID, and which merchandise categories are best-suited to deriving tangible benefits.
The US Voluntary Interindustry Commerce Standards Committee (VICS) and the American Apparel & Footwear Association (AAFA) have announced the release of a report entitled 'Moving Forward with Item-Level Radio Frequency Identification in Apparel/Footwear'. The report was prepared by Kurt Salmon Associates (KSA) with assistance from industry members.
The report is the result of a four-month study of business practices and process impacts of RFID on manufacturing, distribution/logistics, inventory management, store operations, finance, loss prevention, and merchandising, to help member companies determine the right starting point for RFID evaluation.
Retail comes first
The study asserts that for companies to derive benefits from item-level tagging they should look first to the retail store environment, where significant payback can be achieved quickly and provide funding for upstream RFID-enabled processes.
"The results of the white paper indicate clear benefits for RFID item-level tagging for the apparel and footwear value chain, especially at the store level. Companies running pilots are beginning to realise the potential benefits of this technology," said Mary Howell, Vice President, Industry Relations, American Apparel & Footwear Association.
Absorbing the investment
Another key finding is that no single upstream process can absorb the tag and infrastructure investment of RFID, but when combined with retail-level benefits, incremental costs can be offset by improvements in operational efficiencies, shipment and billing integrity, and brand margin performance.
According to Joe Andraski, President and CEO of VICS, "Item-level RFID has the potential to bring new levels of inventory visibility and profit improvement, which could not be achieved through conventional means, across the apparel industry. We encourage retailers and suppliers who embark on item-level RFID to responsibly address consumer privacy concerns by adhering to EPCglobal's Guidelines for Consumer Privacy."
The full report has been made available for download from the VICS web site, the AAFA web site, and KSA's web site.
Sources: Kurt Salmon Associates; AAFA; VICS
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