A one-store RFID trial that Staples ran this summer with reusable tags was successful enough to convince the retailer to expand it to four other stores in mid-February of 2008, said the retail chains IT executive in charge of the project.
The initial Staples Canada trial was an attempt to see if the key argument against more expensive active radio-frequency identification tags—which typically cost between $5 and $8 apiece—could be defused. Historically, retailers have avoided using such high-end tags on merchandise that doesnt cost more than $100, greatly limiting how much the technology could be used.
Theoretically, a reusable tag—which is removed at the point of sale—could radically change the chips economics.
Click here to read more about Staples trial of reusable RFID tags.
Joe Soares, director of process engineering for Staples Canada and Business Depot, said his team evaluated the trial and concluded that the cost per use over five years, assuming the chain paid the full market price, was 8 cents.
Soares said the trial continuously delivered a 100 percent accurate read rate and “a 21 percent reduction in out-of-stocks for the items that were counted.”
The chain also saw “zero percent shrink” on the tagged items, which Soares said was especially noteworthy because the tagged items were common theft targets such as MP3 players, laptops and desktop PCs.
“Those items are the ones that are very hot. They are high profile,” he said. “With it being a closed system, we knew right away if something was gone.”
The chain will mimic the initial Montreal trial by only tagging a very small percentage of each stores SKUs.
“We tested 1,500 SKUs and we are going to expand the same project to the additional stores,” Soares said. “The results were so great that we wanted to see if it was replicable throughout the chain.”
In the initial trial in June, the chain paid nothing for hardware costs because the costs were covered by supplier partners, including Fujitsu and AbsoluteSky. For the trial expansion to four more stores, Staples is paying the hardware bill, but Soares indicated that the rates it was charged by its suppliers were quite low. “The costs are indicative of them wanting to do business with us,” he said.
Retail Center Editor Evan Schuman can be reached at Evan.Schuman@ziffdavisenterprise.com.
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