In one of the largest RFID projects undertaken in retail yet, Target (NYSE:TGT) will roll out radio frequency identification technology later this year for pricing and inventory control.
The retailer is working with key vendors to speed up the timeline to begin inserting RFID "smart labels" on price tags that will help improve inventory accuracy while enhancing Target's in-stock position, wrote Keri Jones, executive VP, Global Supply Chain and Operations, in the retailer's online forum for executives.
"This unobtrusive but significant technology will increase efficiencies by providing greater visibility into our inventory. That means guests will better be able to find out whether we've got the item at their Target store or at others nearby," Jones wrote. "We also expect RFID to help us better fulfill online orders placed for store pickup, which already account for 15 percent of Target.com purchases."
The RFID rollout will start in a small number of stores late this year, then expand to all Target stores in 2016. The program will include many key categories such as women's, baby and kids' apparel, and home decor, Jones noted. If the rollout is successful, this will be one of the biggest RFID projects in retail.
"We're starting with these areas because guests love our style offerings and because they are some of our most popular store pickup items," she wrote.
"My team and I are thrilled about technology's considerable role in upping Target's operations, and in particular, bringing near-complete store inventory accuracy within reach for the first time with RFID. Because at the end of the day, the technology we use to manage the supply chain helps ensure our guests find what they're looking for."
As more consumers shop Target online, they expect a seamless experience between digital and stores. "Adopting technology like RFID is one big step Target is taking to make sure we deliver," Jones wrote.
Target is a sponsor of the RFID Lab at Auburn University, which opens its new facility this week. "Together with the staff and students at Auburn, we'll explore additional ways that RFID tags can enhance the shopping experience," Jones added.
Despite a long period of testing hindered by the slow economy of 2008-2009, retail adoption of RFID is now a more concrete reality, according to Bill Hardgrave, dean of Auburn University's Harbert College of Business and founder of the RFID Research Center.
"In the long run, bar codes and RFID will coexist in a portfolio of auto-ID technologies. Because of their similarities—both auto-ID, both used in retail—comparing the adoption rate of the two technologies puts the pace of RFID adoption in perspective," he wrote in the RFID Journal.
While item-level RFID is about five years old, the technology is used in thousands of stores. It took bar codes more than 20 years to reach critical mass in the retail market.
"RFID 'insiders' would like to see a faster pace of adoption, and RFID 'outsiders' question whether the technology will become as pervasive as bar codes," Hardgrave wrote. "Looking at RFID's brief history and the obstacles the technology has had to overcome, I believe its adoption is on target and we will see widespread use in the near future."
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