"If you walk into our stores and said you're going to take RFID away, our associates would probably kill you." That's how Jonathan Aitken, lululemon athletica's director IT, store technology operations and RFID program director, described how passionate the company's store employees are about the game-changing technology that was rolled out in 2014.
And for good reason: RFID adoption is accelerating as retailers discover its potential to address major challenges such as inventory accuracy, says Dr. Bill Hardgrave, dean of the College of Business at Auburn University and former director of the RFID Research Center. Across retailers, average inventory accuracy hovers around 60 percent to 65 percent, and some laggards are as bad as 28 percent. "And they're still in business, remarkably," he says.
The Center's most recent June snapshot documenting RFID activity found that 30 percent of retailers are in the proof-of-concept stage, 25 percent of piloting and about 40 percent have deployed RFID fully or in phases. After years of talk, the industry finally is taking action.
Lululemon's primary objective for RFID was elevating the customer experience. "The best way to make customers happy is to give them as many choices as possible," Aitken says. At the beginning of the rollout, the company found that it typically had about 250 SKUs out of its 15,000 SKUs in store that were in the stockroom and not available on the shop floor. Today, with RFID fully enabled the number of SKUs languishing in the stockroom stands at about 25 — roughly a 90 percent improvement.
Adidas deployed RFID in 450 Russian stores over nine months, focusing first on "fixing the basics" of stock accuracy and on-floor availability before rolling out omnichannel capabilities, which has had a positive impact on NPS, says Tobias Steinhoff, senior director, business solutions, global sales, direct to channel and franchise for the adidas Group. The company had discovered over the years certain "detracting factors" that kept customers from recommending the store to others, including assortment width and depth, and slow customer service. RFID has helped get the NPS score up. "On-floor availability is directly correlated with size availability," Steinhoff notes. "Speed of service is faster with RFID integrated into POS."