RFID Making Headway In Asset Protection?

By Matt Pillar, editor in chief

Industry speculators have long examined the corollary and seemingly overlapping functions of item-level RFID for merchandise and supply chain visibility and EAS (electronic article surveillance) tags for shrink reduction purposes. It seems the convergence of these applications on one platform is moving along more rapidly these days, with Checkpoint Systems, Retailer's Advantage, Sensormatic and WG Security among the asset protection solutions providers putting a stake in the ground for RFID as a high-tech enabler of both merchandise visibility and protection.

With vested interest in this convergence given its lineup of products for shrink management, merchandise visibility, and apparel labeling, Checkpoint seems the vendor best suited to accelerating the convergence. Last week, the company announced the release of its RFID-Out-of-the-Box solution, a complete merchandise visibility package that includes a handheld RFID reader, a laptop computer, RFID software, RFID tags (hard tags and labels), and service and support. The solution is tailored for closed-loop apparel manufacturers and department stores. The company is touting the solution as one that combats sales and margin-stealing issues such as the 8%-or-more out of stock plague and perpetual inventory inaccuracy, which apparel retailers suffer from 35% to 65% of the time.

But with leading EAS suppliers like WG increasingly deploying separate item-level RFID tagging initiatives for shrink management purposes, has the time come for the integration of LP-enabling and supply chain-specific RFID technologies, deployed once on a single source tag and leveraged for both purposes through the lifecycle of the garment? Especially in mid-to-high-end, closed-loop apparel, the efficiency gains on the parts of retailers and manufacturers seem tantamount to adding a data package to your smart phone – you automatically at least double the application power of a single device. RFID enhances EAS by applying a layer of intelligence – while traditional EAS is a theft deterrent, it can't give retailers real-time insight into what's missing, how missing merchandise has impacted stock position, and the timing on replenishment of that lost merchandise. With RFID, there can be real-time reporting on all of it. Additionally, RFID tags solve the aesthetic dilemma that apparel retailers have for so long lamented with their traditional EAS tags.

So, what's stopping the widespread convergence of these two important applications for RFID on a single platform? Checkpoint first made waves with RFID-enable EAS tags back in 2003, and conjecture and speculation have ensued since. Sensormatic says that retailers require a range of EAS and RFID solution sets, but that there's no single migration path from EAS to RFID. The company lists breadth of the RFID implementation, price and velocity of items to be tagged, cost of EAS versus RFID tags, frequency of out-of-stock events, and the ability of a retailer's information infrastructure to manage the increasing flow of RFID data as considerations that seemingly stand in the path of this convergence. I look at these issues, and I see logic in creating a migration path.

I know, I raise questions here that I don't have the answers to, but I'd like to learn more about it. If you have a valid position on the feasibility of a common EAS/RFID platform in retail, e-mail me at matt.pillar@jamesonpublishing.com.