RFID Technology: An Omnichannel Star Behind the Scenes

Macy’s and Bloomingdale’s Omnichannel strategy helps drive the company’s growth by enabling us to give our customers what they want, where and when they want it. But first we have to find it! That’s where RFID – Radio Frequency Identification – comes in.

Though stores can effectively use barcode technology to identify, count and sell merchandise, the process is slow, costly, labor intensive and operationally disruptive – so much so that we’ve limited inventory to twice a year.

Now, through the leadership of a Macy’s cross-functional team, the adoption of RFID technology is transforming the way we count – 20 times faster than scanning barcodes, enabling associates to scan 5,000 to 10,000 units per hour.

“We now count monthly in RFID areas, giving us a much more accurate inventory file that is used to fulfill customer orders,” said Pam Sweeney, SVP/MLO Systems. “Accuracy has improved from 70 percent at the style-color-size level to greater than 95 percent. It’s another important tool to close the sale, because we know we have the merchandise and can locate it!”

RFID has been implemented in all stores to allow associates to take monthly cycle counts in areas with high replenishment of color, size and other factors, update inventory files for accurate reorder, and enable a more accurate and efficient display audit in Women’s and Men’s Shoes. In shoe displays, the missing sample rate dropped from 30 percent to less than five percent!

In the next three years, RFID is expanding to include all families of business with these focuses:

  • Expose “single unit inventory” – Pick to the Last Unit. Currently, 20 percent of our store inventory is in single last units. RFID will provide the accuracy and ability to locate the single units, opening up this inventory to our customers for Omnichannel selling.
  • Execute a more efficient selling floor merchandise fill-in (Back-to-Front) process, to ensure merchandise is fully represented at the color/size level on the selling floor from back stock. RFID will allow for a fast scan of the stock room to identify product not represented on the selling floor and generate a pick list to facilitate the fill-in.
  • Allow for easy counting in all areas to accurately update our inventory, reducing (and eventually eliminating) the need for barcode interim inventories.

“Working through these three elements is our main priority,” said Peter Longo, president of Macy’s Logistics and Operations. “RFID is the technology that is crucial to our success as an Omnichannel retailer.”

 

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