Myer dips toe into RFID
Myer will begin trialling handheld radio frequency identification (RFID) technology in the next six to eight weeks at a single store to develop proof-of-concept for potential broader rollout before the end of FY18.
RFID tags, which use electromagnetic fields to automatically identify and track tags attached to objects, will be trialled first on apparel lines that are considered high-risk for shrinkage.
The move is expected to increase inventory visibility, which will enable omnichannel initiatives and reduce costs associated with frequent stocktakes and general fulfilment.
Myer’s national retail operations manager Gary Stones is spearheading the project, which has been in the works for the last 12 months, following several years of discussion behind the scenes.
Speaking to an audience at GS1’s supply chain summit in Sydney last week, Stones said that RFID capabilities will be an important part of Myer’s ongoing competitiveness.
“I’ve been at Myer for nine years now and I remember having my first RFID conversation about five years ago,” Stones said. “Twelve months ago, I had a bit of a meltdown…I got my team together and said, ‘I’ve had enough of talking about RFID…we need to start taking action, we’ve been talking about it and have done nothing’.”
“We’ve got a whole series of international entrants coming to our shores, and many have already rolled out RFID…Uniqlo is a good example. I cringe every time I look at their tags with the little RFID logo on it out of jealousy.”
Stones cited Decathlon, Zara, John Lewis and Debenhams as examples of global brands expanding into Australia that use RFID technology.
Myer will start with handheld RFID scanners initially, which will see staff scan products with active inlay tags manually, but will look to implement overhead RFID scanners in more than five years if initial tests are successful.
Apparel, which is 60 per cent of Myer’s business, is the first category to be targeted for RFID functionality, with an indicative target for full coverage of two to two four years, Stones said.
No definite capital outlay has been attached to the project yet, but it is expected there will be fixed implementation costs and ongoing operational costs associated with the change.
Stones explained that his initial attempts to garner support for RFID action within the company fell on scepticism. Indeed, four weeks ago, chief digital and data officer Mark Cripsey told Stone, “You will never roll out RFID to an entire Myer department store in my lifetime.”
But subsequent discussions with Cripsey and CEO Richard Umbers convinced the executive team to trial the technology, as well as expanding its commitment to global barcode giant GS1’s local supply chain standards.
Stones is now a member of the Australian Retail RFID Alliance, a group engaging in anonymous group-buying of RFID hardware and collective lobbying of suppliers to move tag placement further up the supply chain to reduce labour costs.
Stones said the commercial case for RFID has improved substantially over the last five years, with RFID tag prices plummeting from more than a dollar to less than 20 cents.