RFID has been a vital retail technology for almost 20 years, but what started with a simple beep at the exit is now a critical piece of enterprise-wide loss prevention and inventory intelligence strategies. And while its uses in retail are many, it is RFID’s unique ability to counteract organized retail crime (ORC) that’s become a much-publicized area of focus during the pandemic.
To explore how RFID’s abilities to interdict ORC have matured—and how they continue to add value by protecting inventory from warehouses to storefronts and beyond—Sensormatic Solutions recently held a virtual event, “The IoT of Retail: Using RFID to Bring Down Organized Retail Crime.” The event featured Joe Coll, vice president of asset protection and strategy at Macy’s, who spoke at length about the retailer’s ongoing RFID journey and the value it continues to deliver.
Major ROI From Humble Beginnings
Today, Macy’s leverages RFID for a variety of mission-critical roles, but according to Coll, that wasn’t always the case.
“We’ve been at this journey now with RFID for some time at Macy’s, and it didn’t begin where it is today,” he said. “We began in a simple format for RFID, just merchandise visibility for our customers that were coming into our brick-and-mortar locations and making sure that we had the representation of product on the floor that our books told us we did.
“But what’s really exciting is that it hasn’t stopped there,” he added. “We continue to grow and iterate on RFID as an organization. We continue to push our merchant partners and our vendors to understand the unlock value of RFID tagging their product at the source.”
But what started purely as an inventory play soon bore fruit as a loss prevention tactic.
“Shortage visibility is completely tied to merchandise visibility,” Coll said. “As we grew RFID at Macy’s, we began to migrate out of just doing a financial inventory once a year in January, to start doing a monthly cycle count in our stores, scanning every EPC that was on our products every 30 days, resetting our book stock in our stores, and in essence, being able to understand what the report card was in the last 30 days.”
This, Coll said, enabled the retailer to pivot from setting a single yearly loss prevention strategy to being able to pivot and iterate on a rolling 30-day cadence.
“Having the ability to change that strategy every 30 days and continue to talk about it with the store leadership led to a significant improvement in our stores’ ability to execute and deliver results on those strategies.”
An Incredible Unlock
While shoplifting and other forms of retail fraud are nothing new, retailers have been so impacted by ORC during COVID-19 that law enforcement and legislators from Florida, Wisconsin, Virginia, and beyond have begun to tackle the issue in earnest. In terms of pure revenue, shoplifting alone now costs retailers 2-3 percent of their overall sales, compared to just 0.7–1 percent prior to the pandemic.
“What you’re seeing in the media over the past 24 months is just the sensationalizing of all of the retail theft that’s happening,” Coll stressed. “It’s on the mind of every CEO.”
But it’s not just the revenue loss from stolen inventory that’s keeping CEOs up at night. It’s also the lost productivity resulting from the countless man hours required to identify what went missing, who took it, and gathering the evidence required to build a criminal case.
So how can RFID put those CEOs’ minds at ease?
“Historically, if somebody walked out of a retail store with an electronic article surveillance (EAS) tag on a product that they had stolen—or on 100 products—you would have no idea of the difference,” Coll said. “Furthermore, you wouldn’t even know which item they walked out with. You’d just know that the item they walked out with actually had an EAS tag on the product. But when you introduce the ability to combine EAS with RFID and video of the event, you unlock the game of ‘whodunnit.’
“Now, you’re answering the who, the when, the what, and the how. In the past, getting that answer took a lot of labor and investigative support,” he said. “Having a technology at our entrances that’s truly connected across our entire network gave us the ability to incredibly increase the efficiency of this process. It truly gave us an incredible unlock.”
Get More Insights Today
To learn more about how RFID delivers value to Macy’s and other retailers, view the recorded webinar today.