Tyco Retail Solutions: ChainLink Research examines the ROI benefits of RFID for Retail

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As shopper expectations continue to grow, inventory accuracy and visibility is a business imperative -- and it starts with RFID. To help retailers determine if they are a good candidate for RFID, ChainLink Research has developed a comprehensive new methodology, based on proven use cases with retailers from around the globe.

Sponsored by Tyco Retail Solutions, this new recommended approach is outlined in the white paper, "Understanding Real-World ROI for RFID in Retail," and explores the ROI achieved in real-world retail RFID implementations. This research also identifies characteristics of a good RFID candidate and how the right deployment strategy can yield a substantial return. In addition, Tyco Retail Solutions has introduced a complementary RFID ROI estimation tool to help retailers determine potential value from RFID deployments in specific scenarios.

A natural follow-up to ChainLink's 2014 white paper, "Use Cases Driving the Current Surge in RFID Adoption," this latest report highlights dozens of proof points to support an investment in RFID today. For example, uplift on both revenue and gross margin combined with reductions in operating expenses, may deliver financial benefits that can justify the investment. As detailed in the white paper, Macy's has announced average revenue uplift of about 10% after implementing an RFID solution for highly complex categories, and Sears has reported revenue uplift of about 10% resulting from an RFID pilot. ChainLink also highlights multiple retailers with comparable revenue uplift in similar categories.

Ann Grackin, CEO, ChainLink Research, states, "Retailers have limited capital and multiple initiatives to invest in. In order to rank RFID in the portfolio of IT investments, they need a framework for understanding if it's right for them. Our new methodology breaks down the question by examining the mechanisms that create benefits, the criteria that make categories suitable for RFID and examples of results from the field." ChainLink recommends that retailers carrying high-potential merchandise categories should immediately perform the ROI analysis to prioritize RFID on their IT investment portfolio, while retailers with other categories should start the process of investigating the potential benefits and partnering with technology providers to learn more.

Tyco Retail's user-friendly and intuitive ROI estimation tool guides retailers through an easy two-step process customized to their specific business needs. Based on ChainLink's global industry research and experience, the new web-based tool calculates key potential financial benefits including sales uplift, gross margin increase, shrink reduction and labor savings as a result of implementing RFID technology. Results are delivered immediately in an executive- friendly format, to effectively communicate potential benefits to primary stakeholders.

The new white paper and ROI estimation tool provide the scientific approach and value that enables retailers to analyze if RFID is right for their business, and offers methodology to get started.