The RFID Revolution with Ted McCaffrey

March 21, 2021



Our special guest, Ted McCaffrey, shares his expertise and experience with RFID retail technology to explain why it’s the future of retail. What is RFID technology and why are retail giants flocking to it? Is it worth the hype? Benefits of RFID? What is RFID used for? and How can retailers, big and small, leverage RFID tags to achieve a more comprehensive and transparent view of their inventory? 

  • We ask these questions and more of our special guest, Ted McCaffrey, self-proclaimed omnichannel enthusiast, former Sales Director at eBay, and consultant for Sensormatic. Ted is an RFID expert, which he believes is the key to achieving inventory visibility and flexible fulfillment.
  • In this episode, Ted provides examples of how retailers such as lululemon have implemented RFID to satisfy their digital-first customers and efficiently scan all of the inventory in their stores within an hour.

Conversation Rundown

[ 1:41-4:06 ] How has RFID evolved and enhanced retailing over time?
RFID technology is rapidly evolving, and rapidly being integrated into retail tech stacks. It's a transition from being a technology to being a solution. Tune in to hear Ted describe how RFID allows retailers to more accurately and easily track their product. Ted describes RFID as barcodes on steroids.

[ 4:52-6:45 ] How RFID helped Macy’s reduce their safety stock.
Macy's was struggling with finding products and completing orders in an efficient way. Think about the two departments that present an inventory nightmare: intimates and denim. With RFID technology, you can take a scan of a wall of denim and know exactly what you're missing. Macy's used to withhold safety stock for omnichannel availability (a billion dollars worth). When they started with RFID tags, they were able to scan their entire stores and reduce that safety stock to nothing.

[ 7:30-9:18 ] How long does it take retailers to implement RFID in-store?
Retailers don't need to roll out new initiatives across your store networks all at once. It's risky and failure comes at a high cost. Ted McCaffrey suggests rolling out RFID technology at 3-5 stores to start. The proof of concept takes about 6 months to understand how it works in your store, what the benefits are, and how to tie it into the planogram.

[ 15:04-16:29 ] What makes Ship from Store and BOPIS the greatest solutions of all times
Ted McCaffrey believes BOPIS and ship-from-store are the greatest solutions of all time. In his words, it means instant money. You are able to leverage your entire store network to leverage demand instead of focusing on a few isolated warehouses. During the pandemic, BOPIS has become a necessity. 20-30% of customers buy more when they come in-store to pick up.

[ 18:54-19:59 ] How Ship from Store helps to liquidate orphan inventories.
What is orphan inventory? In Ted's words, it's inventory that has been shuffled around and forgotten, often for years. With RFID technology, retailers are able to cycle-count that inventory in order to make it available to the customer. It flushes older or inactive items out quicker.

[ 23:10-25:48 ] How retail brands can measure ROI of the returns of RFID implementation.
Ted McCaffrey recounts his experience working with a luxury retailer that had to cancel or delay omnichannel orders because they couldn't find the items in time. There are a lot of labor dollars associated with finding inventory. When measuring ROI for this technology, it's important to focus on cancellations, split shipments, and the cost of counting inventory. Lululemon was an early adopter of RFID technology, and they're able to count their entire store every week in less than an hour.

[ 31:21-33:08 ] Role of RFID in future of stores
The more that retailers can take the friction out of the shopping experience, the more than can combine the physical and the digital, the better off they will be. Ted imagines RFID technology at the check-out process, reading the whole cart for you to make that process as easy as possible.

Meet the Expert

Ted McCaffrey, self-proclaimed omnichannel enthusiast, former Sales Director at eBay, and consultant for Sensormatic. Ted advocates store performance solutions like RFID. Since retailers are "shopping their own stores" with solutions like Ship-from Store and Buy Online, Pickup In-Store (BOPIS), there available to promise (ATP) on these solutions are off by 20%-50%. By implementing Internet of Things (IoT) technology like RFiD, retailers can improve their ATP to over 95%, and provide a seamless experience for their Omnichannel customer.

Retail Tips & Tweetables

RFID serializes every item so as opposed to a Barcode.

You’ve got a 1000 items at the same Barcode, with RFID it’s 1000 different license plates.

RFID enables you to see where an item is without actually hitting the barcode anymore. Wave a wand and get a geiger counter to find out where it is.

RFID integrates with your POS, items files, & OMS to give you a right to promise for Ship from Store, BOPIS, etc.

Macy’s scan their entire stores once a month with RFID and they are able to reduce their billion dollars of safety stock to nothing.

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