Macy's Accelerates RFID Adoption

Macy's, Inc. announced that its Macy's and Bloomingdale's stores are adopting RFID (radio frequency identification) technology on an accelerated timeline to more precisely manage item-level merchandise inventories. By the third quarter of 2012, the company expects to begin using RFID in all stores nationwide to count size-intensive "replenishment goods"—those items regularly stocked and automatically resupplied as they are sold to customers. This represents about 30 percent of the company's sales.

Macy's, Inc. will be among the first retailers to implement RFID on a broad national scale. The company has been testing RFID technology for nearly two years in selected Macy's and Bloomingdale's stores and distribution centers. Use of RFID to precisely track replenishment goods on-hand by size, color and style is expected to be completed by fall of 2013 in all stores.

"To Macy's and Bloomingdale's, RFID is a tool to better serve customers and drive sales by ensuring we have the right product in the right place at the right time for our in-store and omnichannel shoppers," said Tom Cole, chief administrative officer of Macy's, Inc. "RFID will allow us to more frequently count item-level inventory with precision so our inventory is readily accessible to our customers. This is technology that has proven effective in our testing, and we believe now is the right time to roll out RFID aggressively."

With RFID, Macy's and Bloomingdale's store associates can count inventory significantly faster. This will enable multiple counts throughout the year compared with the current practice of taking a physical inventory once a year. Testing has shown that, on average, inventory accuracy can be maintained at 97 percent or better. Frequent counts will also help ensure the correct placement of items in the right range of sizes, colors and styles on the selling floor.

Macy's is also collaborating with suppliers and technology providers through the Voluntary Interindustry Commerce Solutions Association (VICS) and GS1.

"Our vendors are joining with us to adopt this technology, knowing the more precise inventory counts through RFID will reduce stock-outs and drive incremental sales opportunities," Cole said. "This is one of those genuine win-win-win situations in which customers, vendors and our company all benefit." The initial 2012 launch of RFID technology will be in size-intensive replenishment categories such as men's furnishings, intimate apparel, men's slacks, denim and women's shoes in each store nationwide. Macy's and Bloomingdale's private brands are included in the initiative.