Many factors contribute to these sales increases, but most experts agree that RFID's ability to put the right product in the right place at the right time is crucial, especially given that customers have nearly a 10 percent chance of finding their product out of stock on the retail shelf, according to a March 2008 AMR Research, Inc. article by John Fontanella.

When items are misplaced (on the wrong shelf, in a fitting room, or in a back room) or not on the sales floor, retailers experience both "hard" and "soft" losses. The "hardest" loss is a lost sale, and it's more common in apparel and footwear than in, for example, grocery, where an out-of-stock situation mal simply result in a consumer choosing a different brand of their desired product.

"Soft" losses can take a variety of forms. The time salespeople spend looking for a product could certainly be spent more productively - especially if they ultimately can't find what the customer wants. The customer's negative perception of the retailer, which began when they were unable to find the product or their own, has now been compounded by having his or her time wasted waiting for the salesperson. And the salesperson is placed in the position of placating an angry or disappointed customer rather than pleasing a satisfied one.

Compare these scenarios to the information-rich store made possible by item-level RFID. Improved inventory accuracy and more efficient restocking means the product is more likely to be on the right shelf in the first place.

If it's not, "smart" shelves as well as back-room and fitting-room readers vastly speed and simplify product location. Even if the product is not in the store at the time, improved data availability allows sales people to give customers definite information-or to offer an alternative that is in stock. In this environment, both this particular sale and any number of future sales can be saved.

Deployments on the Rise

The desire to create these information-rich shopping environments is one element fueling a sharp rise in RFID deployments."1 see 2009 shaping up as a very big year for item-level RFID in apparel and footwear," says Kay. In addition to the consistent sales increases demonstrated by previous deployments, he cites a number of other converging factors:

• Deployments are Getting Simpler:
  

"Customers have nearly a 10 per cent chance of finding their product out of stock on the retail shelf," says John Fontanella, AMR Research.

Vendors now offer a number of out-of-the-box tools, such as reader and shelf packages and reporting applications, for retailers' RFID solutions, so there's less need for custom applications and complex systems integration efforts. Kay notes that in 2007, a U.S. specialty retailer was able to RFID-enable one of its stores in under 75 days. The retailer was quite pleased with the results and is planning to quickly deploy these capabilities to several more of its stores.

• Lower-Priced Items are Being Tagged:

Retail price points of tagged clothing have dropped and are continuing to so, with the lowest U.S. retail price currently at $8 and reaching as low as $6 in other parts of the world. "This blows away the myth that RFID is applicable for moderately priced expensive items, and shows that RFID is usable and economically justifiable at even modest price points," says Kay.