Retail sector rolls out state-of-the-art tracking technology

An effective supply chain is crucial to retailers wanting to meet customer requirements and minimise wasted products.

Automated inventory tracking (AIT) enables retailers to monitor the movement of each product in the supply chain with unprecedented accuracy and efficiency.

The market is growing so rapidly that US-based analysts Venture Development estimate the global market for technology involved in AIT will rise from last year’s US$24 million to US$192 million by 2010.

After an extended period of pilots and trials, a number of retailers are beginning to deploy the technology in their stores across the UK.

Marks & Spencer takes the lead

Leading the way is Marks & Spencer, currently enjoying its highest profits for a decade.

Since 2005 the retailer has been trialling radio frequency identification (RFID) technology – which allows goods to be individually tracked using electronic chips.

Earlier this year it began a roll-out of the technology across 120 (over a fifth) of its stores in the UK.

So far the company has been using the chips in six different clothing departments, focusing on ‘size-complex’ items such as men’s suits, and has now announced that this will expand to 13 of its clothing departments over the summer.

The benefits of the system include precise inventory tracking, helping to ensure that the right products appear at the right time in the right place on the shelves.

Time-saving technology

Marks & Spencer staff report that the technology is easy to use, and allows them to carry out weekly stock-checks in an hour: previously these would have taken eight hours.

The tracking chips are included in each item’s swing tag, which also contains its bar code and detailed information on product type, size and colour.

Marks & Spencer has avoided some of the security issues associated with RFID by using these tags, which can be easily removed after purchase.

Another option is to hide the chips in labels, but this has been criticised for potentially invading consumers’ privacy.

Outpacing other developers

Other major retailers, including Tesco and ASDA, have been conducting their own trials of the technology in the UK.

ASDA plans to incorporate AIT in internal logistics tracking this year, and Tesco introduced it on a trial basis in its Northern Ireland stores in April.

John Davison of technology analysts Gartner says, “RFID will probably be the most important piece of technology since point-of-sale retailing, and in the UK we’re moving faster than just about anybody else.”

Entering a new phase

Andy Lee, of RFID technology provider Cisco, also sees the technology moving forward.

He says, “The retail industry in general has been diligent with its trials, and the likes of Tesco and Marks & Spencer are now starting to see a return on investment.

“We’re entering the next phase where a lot of good work has been done and a lot of the standards about how data is turned into intelligence are shared between manufacturers.

“The industry is now poised to turn those pilots and trials into wide-scale deployments.”

Story links

Venture Development

Cisco Systems