How to Implement RFID in a Store Quickly (Episode 016) at RFID Radio by Academia RFID

Find out about…

The benefits of item level tracking in a store;
How to implement RFID quickly;
A very interesting way of getting the most return on your investment.

Picture : Dan Lawrence, CEO of AgileTag and Matt Yeager from SSS Research at the RFID in Fashion 2008 tradeshow in New York City.

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AgileTag and SSS Research have teamed up to offer retailers an RFID tagging system that can be installed by store employees. This means a very lean and simple implementation.

Benefits of this item level tracking include:

Reduction of out of stocks
Increased sales between 5 and 10%
Better customer satisfaction
And (what every retailer is looking for)…reduced shrinkage.

Interview transcript :

Anthony Palermo (1:31) :
So we’re here at RFID Journal Live. RFID in Fashion in New York City. I’m sitting here with Dan Lawrence, CEO of AgileTag and I’m also here with Matt Yeager from SSS Research and they’re going to tell us a little about the benefits and the advantages of having smart shelves in the retail industry. Thanks for being with us Dan.

Dan Lawrence (1:54) :
Thank you. One of the overarching goals of item level RFID is to be able to provide the customer better experience because if you can do that by eliminating out of stocks for example, you can really drive sales not only your store and per unit or per shelf sales. By having RFID labels on items it allows you to have an automatic availability understanding, in other words, you look to your computer screen to see what’s on the shelves rather than having to manually go out and start counting sizes and shapes and products. And what’s being found is that you can increase sales in terms of tagged goods between 5 and 10% and there’s also some added benefits in terms of customer satisfaction but also reduced shrinkage and that’s very important for many products and many retailers. For example, the EPC code allows a unique identifier to be associated with a product and what that allows you to do is then at the point-of-sale register which products have left the shelf and when and then also which ones have been properly sold versus just disappear and that gives you some more insight into where problems might occur.

Anthony Palermo (2:55) :
Is your background in retail, working the retail industry or are you more on the technical side?

Dan Lawrence (3:02) :
My formal training is in materials science and engineering but as you know retail products are made out of materials and I’ve been able leverage some of those learnings. More recently I was an early member of the Auto-ID Center at MIT from the sponsorship of a partner company. I’ve been involved in the modern areas of RFID which really opens up the doors for item level with the reduced tag cost and what some companies such as our won are bringing as far as reduced infrastructure and implementation costs.

Anthony Palermo (3:30) :
Matt you coming into the RFID space, was this from a software perspective something that you saw the industry needed?

Matt Yeager (3:38) :
Definitely. We have a general tracking software product. You have all this information and the goal is hopefully to make better decisions once you have this information. We believe if you can display it geospatially on a map, be it for example the United States or maybe even of your store, you’ll hopefully be able to make better decisions and you’ll see patterns that won’t present themselves by just looking at the data in the spreadsheet or in the table.

Dan Lawrence (4:11) :
For example, having on overarching view of an entire enterprise, let’s say a thousand stores across North America, it’s possible to say allocate the data in such a simple way that green means you’re in stock of any given product, yellow means you’re getting low, and red means you’re out of stock and then clicking on the out of stock storage you can start to zoom in and see what’s available or what’s wired. Why do we have a problem here? What’s wrong with the distribution center? What’s wrong with our suppliers? All along the chain and have a level of visibility that is suitable for the boardroom as suitable as it is for the manager’s office and everything in between.

Anthony Palermo (4:46) :
What are the most popular applications right now for smart shelves? Is it promotions? Is it out of stocks or inventory control?

Dan Lawrence (4:53) :
Yes promotions are a great example. You spend the money on a lavish marketing campaign and now you want to know well did it work? In which demographic did it work? Which ad mix should we use? That’s a very very strong deployment opportunity. You deploy the system, you collect the data over a couple weeks and then you maybe redeploy it for another promotion. The other applications where RFID for item level is very valuable is for higher value or higher velocity items. In any store we like to say 80% of profits are from 20% of products. We start with that top 1%, you go to 2%, 5% you find your equilibrium value where maybe it no longer makes sense to deploy item level RFID until something else happens along the way and you stop there and you yield the maximum benefit but you minimize your costs.

Anthony Palermo (5:40) :
The value of the marketing data that you can pull from locating items or promotional stands or the lanes that people are using more than others, what’s the value to that marketing data for consumers or end-users in the retail industry.

Matt Yeager (6:02) :
By itself, almost nothing. But once you combine it with the rest of the data you have throughout your enterprise. Where it was purchased? How long it’s been in inventory? It’s the last piece of data that you can use to combine to make a wealth of decisions. It’s really endless once you add the geolocation piece in there.

Anthony Palermo (6:23) :
Could you tell me a little bit about the product that you developed because it’s an in-house products developed by you guys. How long has it been on the market? What are you doing with it right now? What type of deployments are you guys working with? Tell us a little about how it works.

Dan Lawrence (6:36) :
What’s novel about our approach is it’s really a hybrid between a fixed infrastructure which is professionally installed rigidly implemented and a handheld infrastructure which again at 2000-3000 $ a unit allows an employee to walk around and manually scan things. We’re somewhere in between there. We’re certainly lower in costs then either of those solutions. But what’s important is you can deploy it permanently, semi-permanently or perfectly temporarily and then redeploy it very easily. What we’ve done is we’ve taken all the functionality of a reader and we’ve condensed into one small convenient module that you can leave in place as easily a signage and in doing so you’re able to have visibility of RFID but without the cost and the implementation and infrastructure cost that other systems have provided. The other thing that’s going on behind the scenes is we also upconvert the tag identities from the local area, a few feet across, all the way to a different frequency and then radio that date over great distances for example up to a about hundred yard, a hundred meters. What that allows you to do is deploy the infrastructure throughout a store. In the case of a small store you can use 1 hub. In the case of a large store you can obviously use several. To get that data to your network and then to a software application such as the one ThincSoft provides and then you are able to get out to the rest of the world.

Anthony Palermo (7:52) :
Tell us a little about of the ThincSoft software works and communicates with the agile technology.

Matt Yeager (8:00) :
It’s a web-based client. So all you need for your clients is a browser which almost everybody has throughout their enterprise. What we do is we communicate directly to the readers and we import the data. Then we will geocode it or add the information to tell you what the latitude and longitude – where it is - and then from there we can display it on out client via the browser.

Dan Lawrence (8:26) :
A nice synergy about our partnership it that our hardware requires no professional installation. It’s basically putting a sign in place and flipping a switch. Their software, because it’s running on a web browser and pretty much any computer has a web browser, there’s not really a need for the cost and expense and complexity really of a professional installation. Now that obviously is something we can offer but in many cases that’s not necessary.

Anthony Palermo (8:52) :
Basically if someone purchases your equipment and this software together, there is no physical installation requirements that happen at their store?

Dan Lawrence (9:02) :
Yes in general. Again there will always be some level of tweaking that my might be needed in a given given environment but in general there is an out-of-the-box test that allow them to know whether within a half an hour weather or not their products can be successfully tagged; within an afternoon weather it will work in their typical stores. Then as they collect data over a couple weeks time, they’ll see if to starts to make value for them.

Anthony Palermo (9:23) :
Can you tell us a little bit about any of your customers that have used it? About their benefits? Or the results that they’ve had?

Dan Lawrence (9:29) :
We’ve gotten a number of customers that are evaluating our products in their labs. Some very very large names which you will have heard of. We’re not presently at liberty to discuss those openly but hope to later this year. What they found so far is really that we enable them to do things that they didn’t think they could do before. In other words, the ease of deployment has really been attractive.

Anthony Palermo (9:53) :
What I was seeing at the booth when I came by before was that people can basically use it in certain area of the store and if 2 weeks later they want to track some other product, they can just take it, remove it and place it over a little bit further.

Dan Lawrence (10:08) :
That’s the beauty of it. They’re not committed to hardwiring or a AC line drop at one particular area that they’ve got to commit to. They can disperse and in our philosophy is item level RFID is not going to happen shelf by shelf, that’s a technology push. It’s going to happen product by product, which is going to be a market pull. And our platform is perfectly suited for that.

Anthony Palermo (10:27) :
That’s great. If people want to reach you, where can they contact you?

Dan Lawrence (10:31) :
Visit our website AgileTag.com. You can find out a little bit more information and feel free to e-mail me. You can reach me at dan@agiletag.com.

Anthony Palermo (10:42) :
And you Matt?

Matt Yeager (10:43) :
You can reach us at either SSS Research or Thingtracks which is the name of our product.

Anthony Palermo (10:49) :
Thank you very much and hope you have a great conference.

Links to topics discussed in the podcast :

Academia RFID

RFID in Fashion in New York City

Agile Tag

SSS Research (ThincSoft)

EPC code

Auto-ID Center at MIT

Thingtracks (VisTracks)

The podcast that helps you create value in your business with RFID.