Dive Brief:

• Macy's will RFID tag all store merchandise by the end of 2017, the RFID Journal reported recently.
• The use of RFID tags improves inventory accuracy by 32% and decreases out of stock item incidents by 50%. As a result, sales increase by 18%, Retail Wire said last week.
• RFID implementation continues to grow among retailers. Retailers used 5 billion RFID tags in 2016, but that number is expected to rise to 7 billion by 2017, according to IT Jungle.

Dive Insight:

Full RFID-implementation has long been in the works for Macy's: the store began its post-pilot stage of implementation in 2012, tagging only the store's more replenished goods, or 30% of its inventory. Yet even in 2012 the technology was over a decade-old, so what took the retailer so long to fully expand the technology?

One problem was a potentially over-hyped ROI at first, according to IT Jungle. A highly competitive market had priced the technology at $1 per tag in the early days, making full-scale implementation unfeasible for low-replenishment or low-sale goods.

In addition, 100% implementation requires all suppliers and distributors to comply with the retailers' demands, which was not always the case. Wal-Mart, for example, mandated RFID tagging for its inventory in 2003, but failed to enforce the mandate. 

So what changed? 

E-commerce made omnichannel a priority for retailers. As the point of sale changed for various companies, retailers found an increased need in supply chain visibility and inventory mobility. RFID tags facilitate this process, and increased the technology's ROI.

Of course, only time will tell whether Macy's successfully implements the technology but other examples show it is both possible and cost efficient.