RBTE 2016: M&S and Tesco discuss RFID's unexpected benefits

Representatives from two of the UK's largest retailers, Tesco and Marks & Spencer (M&S), have revealed some of the unexpected benefits of deploying RFID in their business operations.

Matt Newby, head of technology at Tesco, and Richard Jenkins, head of RFID strategic development at M&S, were commenting on the technology last week, as part of an RBTE panel debate, chaired by Touch Technologies' international sales director, Mark Tailford.

Jenkins, who has overseen the RFID tagging of M&S's general merchandise ranges to the point that the vast majority of non-food is tracked with the technology in an attempt to improve accuracy and minimise out-of-stocks, said there are a number of surprising routes the company's RFID implementation has taken.

"I'm inundated with requests from our suppliers and third-party logistics companies all around the world saying to us 'we know what RFID is and we're seeing increasing quantities of your products arriving into our warehouses or we're attaching these tags to products at your request and we have issues that we think RFID can help us address, would you mind cooperating with us so we can use these tags in our own operations?'," he explained.

"[There is a] level of take-up and enthusiasm and wanting to get on board, and not minding that it's going to lead to an investment in hardware, software and integration because they can see the prize is there for them, as it is for us. If you told me that was going to happen to quite the degree that it has, I would have been somewhat surprised."

Jenkins said that M&S's partners' willingness to explore the potential of RFID is a sign that small and big businesses alike view the technology as a positive investment in their futures.

For Newby, a central benefit of RFID has been the vast swathes of new data entering the business, which provide information on how stock moves from warehouse to shop floor and back again. It is now up to Tesco, he said, to work out how to use the information to drive its operations.

"We generate about 25 million bits of new data a week [it is expected to be 50 million when the roll-out is at full scale]," he noted.

"What we are looking at is how this data can start to lead our operations; how can we start to take away non-value-add activity? This is where RFID starts to come to scale and come to that particular party."

Tesco's RFID project, which one of its vendor partners, SML, recently described to Essential Retail as potentially world leading when it is completed, covers the grocer's F&F clothing range.

Both Jenkins and Newby acknowledged that incorporating RFID throughout entire ranges is advisable for it to have maximum benefit, and they have identified the technology can play a key part in ensuring staff are deployed in more customer-facing roles, as opposed to routine administrative projects such as stock-counting. The Tesco technology boss says that RFID has allowed the F&F operation to "become more predictive in what we do" and to start looking at other issues down the retailer's supply chain.

Jenkins remarked: "We've got to a point where it's almost as good as it gets in in-store accuracy and your ability to be able to serve your customers better as a result of that change.

"For you to run your company with 90-95% of your inventory RFID tagged, with all of the capability that enables you to have around payments, process efficiency, stock taking and so on, to have a rump of remaining non-RFID categories merely adds cost to your operation so you get to a tipping point whereby you just want to do the last few [items] because why wouldn't you? Completeness is a prize."

Jenkins also suggested there is not one vendor that has the best of every solution required to implement RFID, and advises retailers to "cherry pick" from a range of suppliers.

He argued that the not-too-distant future will see the majority of retailers using RFID within their operations, and those not investing in it will be viewed as unusual. He also recommended that businesses making the investment in RFID should focus on performance over cost.