The Retail Industry Leaders Association
Representing The World’s Leading Retailers and
Their Product & Service Suppliers
U.S. Department of Commerce
RFID Workshop
Mission & Values
• The Retail Industry Leaders Association (RILA) is an
alliance of the world’s most successful and innovative
retailer and supplier companies – the leaders of the
retail industry.
• RILA members represent more than $1.4 trillion in sales
annually and operate more than 100,000 stores,
manufacturing facilities and distribution centers
nationwide.
• Its member retailers and suppliers have facilities in all
50 states, as well as internationally, and employ millions
of workers domestically and worldwide.
Sample Membership
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AutoZone
Best Buy Company
Dollar General Corporation
Family Dollar
The Home Depot
The Gap
Lowe's Companies
METRO Group
Michaels Stores
Petco
Petsmart
Target Corporation
Tractor Supply Company
Wal-Mart Stores
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3-M
American Greetings
Coca-Cola USA
Eastman Kodak
Energizer
Federal Express
The Gillette Company
Hallmark
Johnson & Johnson
Procter & Gamble
UPS
Unilever
Time Retail, Inc.
VF Corporation
Williamson Dickie
Status of Retail RFID
Implementation
• Still very much in infancy
– As a whole, industry is in a discovery & exploratory
mode.
– Wal-Mart supplier mandate
– Albertson’s & Target have issued compliance targets
– Globally, Metro AG issued a November 2004 target
Retailers and Suppliers Are
Optimistic About the Future of RFID
• 78 percent thought RFID would eventually meet or
exceed today’s expectations
• Considerable concern about immediate costs and
complications of implementing RFID
• Desire to invest smartly and get the basics of RFID right
before extending it to the entire supply chain
• Top concerns remain ROI, Security and Privacy and
implementation cost
Results from RILA Annual Leadership Exchange, September, 2004
Potential RFID Benefits for Retailers
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Increased supply chain visibility
Reduced on-hand inventory and less use of “safety stock”
Increased sales through reduced out of stocks
Reduced transportation cost and shipping volumes
More accurate forecasts and stock replenishment
Reduced shrink and theft in the supply chain
More efficient product recalls – keep product off the shelf
Potential Supply Chain Savings
Global
Supply
Chain Total
Annual
Spending
$3 Trillion
Total
Estimated
Annual Cost
Annual Loss
of Waste
due to Poor
Visibility
6-10%
$180-$300
Billion
All figures in U.S. Dollars and represent worldwide spending and losses
Carnegie Mellon, Stanford University, AMR Research
Potential RFID Benefits for Consumers
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Better in-stock - product on the shelf when you want it
Improved Product Selection
Product Freshness for Dated Goods
Easier Identification on Recalls
Product Authenticity – Curbs Counterfeit Merchandise
Potential for Easier Returns
Customer Satisfaction is Key to
Retail Success
• Customer acceptance and awareness of RFID/EPC is
a critical component to successful RFID
implementation.
• Considerable efforts in ongoing pilots to notify and
educate customers
• The retail and supplier communities were key to the
development and adoption of the EPCglobal
guidelines for consumer products including notice,
choice, customer education, and data security.
CUSTOMER
Customers vote with their feet every day
• Retailers are focused on enhancing the shopping
experience, they spend millions of dollars on making
their stores more inviting to the consumer.
• Retailers and product suppliers have no interest in
doing anything that will turn their customers away -it would cost them dearly.
• Customer acceptance is key to industry-wide
adoption.