RFID in Japan

Mitsukoshi has been testing item-level RIFD at its flagship store in Nihonbashi, Tokyo. The pilot tests were done twice during the period between October 2004 and February 2005 in the sales floor of women's shoes on the 1st floor.

These tests seem to be fairly successful: they claim that item-level RFID reduced the time spent for serving each customer by 50%. from 12 minutes to 6 minutes. Also, the sales increased by 10% during the time when the pilot test was done. So, Mitsukoshi decided to actually deploy the service as early as May 2005.

Sales agents at shoe shops generally need to go back and forth between a sales floor and a stock room to check availability of same/similar shoes with different sizes, colors, etc. In the Mitsukoshi trial, RFID tags attached to shoes enable customers to check availability by just putting shoes on a device (or sales agents can use portable scanner devices to check availability without going back to a stock room.)
Actually, sales agents PDAs can show wholesalers inventory information as well.

So the sales was 10% up while this system was used? Why? Mr. Nishida of Mitsukoshi says that average time spent for serving each customer was reduced by 50% from 12 minutes to 6minutes and this would have contributed to the increased sales. He says, when items were sold, serving time was still 12 minutes, however, during that time sales agents could introduce sales items to customers three times, which is higher than when RFID was not used (1.7 - 1.8 times).

Also, he points out that sales agents often need to hold a few shows using both hands, which makes it harder for them to use barcode based systems than RFID based systems that doesn't require light-of-sight operation.

Also, item-level RFID substantially reduced the time for inventry clearlance. Using barcode, all boxes stack on a shelf may have same numbers -- so if some problem occurs during scanning, a worker has to resume exactly from where the problem occuered (s/he has to remember it). However, since a unique number is assigned to each box in case of RFID, it can at least automatically eliminate the error of reading the same box twice.

Also, analysing historical data about which shoes were scanned seems to have revealed some information useful for the company to decide how many of each type of shoes to order next time.

As part of this trial, the store's conventional paper-based inventry book was converted into a digital form. This increased productivity of sales agents in an interesting way. Since customers didn't believe that paper-based inventory book was accurate and up-to-date they often demanded sales agents to go check a stock room even though the inventry book indicates no availability. However, the store found that customers tend to trust numbers displayed on computer screen -- customers are less likely to demand sales agents to go and double check availability if it says no availability on computer screen.

via Nikkei Realtime Retail, April 7, in Japanese.

Posted by konomi at April 19, 2005 12:52 AM | TrackBack