Inventory accuracy has a direct impact on a company's sales and future growth. That's why retailers use modern technologies to accurately conduct their inventories and correctly record inventory levels. This also allows them to better serve their customers and optimize the shopping experience.

Radio-Frequency Identification (RFID) has become increasingly popular in the retail sector, as the versatile technology can both increase sales and eliminate merchandise loss - an experience that DENSO's retail customer is happy to share.

Compared to a barcode, RFID offers key advantages, especially for retailers: goods, containers or pallets can be individually tagged - and wirelessly, but with more data that can be captured. A direct line of sight to the RFID tags is not necessary. The goals of DENSO's retail customer were to increase overall inventory accuracy in stores and to see if that accuracy had a direct impact on sales.

These goals were met. More than 97 percent inventory accuracy and a five percent increase in sales were achieved through the use of RFID. But how accurate?

The retailer conducts annual inventories in all stores and also uses them to clean up inventory data. At the time, inventory accuracy was still in the high 90 percent range. However, after just six weeks, this value dropped, inaccuracies crept into the inventory, and this in turn affected subsequent deliveries to the stores. What the retailer needed was the ability to check inventory at least once a week. Now DENSO came into play - with RFID.

Instead of just doing a test run in a few stores, the retailer wanted more right away. Everything in the stores was equipped with RFID tags: from clothing to jewelry. A central team was also put together to analyze and test RFID data management.

For participating stores, products were sorted at the retailer's distribution center and then tagged and coded with RFID tags. As desired, this had a direct impact on inventory. Once a week, employees went to a selected store and conducted a full RFID inventory. To do this, they took a tour with their respective RFID handheld terminal, scanned everything and uploaded the data to the RFID cloud. Then other team members downloaded and reviewed the collected data.

Without DENSO and RFID, the retailer's inventory accuracy was only in the mid-70 percent range, with some stores well below that. Implementing RFID increased accuracy to 98 percent for all stores in just two weeks. Even better, it remained consistent week after week.

In addition to increasing accuracy, DENSO's customer wanted to know how RFID was impacting its sales. Therefore, the performance and data of the RFID-tagged products were analyzed. It was found that within six weeks before and after the test run, tagged products generated a positive sales variance of eight percent compared to untagged products. As a result of this performance, the overall store average exceeded the original target by three percent. In the future, DENSO's retail customer plans to implement RFID in all stores and use RFID in the supply chain even earlier. This will allow the retailer to boost direct sales and even track stolen products. In addition, DENSO's customer can become even more successful by taking innovative steps toward addressing omni-channel and online challenges. This retailer is ready to serve its customers directly and immediately - using RFID as a competitive advantage.