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WWD CEO Summit: R. Shawn Neville

One of the nation’s leading purveyors of radio frequency identification technology (RFID) thinks it’s just getting comfortable in the apparel specialty store.

One of the nation’s leading purveyors of radio frequency identification technology, or RFID, thinks it’s just getting comfortable in its natural home — the apparel specialty store.

R. Shawn Neville, president of Avery Dennison’s retail branding and information solutions unit, noted that RFID technology has been around for more than 40 years but is just now beginning to become established in specialty stores after early adoption by large discounters and, more recently, by department stores such as Macy’s Inc., J.C. Penney Co. Inc. and, in the U.K., Marks & Spencer.

 “The other four-letter word that I think has been very confusing to the industry as it relates to its enablement is RFID,” Neville said. “It’s actually been around over 40 years in many different applications. And it’s been actually very confusing to most, especially in our industry, because it’s actually taken on so many different forms.

“Why is that? If you actually look at RFID, first of all, it was very expensive,” he said. “It still is relatively expensive but we do believe there’s a value in it. But its primary focus was at a case and item level in supply chains, a supply chain solution. For the reality is, it is to a degree, but it will never pay for itself because the entire benefit of RFID — not the entire benefit but at least 85 percent — is when that case is opened and impacts the store.

“And if we take it even a step further, the future of RFID is not necessarily to just make sure that we can see the inventory,” Neville continued. “It’s to make the lives of store associates and the lives of consumers much easier so they’re empowered to enjoy.”

While RFID has innate advantages over bar-code technology for high-volume users, such as its ability to scan nearly 200 items a second with 99 percent accuracy, its relatively high cost makes it a more comfortable fit for higher-margin products and the merchants who sell them, he said.

RFID offers ease of use that makes it a natural fit for both store associates and consumers in an increasingly digital world, he asserted. Burberry’s flagship on Regent Street in London, which opened in September, is equipped with an RFID system that activates videos showing the craftsmanship built into individual products being considered by shoppers. Germany’s Gerry Weber went chainwide with RFID about two years ago.

As with bar codes, introduced in the mid-20th century, acceptance has been slow. Neville told WWD that of more than 100 billion units of apparel produced globally every year — 40 billion of them for the U.S. and European Union — RFID is only being applied to between 1 billion and 1.5 billion. “The fastest application of RFID right now is in the apparel industry,” Neville said, “and it’s still less than 1 percent of global production. But a lot of people have dipped their toe in the water the last few years.”