Taking stock - quickly

Price-tag chips will let retailers scan their inventory. Target plans a major rollout.

The new tags "will make my life easier," said Bridget Coulter, at a Target in Philly. ( ELIZABETH ROBERTSON / Staff Photographer )

'What if a computer chip the size of a grain of sand could alert a store that it was out of stock of your blouse size, favorite color of towel, or toy for your kids?

By next year, all Target stores will be providing it to their customers - known as RFID, or radio-frequency identification technology, on item price tags. It will be one of the largest rollouts of its kind in the retail industry.

These tags enable stores to track individual items more quickly and know when they are selling well or are depleted. The technology has gone through fits and starts over the last decade - partly due to higher cost - and continues to evolve.

But its arrival at Target is welcome news to stay-at-home mom Bridget Coulter, 36, of Holland, Pa. A loyal customer, Coulter said she drove to at least five Target stores in the region last Christmas, looking for a Paw Patrol character - Skye, a female cockapoo character on the Nickelodeon channel - for her 4-year old son, Jake.

"It will make my life easier," she said, while pushing Jake and daughter Lilly, 1, in a cart at the Target in Northeast Philadelphia. "Whatever I'm looking for, I'll know if it is in stock."

Coincidentally, while Coulter visited the Bridesburg Target, a store clerk tried to find a Teenage Mutant Ninja Turtle toy for Jake, even checking the stock room, but couldn't find it.

Many department and specialty stores already show in-store availability of an item in a geographic area. RFID is intended to take that further by giving up-to-the-minute reports on items in stock. Its adoption accelerated in the last five years alongside omnichannel retailing, where a retailer needs a real-time view of inventory to match online and brick-and- mortar demand and boost sales.

According to the consulting firm Retail Information Systems, 20 of the top 30 U.S. apparel companies are doing something with RFID.

It has had mixed results.

Gap tested RFID in 2001 with its one store, one category - denim - and saw a 15 percent increase in sales.

Four years later, Walmart mandated that its top 100 vendors adopt RFID. In 2007 the retailer credited RFID technology with reducing out-of-stock by almost a third and cutting excess inventory. But by 2009, the effort was abandoned due to pushback from vendors, though Walmart has begun testing it again this year.

In 2011, Macy's Inc. became among the first retailers to implement RFID on a national scale.

The company announced in September that it was seeing "tangible results" at its Macy's and Bloomingdale's stores and that an additional rollout of RFID would continue this year.

In a sort of technological arms race in retail, Target is investing $1 billion in supply chain and technology infrastructure this year.

About a dozen stores will be among the first to get RFID later this year. All 1,795 Targets are to have it in 2016.

The technology allows retailers to rapidly scan hundreds of items a second, from yards away - versus bar codes that require laser scans to read individual product tags or labels.

The RFID rollout will include women's, children's, and baby apparel. Home decor, another category scheduled to get RFID tagging, was where customer Howard Jones, 49, of the Mayfair section, was looking for towels at the Northeast Philly Target.

"It's better for the store," said Jones, a service writer for a truck leasing company. "If a lot of an item is selling, they can keep more of it in stock, and less of the other stuff that's not selling."

"Despite a long period of testing hindered by the slow economy of 2008 and 2009, retail adoption of RFID is now a more concrete reality," said Bill Hardgrave, dean of Auburn University's Harbert College of Business and founder of its RFID lab.

Many people already interact with RFID technology every day, from E-ZPasses in automobiles to security badges at work. Although it took bar codes more than 20 years to reach critical mass in the retail market, Hardgrave predicts that RFID "is on target and we will see widespread use in the near future."

But RFID tags are unlikely to replace bar codes fully for several reasons, said Deborah L. Weinswig, executive director at Fung Business Intelligence Centre in New York.

Among them is cost: An active RFID tag costs 6 to 9 cents, compared with 1.5 cents each for a bar code. "Bar codes are not bought for individual units . . . and thus, with increased scale, are considerably less costly," Weinswig said.

RFID tags can also become difficult to scan when they're bent or distorted. And there's the fear of Big Brother: RFID can track a shopper's movement through the store, determine identity, and infer behavior. Tags also can be used to scan customers quickly as they leave the store and help prevent theft.

Still, whatever privacy may be sacrificed, Coulter said, she will make up for it in time and gas. "It will be great just to go to one store instead of going on a wild goose chase."