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01/21/2016

Macy’s picks RFID to support omnichannel shopping

Count Macy’s among the retailers who realize a seamless customer experience starts in the back end.



Macy’s is supporting a new omnichannel order fulfillment program called “Pick to the Last Unit” (P2LU) with Tyco’s TrueVUE RFID inventory visibility platform,



Macy’s omnichannel strategy is to allow customers to shop anywhere, anytime, and anyhow they choose. The retailer realized that brick-and-mortar stores could fulfill single unit orders, essentially functioning as “warehouses” to utilize the full assortment of owned inventory. With item-level RFID, Macy’s has supported omnichannel operations and been able to reduce $1 billion of inventory from its stores.



Furthering that effort, Macy’s has launched its P2LU omnichannel fulfillment program. P2LU attempts to ensure that the last unit of an item in any store is made available for sale and easily located for order fulfillment.



Using Tyco’s RFID inventory solution, Macy’s conducted a P2LU pilot project with women’s dresses which delivered increased store fulfillment sales and reduced markdowns. The retailer is also reducing inventory costs by lowering interim inventory requirements by one-third.



“About 15% to 20% of inventory is accounted for by the last unit in the store,” said Peter Longo, president of logistics and operations at Macy’s. “It’s a massive amount of budget, either marked down or not sold, and it is curable through RFID.”

There are many ways to provide the real-time, seamless order fulfillment and inventory management needed to deliver a satisfying front-end omnichannel experience. The real lesson from Macy’s isn’t the specifics of how they aligned their back end, but that they made sure to do it.