best practice for Best Buy

It seems that RFID is fast becoming best practice at Best Buy. Robert Willett, who is both CEO and CIO of Best Buy International, says that so far, RFID has boosted everything from the retailer's product forecasting to on-shelf availability (which has soared from the mid-80s to 93 percent).

In fact, Best Buy now reports that it has begun to move beyond case- and pallet-tagging to the tagging of individual items—DVDs, CDs and videogames. Willett told attendees at the Entertainment Supply Chain Academy's annual conference in June that Best Buy is already testing item-level tagging at its pilot store. "We are enabling our product shelves to become 'smart shelves,'" said Willett. "There is obviously a cost, but we believe that the reduction in customer disappoint per visit will more than offset any cost over time, and it will also help fight piracy."

To ensure cooperation from suppliers, Best Buy invited representatives from movie studios and suppliers to a twoday event last spring at which it communicated its RFID strategy. Willett reports that the company's RFID plans were well received. That should come as no surprise. Suppliers stand to benefit from item-level tagging too. Applying RFID tags to individual DVDs, CDs and videogames can boost sales by preventing stock-outs, which is particularly crucial in the days immediately following an item's launch. With DVDs, for example, up to 70 percent of sales are recorded in the first seven days after a film is released on DVD.

In the meantime, Best Buy plans to move forward with item-level tagging. "We have a further pilot this year," says Willett. "There are so many opportunities."