RFID ROI Estimator

An investment in Radio Frequency Identification (RFID) technology solutions can provide retailers with better visibility into their stock management and loss prevention strategies. However, implementing this technology requires time and resources. Use the ROI estimator below to determine whether an investment into RFID tags/labels is the right choice for your organisation.

The Sensormatic Solutions RFID ROI Estimator is intended to provide general guidance only. The Estimator is a guide to help you estimate the return from an RFID investment with Sensormatic Solutions. Based on the data you provide, the Estimator helps to assess how investing in RFID may impact your bottom line. Some sample presets have been selected to help guide you in this process; you may change these values based on your own assumptions.

Start by answering a few questions about your scenario. You can then review (and revise if needed) the assumptions made by the model, such as the number of times you count stock each year.

1. Enter scenario characteristics

Enter or update the following numbers only for those stores and categories for which you want to calculate your ROI from using RFID:

Please choose your currency

Number of items to be sold per year with RFID tags

ℹ

Revenue percentage from replenished items such as basics (%)

ℹ

Average Unit Retail (AUR) price (for items to be tagged) per year with RFID tags ($)

ℹ

Average labour cost/hour for store assistants ($)

ℹ

Annual stock turns (for items to be tagged)

ℹ

Deployment time frame (number of quarters)

ℹ

2. Operational metrics improvements with RFID

The improvements with RFID shown below are calculated based on our research, your input and industry averages. You may adjust them to fit your individual circumstance. Once entered, proceed to Step 3 max budget and cost inputs.

Current Performance

Estimated Performance with RFID

Estimated Delta Change

Store-SKU inventory accuracy (for items to be tagged) (%)

ℹ

							ℹ

							1,000

Current markdown percentage (for items to be tagged) (%)

ℹ

Blended gross margin percentage (for items to be tagged)

ℹ

Current shrink (revenue percentage)

ℹ

Number of times store inventory is counted annually

ℹ

							ℹ

							1,000

Labour hours for scanning items during stock counting (hours)

ℹ

Annual revenue from all items in this scenario ($K/Yr)

ℹ

24 K/Yr

ℹ

							→ $1 K/Yr 
							Revenue uplift due to elimination of out-of-stocks
						

							→$1 K/Yr 
							Revenue uplift due to markdown avoidance
						

3. Max budget and cost input for:

Enter or update your minimum acceptable IRR (hurdle rate) and cost input for your scenario.

Hurdle rate or minimum acceptable IRR (%)

ℹ

Investment time horizon

ℹ

Discount rate (for NPV calculation) (%)

ℹ

Maximum initial deployment budget ($)

ℹ

Annual ongoing budget ($)

ℹ

									
									Deployment budgets
								
									Maximum initial deployment budget ($)
								
									$1K
								
									Annual ongoing budget ($)
								
									$1K
								
									ROI estimates
								
									Return on Investment (ROI)
								
									ℹ

									90%
								
									Net Present Value (NPV)
								
									ℹ

									$4K
								
									Payback period
								
									ℹ

									3 years
								
									Initial cash investment
								
									ℹ

									3 years
								
									Cumulative cash flow low point:
								
									ℹ

									$5K

Cash Flow in K$

Cumulative CashFlow

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20

Quarters from Start of Rollout

Need More Information on RFID?

For details about our RFID products and solutions —or to schedule a consultation with a Sensormatic RFID professional—please complete the form below. We're here to assist you!

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