RFID ROI Estimator

Is an investment in RFID tags or labels the right fit for your organization? RFID is well-positioned to provide you with better visibility into your inventory management and loss prevention strategies, but the amount of retail theft you experience, along with your current inventory accuracy, counting frequency, and labor costs determine whether investing in solutions like RFID tags makes financial sense. Our ROI Estimator makes it easy for you to decide and build a grounded business case.

RFID delivers different results depending on your retail operation. Retailers cycling through hundreds of SKUs weekly will see a different ROI than specialty stores with slower turn and higher margins. The Sensormatic Solutions RFID ROI Estimator calculates those returns based on your actual data. Here’s how to use it:

Enter your current inventory practices and loss rates
Answer questions about your scenario, like store count, revenue, and current inventory counting processes
Review and adjust the model’s assumptions, like tag costs or expected performance gains

Based on that information, the tool will show potential improvements in accuracy, shrink reduction, and labor efficiency. The Sensormatic Solutions RFID ROI Estimator is intended to provide general guidance only. Based on the data you provide, the Estimator helps assess how investing in RFID may impact your bottom line. Some sample presets have been selected to help guide you in this process, but you may change these values based upon your own assumptions.

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

Percent of Revenue from Replenished Items like Basics (%)

ℹ

Average Unit Retail (AUR) Price (for items to be tagged) per Year with RFID Tags ($)

ℹ

Average Labor Cost/hr for Store Associates ($)

ℹ

Annual Inventory Turns (for Items to be Tagged)

ℹ

Deployment Timeframe (Number of Quarters)

ℹ

2. Operational Metrics Improvements with RFID

The improvements with RFID shown below are calculated based on our research, your inputs, and industry averages. You may adjust them to fit your unique 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 (Percent of Revenue) (%)

ℹ

Number of Times Store Inventory is Counted Annually

ℹ

							ℹ

							1,000

Labor Hours for Scanning Items during Inventory 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 & Cost Inputs 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

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

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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