Early work on paybacks for high volume goods

Most trials of item level tagging of very high volume goods in the West are of a preliminary nature. Many do not even seek to establish economics: they are simply experiments to look at feasibility and potential benefits. Most attention has been on DVDs, videos, razor blades, cosmetics, pharmaceuticals and apparel. The majority of items tested are middle and high value and there is some consensus in Japan, Europe and the US that apparel is particularly promising because fashion items must be discounted or replaced in a timely fashion.

Stronger market drivers for certain items A theoretical study by McKinsey showed that the benefits in cost saving and sales increase will be much the same for high and low end apparel but others disagree. IBM, Accenture, Forrester, the MIT Auto-ID Center and other worthies have done their own theoretical studies of paybacks and there is some consensus that one cent tags and a suitably low cost for systems and software will give satisfactory paybacks of under two years, there are wide variations in the nature of those paybacks because very few measurements have been made. However, most would agree that CPG suppliers, postal service providers and the military will see cost reduction and better service and retailers will see cost reduction and significant increase in sales. DHL Belgium, Metro Germany, LITI Japan and many others have shown cost reduction in trials. The Gap US, Goldwin Sportswear Italy, Tesco UK and many others have demonstrated 1-4% increase in sales from reduced stockouts

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