Interview: Gary Moskovciak on the RFID Business Case and the Limits of Cheaper Tags

Twenty years at SML is long enough to have watched RFID in apparel go from an argument that had to be won to an assumption nobody questions. Gary Moskovciak has had the commercial conversation at every stage of that, and he is clear that what tipped it was not cheaper tags. We put six questions to the company’s Chief Commercial Officer on what a retailer actually puts in a business case, which number convinces a board, what separates a watertight proposal from one that dies in committee, where programmes stall after they have been approved, and whether buyers are right to assume tag prices will keep falling. His answers are published in full, with only obvious typing errors corrected.

You have been at SML twenty years and seen RFID go from an argument to an assumption in apparel. When did the commercial conversation change, and what changed it? Was it a technology moment or a cost moment?

I do not believe there was one defining moment. It was the convergence of technology maturity, declining cost, and most importantly measurable business outcomes. During the early-mid 2010’s we spent considerable time proving the technology itself, from read performance and product integration to scalability.

The commercial conversation shifted late 2010’s and accelerated post COVID when major retailers demonstrated tangible improvements in inventory accuracy, product availability, and operational efficiency. What ultimately accelerated adoption was not cheaper tags or better technology. It was the realisation that inventory inaccuracy and poor visibility were costing retailers significantly more than implementing RFID.

As an example of one metric, BOPIS cancellation rates demonstrated enough uplift in revenue to offset any incremental cost of RFID. That is when the conversation shifted from “why should we invest in RFID” to “how quickly can we deploy it and capture the benefits?” RFID adoption became mainstream because its business value became undeniable.

Walk me through how the ROI conversation actually goes now. What does a retailer put in the business case, and which of those numbers turns out to be the one that convinces a board?

The business case usually starts with inventory accuracy, which item-level RFID can take up to 98% or higher, along with reduced shrinkage. Then it layers in the operational wins, such as fewer mis-shipment claims, improved upstream shipment compliance, labour efficiency across factories, distribution centres and stores, lower cancellation rates on buy-online-pick-up-in-store orders, reduced inventory and stronger brand protection.

But the number that convinces a board is rarely the accuracy percentage itself. It is how that accuracy translates into measurable financial outcomes in the P&L, which are, fewer stockouts, increases sales, improved inventory productivity, and labour hours given back to the business.

What is in a watertight RFID proposal that a weak one leaves out? I would like to be specific enough here that a reader could check their own paper against it before it goes to their board.

A watertight proposal covers the whole journey, not just the pilot. That means a comprehensive ROI analysis, technology selection with vetted partners, site assessment of the factors affecting RF performance in your own stores and distribution centres, product testing on your actual products under real world conditions, and a pilot demonstrating measurable business value and ROI. It should also include a plan for integrating with your existing enterprise systems, upstream sourcing, a scalable deployment plan, and ongoing training and support.

A weak proposal usually has a pilot and a cost number, and nothing between “it worked in one store” and “it will work everywhere”.

Ultimately, a successful RFID programme requires more than technical validation. It requires an ecosystem wide approach, with clearly defined responsibilities, measurable outcomes, and alignment across the entire value chain. Readers can check their own paper against each of those stages and see what is missing.

Where do RFID programmes most often stall after approval? My sense is that failure is rarely technical by that point, but you will have seen more of them than I have.

I would agree that most challenges today are no longer technical. They are organisational and operational. RFID deployments require alignment across sourcing, manufacturing, logistics, IT, and store operations. Programs often lose momentum when the ownership is fragmented or organisations underestimate the need for alignment across the supply chain.

Another challenge is change management, which affects every major initiative. RFID creates visibility, but visibility alone does not generate business value. Retailers must adapt their processes, establish accountability, and use the data to improve decision making and execution.

At SML, we have learned successful programs require coordinated execution across the entire value chain. The challenge is ensuring organisations are structured to capture the value RFID creates.

“RFID creates visibility, but visibility alone does not generate business value.”

Tag prices have fallen for years and buyers now expect that to continue indefinitely. As the person who owns pricing governance, is that expectation realistic, and what happens to deployment economics if it stops being true?

The industry has achieved extraordinary cost reductions through automation, manufacturing efficiencies, and of course economies of scale which all have been instrumental in accelerating adoption. However, expecting prices to decline indefinitely at historical rates is not realistic. RFID manufacturing remains capital intensive requiring continuous investment in technology, equipment, quality, and innovation.

More importantly, I believe the industry needs to evolve beyond measuring value primarily through the cost of the tag. If RFID is delivering measurable improvements within the enterprise then modest changes in tag pricing should not fundamentally alter the business case.

If a retail operations director reads this and has no RFID programme yet, what is the single most useful thing they should do in the next month?

My advice would be to establish the true cost of inventory inaccuracy before evaluating RFID. This includes everything from safety stock thresholds that remain unsold or discounted to cancellation rates on orders to customer complaints and everything in between.

Start by selecting a group of stores and product categories, then compare your inventory system against what’s physically available. Quantify the operational consequences, including lost sales hence customer disappointment, stock discrepancies, unnecessary replenishment, and simply labour cost spent searching for product and manual inventory counts. This provides a measurable baseline and helps identify where RFID can deliver great returns.

I would also encourage early engagement with sourcing and supply chain teams. Successful RFID programs are designed for scalability, ideally integrating tagging at the point of manufacturing rather than downstream. This action creates value throughout the entire supply chain as manufacturers can leverage the benefit of the RFID upstream enabling retailer efficiency and customer satisfaction downstream.

The operations director should approach RFID as an ecosystem solution, creating measurable value for every stakeholder across the supply chain.