Cloud-based UHF RFID application reduces inventory time by more than 90 percent!
The purchasing behavior of customers today sets complex demands. Customers want the Store-in-a-Pocket. This means: more online services. The basis is an inventory accuracy of almost 100 percent. The way to achieve this is via an RFID solution. All items of the America-Today private label – which account for around 90 percent of all goods sold – are tagged with RFID labels during production.
Charlotte den Heijer, Merchandise Planner & RFID team member, in an interview with RFID & Wirless IoT Global.
No Omnichannel Without RFID
In order to optimize the shopping experience for customers as much as possible, the Dutch fashion retailer wants to create omnichannel offers. These include ideas such as "Ship from Store" or "Click and Reserve". The necessary step in this direction is the generation of exact stocks in real time. With an inventory interval of two years, this objective was not possible. The company decided to install an RFID solution in all 70 stores in 2018. 90 percent of America-Today's own brand articles are now tagged during production. Employees in the warehouse's incoming goods department label untagged delivered goods retrospectively. Every product in the shop is tagged with RFID labels.
"Our target group is young, open and digital – this is also reflected in the complex purchasing behavior," reports Charlotte den Heijer. "We are currently testing various omnichannel offers based on RFID technology."
280 Days of Inventory Every Two Years
The company's own label 'America Today' accounts for 90 percent of the fashion articles sold. The remaining 10 percent come from well-known US fashion brands such as Levi's, Tommy Hilfiger, and Calvin Klein. Prior to the RFID integration, complete inventories were carried out in the 70 stores every two years. This took a total of 280 working days – four working days per store. Up to 560 employees were completely occupied with counting and documenting the inventory by hand throughout an entire day. The average inventory accuracy was 75 percent.
A further workload was the receipt of goods. One employee in each store spent around two hours a day collecting goods. Today, physical inventory takes place once a week. One employee captures over 15,000 articles within one hour. The stock accuracy increased to an average of 98 percent. Inbound goods entries are completed within five seconds.
Pilot in 3 Stores in 2018, Rollout to 70 Stores in 2019
In June 2018, the 3-month pilot phase began in cooperation with a Dutch integrator in three test branches. The pilot stores covered three different store types (very large sales area, small sales area, high theft rate). Although offers from other solution providers were invited in August 2018, it was quickly clear that the Dutch system integrator was the best partner for America Today, both technologically and cooperatively.
The results of the pilot already tipped the scales in November 2018 for the decision to roll out the system. Between December 2018 and January 2019, the switch to a source tagging process took place. At the end of 2019, the final rollout started in a total of 70 stores. The sales staff were trained within three weeks according to a trainer-to-trainer concept. Five employees were initially trained as RFID trainers and subsequently instructed the store managers to pass on the know-how to all other employees.
Enjoy Stocktaking with Leisure Bonus
The basic functionality of RFID technology for reducing inventory costs and increasing inventory accuracy has already been conclusively evaluated in the pilot stores. "The technological challenges, including the coordination of hardware and software, are only part of our solution," says Charlotte Den Heijer, looking back and adding: "It is equally important that our employees can work with the solution and that they see the technology as a support. We were able to achieve this with our training system, among other things".
Additionally, a bonus system was introduced: "If a store achieves at least 98 percent in a physical inventory, the inventory can be suspended the following week. The employees receive a leisure time bonus. This mini-competition among the stores additionally motivates colleagues to fully implement RFID technology".
One Setup for All 70 Stores
The same hardware and software setup is implemented in all 70 stores. All articles from the private label portfolio are labeled during production. The tagging of articles of other brands with RFID tags takes place in the main warehouse of America Today. According to Charlotte den Heijer, the share of tagged goods from suppliers such as Levi's is continuously increasing. If brand manufacturers code their RFID labels in the GS1 standard, these tags can be seamlessly integrated into America Today's RFID solution. Inventories and incoming goods are recorded using handheld readers connected to tablets or handhelds via Bluetooth.
Maximum Benefits with Minimum Effort
A system integrator from the Netherlands was selected as systems partner. The RFID solution provider supplies handhelds and cloud-based inventory management. As a solutions partner, the company is also jointly responsible for the concept, pilot applications and rollout support. Checkpoint Systems supplies all RFID labels. Background: America Today purchased price labels from Checkpoint even before the RFID rollout, so the transition to RFID-enabled labels was completed without additional effort. The handhelds communicate captured product data via Bluetooth to iPads and iPods from Apple.
Following Charlotte den Heijer, the investment for the required hardware per store was limited to a manageable amount, as the Apple devices were already available in the stores. A virtual shielding application is used to precisely separate the inventories in the front and back store areas. This is integrated in the cloud-based application. Physical shielding of the two areas, which had to be ensured by structural measures, is no longer necessary.
Challenges: Metal in Clothing and Stores
Seasonally, for instance at Christmas or during carnival season, clothing articles partly consist of metal-containing materials such as lurex. The metal reduces the detection range of handhelds. Furnishings containing metal have a similar influence on the detection distances. According to Charlotte den Heijer, in order to counteract these disruptive factors, firstly, the employees are informed and secondly, metalcontaining furniture in the stores is gradually replaced by metal-free furniture.
Solution Structure is Expandable
The purchasing behavior of customers today makes complex demands. Customers want the Store-in-a-Pocket. This means: more online services. This includes ideas such as "Ship from Store" or "Click and Reserve". The necessary step in this direction is the generation of exact stocks in real time. For America Today, inventory accuracy is the key to meeting the changing demands of customers for the best possible shopping experience.
When it comes to increasing sales and customer satisfaction, the company sees different approaches to meeting customer needs: Even before a customer enters a store, inventories can be checked online and specific items can be reserved in the selected store. If a particular item is not currently available in the store, it can be ordered immediately from another store to the customer's home. These omnichannel services are high on the agenda for America Today. With the UHF RFID solution that has now been rolled out, the inventories in the stores have become digital and almost 100 percent visible. This database is the starting point for omnichannel.
In 1989, three friends opened a fashion shop in Amsterdam's Sarphatistraat, offering fashion from American labels at the best possible price. The name of the company: 'America Today'. Over the years, the original concept has evolved. America Today still stands for fashion with an American flair, but the main focus today is on its own brand. Today, the company has stores in the Netherlands, Belgium, Luxembourg and now also in Germany.
Charlotte den Heijer
Charlotte den Heijer is the responsible merchandise planner and member of the RFID team at America Today. She started as a logistics coordinator and coordinated warehouse operations. She is now Merchandise Planner and is part of the project group that implemented RFID technology in all stores.