Jan 25, 2016High-end fashion retailer Rebecca Minkoff opened its first RFID-enabled store in New York City's SoHo neighborhood in November 2014 (see Rebecca Minkoff Store Uses RFID to Provide an Immersive Experience). Since then, the retailer has brought radio frequency identification to two of its other stores, one in Los Angeles and the other in San Francisco. The company, known primarily for its chic handbags, reports that the use of RFID to provide higher levels of customer service has led to greater-than-expected apparel sales.
"Giving the customer a unique experience is the heart of our store visit and journey," Uri Minkoff, CEO of the clothing company he cofounded with his sister, Rebecca, said at a panel discussion at the National Retail Federation's Big Show, held last week in New York City. "RFID is the core piece of that."
Upon entering a Rebecca Minkoff store, a customer sees a wall of video screens with which she can interact. The shopper can pause the video images of models showing off Rebecca Minkoff clothing and accessories on the runway. She can use the screens to order a free cup of coffee or a glass of champagne, flip through an electronic catalog to view Rebecca Minkoff's designer styles in different settings and see what is available. When she makes a selections of items she'd like to try on, a store associate—Rebecca Minkoff calls its employees "stylists"—brings the items to the fitting room.
Each piece of merchandise at the three RFID-enabled stores is fitted with a passive ultrahigh-frequency (UHF) RFID tag provided by Avery Dennison Retail Branding and Information Solutions. An interactive mirror with an Impinj xPortal RFID reader and touchscreen behind it has been installed within each fitting room. The tags on the items are read—special paint prevents the RF signal from reaching beyond the fitting room—and items with the exact same size and color chosen are displayed on the mirror.
"The fitting room has come to life for the consumer as she walks in," Minkoff says. "She can change the lighting. We have four options, so she can see how the outfit will look in bright sunshine, for example. If she is looking at a dress for a cocktail party, she can see how she will look in it in more dim, evening light."
The customer can select a different color or size and tap a button on the screen to request that a stylist bring it to her or let her know if that item is unavailable. The shopper never needs to leave the fitting room.
In addition, the customer receives recommendations for matching items. "RFID is important for this because she [the shopper] sees the designer's recommendations of what she should wear with the specific items she chose to try on," Minkoff states. "This is a very personal communication that has not existed before in retail. It's almost like Rebecca is there providing a recommendation for each specific customer. RFID is the basis for that."
The system also provides the retailer with data regarding each customer's in-store behavior—something that was previously not easy to acquire. "We know what items went into the fitting room," Minkoff explains. "We know what items converted [into sales] from the fitting room. We know what items, when paired with another item, had conversion. We had a new item that went into the fitting room 60 times in one store in the course of a week and was bought only once. There were 20 requests for different sizes, which means we had a fit issue."
According to Minkoff, 30 percent of customers entering the fitting room now order additional items that they had not picked up during their initial walk through the store. He credits the system with increasing the store's revenue.
"We've seen substantially higher apparel sales—as a percentage of total sales—than we planned, primarily as a result of our ability to track product entering the fitting rooms and remove friction in our customers' ability to ask for additional sizes and colors," Minkoff says. "Similarly, the ability to cross-sell and make additional sizes and colors available to consumers has led to a significantly higher conversion rate—versus the industry average—for customers who enter our fitting rooms."
Rebecca Minkoff is considering using the RFID tags for inventory management and replenishment. What's more, the retailer is looking to install the RFID-enabled fitting-room system at its two other stores, located in Hong Kong and South Korea.
