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RFID Brings Lululemon's Inventory Accuracy to 98 Percent
The yoga and sports apparel retailer has increased its e-commerce sales by tracking the locations of millions of goods as they move throughout its stores.
Apr 18, 2016—
Global athletic apparel company lululemon reports that it has boosted its in-store revenue by deploying a radio frequency identification system at all of its stores to track its products' movements as they arrive at stores, are placed on display on the sales floor and are sold. The system has increased the company's inventory accuracy to 98 percent, says Jonathan Aitken, lululemon's RFID program director, which is one reason that the company's revenue is up, since its stores know what goods are available in the back room to be restocked on the sales floor and purchased. The company's ability to access RFID-based inventory data and choose to sell goods online or in store accounted for 8 percent of e-commerce revenue for the quarter, said Stuart Haselden, lululemon's CFO, during the firm's third-quarter investor call in December 2015.
Aitken will describe the project for the deployment in detail during a keynote at RFID Journal LIVE! 2016, to be held next month in Orlando, Fla. Aitken's speech will take place on May 3 at 5 pm.Tyco Retail Solutions' TrueVUE Enterprise Software and RFID Sensormatic readers, Avery Dennison RFID printers and tags, Technology Solutions (UK) Ltd. (TSL) handheld RFID readers and Zebra Technologies (Motorola Solutions) RFID reader antennas in the back room and RFID handhelds at the point of sale (POS).
To date, Lululemon has already tagged 3.5 million items at its three distribution centers, as well as at a third-party warehouse. Its suppliers tag another 6.7 million units annually with tags provided by Avery Dennison.
The RFID system was first launched as a pilot at two stores in 2013, where the company studied the technology's effectiveness for 11 months. Based on the pilot's early success, the project was expanded to 12 locations in 2014. Beginning in April 2015, lululemon rapidly rolled out its RFID-enabled inventory system at all North American and Hong Kong stores during a period of just six months, finishing in the third quarter of last year. RFID is now standard at all new store openings in North America.
"From the time that lululemon decided to move forward, they were live in 300 stores in nine months," says Doug Wilson, an account executive at Tyco Retail Solutions. "This is an incredibly fast-paced business, so one challenge is simply keeping up with customer service and sales-floor replenishment. The store personnel move very quickly throughout the day."
Each lululemon store is unique. Therefore, the implementation, especially regarding RFID shielding, was slightly different for every store. Some locations were painted with RF-blocking paint, Aitken says, while others received RFID-shielding ceiling tiles, but most ended up with a back room that "looked a little like the inside of the International Space Station."
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