Feb 09, 2021Spanish fashion retailer Encuentro Moda is deploying a radio frequency identification solution across its 125 stores to meet omnichannel requirements and gain visibility into the stock availability at each store and throughout the supply chain. The rollout, which began last September, was completed within only four weeks, according to Nedap, the technology provider. The retailer has achieved stock accuracy of 98 percent at the first story in which the technology was deployed, and it is still measuring other potential gains, such as sales lifts due to merchandise availability and the ability to provide goods to online shoppers quickly.
Encuentro Moda says that it expects to increase sales, reduce the incidence of out-of-stocks and achieve overall margin improvements. With the UHF RFID technology-based solution provided by Nedap, the primary long-term objective is to achieve full supply chain visibility and merchandise visibility within all of the company's stores across Spain, according to Gonzalo de Lorenzo, Encuentro Moda's CEO. Encuentro Moda was founded in 1986 by Raúl Méndez on Spain's Gran Canary Island, and the firm now has 145 points of sale throughout Spain, including 125 stores, and operates under the women's wear fast-fashion brands Encuentro Moda and Öbu.
Gonzalo de Lorenzo
Encuentro Moda's headquarters are located in the Spanish city of Tenerife. The company says it was already meeting a growing demand for omnichannel services from digital shoppers when the COVID-19 pandemic began. "Encuentro Moda has made great efforts in the last year to adapt in an extraordinary way to the changes that the sector has been indicating for some years now," reports Sergio Gutiérrez, Nedap's RFID business-development manager. The focus has centered around omnichannel sales, he explains, adding, "The key objective for deploying RFID has been the need to have [item-level] stock visibility in real time that makes it possible to sell from any channel."
Prior to the solution's launch, de Lorenzo says, Encuentro Moda's management were aware of Nedap's !D Cloud RFID system being used by retailers to improve visibiity at stores and throughout supply chains. He had knowledge of RFID in general, he explains, as well as the benefits of using the technology, but notes, "This is the first time in our company that we have used it." In July 2020, Nedap began working with Encuentro Moda by integrating the !D Cloud software-as-a-service with the retailer's own enterprise resource planning (ERP) software.
Encuentro Moda's resulting closed-loop software platform includes the company's ERP and point-of-sale (POS) software, which communicate with the !D Cloud RFID inventory-management software. This connectivity, Gutiérrez explains, allows data transfer and provides accurate real-time business information. The company can track stock levels at each store and warehouse in real time, enabling online stores to reflect accurate stock levels at all sites. This visibility for online sales enables accurate and fast order fulfillment, the retailer explains, whether orders are placed as ship-from-store, click-and-collect (also called "buy online, pickup in store" [BOPIS]) and click-and-reserve.
Following software integration and initial deployment at a test store, the companies launched what they call "a cascade deployment model," in which they began to roll out the technology to the remainder of the stores. This was completed in October 2020, without requiring a proof-of-concept. RFID tag-read data is captured, stored and analyzed in Nedap's !D Cloud software, using its Electronic Product Code Information Services (EPCIS) repository to store all information at the item level.
First, all pieces of merchandise, including garments and accessories, are tagged at the point of manufacture. The tags are attached and encoded onsite, and that data is captured in the Nedap software. "Thanks to our collaboration with [Encuentro Moda's] source-tagging partner," Guiterrez says, "we know the status of the product from the moment it leaves the factory." Currently, he notes, the tagged products are not read again until they arrive at the store. "However, we are currently working to implement checking points to determine real-time positioning within the supply chain."
Each store employs Nedap's !D Hand handheld UHF RFID readers, which have a Bluetooth connection to Bluebird smartphones. When goods are received at a store, sales associates use the !D Hand device to read each tag ID, and that data is forwarded to the !D Cloud app on a smartphone, thereby updating the status of the goods as received. Once those products are then received at the store, the tags can subsequently be read as part of scheduled inventory counts at that location.
The smartphone forwards the collected read data to the !D Cloud software, thus automatically updating stock counts. The company can view which goods are available onsite at each store, as well as when they need to be replenished. If a specific item is required, a worker can put the handheld in Geiger counter mode and locate those goods within the store. All of the store's operational processes are now captured via RFID, de Lorenzo reports, so employees' workloads have been significantly reduced, thereby increasing the efficiency and accuracy of all personnel at those locations.
The company can now validate all goods received at each store within only a few seconds, Gutiérrez reports. This, he says, enables the fashion company to gain a view into the locations of all goods, whether they are in warehouses or stores, in order to control all internal movements between sub-locations that might occur, as well as sales. "The entire store process cycle is now supported by RFID," he states, "to guarantee data in real time."
Sergio Gutiérrez
The handheld readers are also employed for online order fulfillment, the company indicates. A store associate would first receive a push notification in !D Cloud, informing him or her of the need to prepare an online order. The employee would then access the system's Pick&Pack functionality and process the order fulfillment for BOPIS or for delivery to the customer's address. Next, the staff can simply read the tag of each product as it is being packed according to the customer order, and thus update the store's inventory count.
Despite the challenges of a rapid rollout during the pandemic, Gutierrez says, Nedap provided remote training solutions and coordinated deployments. The firm has not been required to be present onsite at every store during deployment, he notes—only at the first three locations. In partnership with Encuentro Moda, he states, "We have been able to deploy this project in the midst of a pandemic without the deadlines being affected." In fact, he reports, Nedap has adapted to last year's major setbacks. "COVID-19 has validated that our deployment model works even in the most adverse circumstances."
All Encuentro Moda stores are now using the system, de Lorenzo reports, adding, "In the next three months, we will address the implementation of new functionalities." The company next intends to extend the technology to its distribution centers. "It is essential to have this technology from the source in order to get the most out of it, but it shines especially in the stores where high accuracy levels are achieved. From our replenishment we gain in efficiency, and we expect to reduce sales losses due to stock-outs."
During this fashion season, Gutierrez says, all tagging has been performed at the source with RFID tags built into hangtag labels. Going forward, Encuentro Moda is proceeding to leverage RFID-enabled care labelling sewn into specific products and provided by certain suppliers. To date, the !D Cloud-based data has provided complete stock visibility, the companies report, allowing management to make effective decisions pertaining to merchandising and in-store product displays.
Encuentro Moda is currently using the most advanced version of !D Cloud, Gutierrez says, allowing the firm to monitor all in-store product movements in real time. "This has a very powerful impact on the improvement of in-store processes," he says, but also on the decision-making of area managers looking to improve processes and replenishments in order to have a properly stocked store.
