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Canadian Leather Retailer Pilots RFID for Replenishment Visibility

Danier Leather is testing a Truecount UHF Gen 2 system at three of its stores to track when goods are received on the sales floor, as well as when they are sold, and to automatically alert employees when an item needs to be replenished.
By Claire Swedberg
Nov 02, 2012Canadian luxury leather goods retailer Danier Leather is piloting a radio frequency identification system at three of its Toronto-area stores, intended to ensure that products are replenished on the sales floor as they are sold to customers, as well as reduce the number of labor hours related to counting inventory. Since installing Truecount's RFID solution at two stores this summer, and at the third site in September, Danier Leather believes it can reduce inventory count times from about 15 hours to less than one, according to Phil Cutter, the retailer's VP of information technology and chief technology officer. But his company's greatest priority, Cutter says, is to improve the rate and accuracy of replenishment on the sales floor. The company sells its own line of high-value leather goods, such as jackets, purses and briefcases. If the items on the sales floor are replenished from the back room in a timely fashion, he notes, that lack of replenishment could lead to a loss of sales.

Danier operates 90 stores, including outlets and mall sites, with the volume of sales varying at each location. Across all of its stores, the company already has a very low shrinkage rate, Cutter says, largely because it conducts regular inventory counts at each site. Some counts are carried out as often as once weekly, while others are performed once a month or twice annually. The process is time-consuming, however, and does not provide a view into how quickly sales-floor inventory is replenished from the back room. With the Truecount system, says Bryan Tatoff, Danier's senior VP, chief financial officer and secretary, "as soon as an item is sold, we receive a replenishment list," which is then displayed at the point of sale and on a back-room computer monitor.

Phil Cutter, Danier Leather's VP of information technology and chief technology officer
Prior to launching the pilot, Danier had sought an automated system that could provide greater visibility into which products were on the sales floor, as well as when they arrived there and when they were sold. The Truecount solution provides that data, thanks to an ultrahigh-frequency (UHF) EPC Gen 2 passive RFID tag attached to each product and read by a combination of handheld and fixed RFID interrogators.

Initially, the pilot was launched at stores in Mississauga and Toronto. Based on the preliminary success at those locations, the system was also installed in Burlington a month ago. Although the pilot was intended to conclude during fall 2012, the company chose to continue testing it throughout the busy seasons—namely, fall and winter. Once that is completed—in February 2013—the company plans to begin reviewing the resulting data in order to determine whether the technology has improved replenishment rates and thereby increased sales.

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