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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.
By Claire Swedberg

Each store's stockroom has a relatively small footprint. To accommodate the use of RFID within an environment in which merchandise is densely packed in the back room and on the sales floor, the retailer had to perform some re-engineering. Every store had to change the way it folds and hangs merchandise, to ensure easier and more accurate RFID read rates.

During the pilot, the company discovered that at a store's point-of-sale terminals, products could be unintentionally placed over the Tyco IDX-9000 readers, thereby incorrectly causing those items to be removed from inventory. Therefore, lululemon integrated the POS software with the RFID system so that the TrueVue software could differentiate between items that had actually been purchased and those that had merely been placed there unintentionally.

Once the RFID system was taken live, Aitken reports, inventory accuracy increased to 98 percent—which he calls a significant improvement. "Now we know, with precision, what product is in each store," he states, "enabling us to confidently provide an omnichannel solution meeting the wants and needs of our customers."

The technology has not only proven to increase omnichannel sales, lululemon reports, but has also reduced labor hours at each store. Prior to this deployment, the company employed two staff members, communicating via walkie-talkies, to update inventory each morning before the store opened, and then assigned roving workers throughout the day to update product from the back whenever they noticed items were running low. Now, the stores can continuously restock the sales floor throughout the day. Prior to the RFID deployment, the average stock-out level for items located in the back room but not on the sales floor was more than 250. The level of stock-outs is now less than 50 items at any given time, with some stores reaching a goal of zero out-of-stocks regularly throughout the day.

This month, Aitken says, the company's mobile teams are updating the lululemon iPhone app to provide omnichannel functionality. With the updated version, when a guest shops on the app, the RFID database enables the app to display a nearby store at which the product is available in the exact quantity, size and color desired. The customer can then choose to order online, pick up the item at the nearest store or call to request that they be shipped out. RFID-enabled phone sales are credited to the store's daily sales goals.

"With unprecedented visibility into our inventory," Aitken explains, "we can now ensure a full assortment of our goods are on the selling floor and available for guests to pick up, try on and enjoy."

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