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RFID Adoption by Apparel Retailers Gains Momentum
American Apparel, in the United States, as well as Kaufauf, NP Collection and other European companies, are proving that the technology's benefits are just too big to be ignored.
Finland's NP Collection deployed RFID at its boutique stores, and found that the technology reduced the time spent receiving goods at the store by 75 percent (see Finnish Fashion Designer Begins Item-Level Tagging). Since the German department store Karstadt deployed RFID, it determined that the time required to receive goods into inventory at the store declined by 85 percent (see RFID Readies for RFID). In both cases, inventory accuracy improved.
The University of Arkansas has studied the inventory accuracy of apparel stores in the United States, and has found that it is correct only 65 percent of the time. That means retailers are losing sales because customers cannot find goods on the shelf. Often, an item is in the back of the store, and not yet replenished.
With RFID, inventory accuracy on the sales floor can be increased to 98 percent by using handheld interrogators or fixed shelf readers. At Karstadt, the time required to take inventory on the floor fell, with RFID, from 1 hour and 20 minutes to 20 minutes. This enables employees to replenish missing items, and move those that are in the wrong location. From what I hear, this improvement in inventory accuracy can lead to a 5 percent increase in sales, or more.
American Apparel has been a leader in the United States in using RFID to improve on-shelf availability. The company recently expanded its RFID rollout (see American Apparel Makes a Bold Fashion Statement With RFID and American Apparel Expands RFID to Additional Stores). Zander Livingston, who leads American Apparel's RFID efforts, will discuss the deployment at RFID Journal LIVE! 2009, being held on Apr. 27-29, in Orlando, Fla.
Markdowns are another headache for retailers. Locating items that are not selling, and then lowering their price, is time- and labor-intensive. It previously took Karstadt employees four days over a two-week period during the change of seasons to markdown goods that it wanted to sell, in order to make way for the new season's items. With RFID, workers were able to locate the items and re-price them in only two hours.
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