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Turkish Retailer Plans Big Item-Level RFID Expansion

LCWaikiki, one of Turkey's leading apparel retailer, has been using item-level RFID tracking in one of its stores for about three months and plans to install systems at 50 to 60 more locations within six months. The company credits the system for reducing inventory tracking time by 60 and 70 percent for certain processes.
Aug 11, 2008This article was originally published by RFID Update.

August 11, 2008—LCWaikiki, one of the largest apparel retailers in Turkey, is using RFID to track products at the item level at its flagship store in Istanbul and plans to equip 50 to 60 more locations with RFID systems in the next six months. LCWaikiki is using Gen2 passive UHF RFID tags that are combined with electronic article surveillance (EAS) tags for inventory management, checkout, automatic reordering and theft prevention.

LCWaikiki is using the combination RFID-EAS tags in stores where it already has EAS systems installed, but may use RFID-only tags for inventory and anti-theft operations at new store locations with no EAS infrastructure, Stephen Crocker of Alien Technology told RFID Update. LCWaikiki currently opens a new store approximately every 10 days and has more than 200 shops throughout Turkey, he said. Alien and its integration partner, STS Technology of Istanbul, are providing the RFID systems to LCWaikiki.

A stationary RFID reader records merchandise as it is brought from the back room to the selling floor. When goods are purchased, the RFID tag, not a bar code, is read at the point-of-sale (POS) station to record the transaction. The RFID read drives the POS system, deducts the item from the inventory system and automatically generates a replenishment order.

LCWaikiki now transfers merchandise from the back room to the floor 70 percent faster and takes stock in 60 percent less time, according to Alien's announcement.

"Inventory replenishment is a big issue, but this system automates the whole process," Crocker said. "It's not a very complicated setup. Any retailer in the world could do the same thing."

An unrelated study released last week concluded read performance is reliable enough to make RFID item-level tracking feasible for apparel and footwear retailers (see RFID Study Evaluates Item-Level Retail Performance).

RFID readers could also monitor goods to protect against shoplifting, according to Crocker, but LCWaikiki did not install readers for that purpose because it wanted to make use of its legacy EAS system. The retailer designed its own RFID-EAS combination tags, which are attached to merchandise in the store after new shipments arrive.

The system has been running for about three months at LCWaikiki's headquarters store in Istanbul and rollouts are underway at three more locations, according to Crocker. He said the chain plans to install RFID systems at 50 to 60 locations in the next six months and expects to eventually implement the technology at all its stores. LCWaikiki had turnover of approximately $848.4 million (719 Turkish Lira) in 2007 according to company figures. Revenue growth for the last three years has been 45 percent, 43 percent and 35 percent.

LCWaikiki is the second high-volume customer that Alien and STS Technology have teamed to serve in Turkey. The companies previously announced they provided an RFID system to track 25,000 totes for a garment manufacturer (see RFID Helps Manufacturer Sock Away 40% Productivity Gains).

The LCWaikiki rollout adds to the momentum behind item-level RFID use in the apparel industry. Earlier this year American Apparel announced plans to deploy systems in at least 17 stores (see American Apparel Going to Item-Level RFID in Stores), and Spanish children's apparel producer Bóboli began item-level tracking at a distribution center with an eye to introducing applications in its stores (see Ambitious RFID Pilot Launches With a Single Reader).
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