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German Clothing Company s.Oliver Puts RFID to the Test

The retailer recently completed a trial involving the tagging of 12,000 items, to determine if the technology can provide an adequate ROI by preventing out-of-stocks.
By Rhea Wessel
Nov 19, 2010After testing the use of radio frequency identification to reduce the incidence of out-of-stocks at several of its stores, German clothing firm s.Oliver Bernd Freier is now pondering the project's results, and is trying to ascertain whether to adopt the technology permanently.

The company, which reports annual sales of more than €1 billion ($1.4 billion) and employs 6,500 staff members worldwide, sells clothing and accessories for men, women and children, with a focus on young fashion. The company's business is 24 percent retail, with the remainder comprising wholesale and franchise operations. In the stores that it operates, s.Oliver wants to make sure that certain items are always in stock. It surveyed its customers, and 17 percent indicated they would not return to a store if unable to find the items they were looking for.

Florian Oechsner, s.Oliver's head of commercial international retail
The company ran its proof-of-concept test from June to September 2010, in order to gain experience with RFID, and to find out if the technology could be used to increase sales by improving logistics and making sure its stores are adequately supplied with what it calls never-out-of-stock (NOS) merchandise.

"We learned that the technology is reliable and ready to implement," Florian Oechsner, the company's head of commercial international retail, told attendees at RFID Journal LIVE! Europe 2010, held in Darmstadt, Germany, in early November. "Our staff was able to get comfortable with using it." The system detected 3,500 tags per hour, Oechsner said, and read rates were close to 100 percent. During the test, none of s.Oliver's customers said they were worried about privacy breaches with RFID; employees also reacted positively, saying the technology helped them keep the store floor stocked with NOS items by making it easier to conduct inventory.

Next month, s.Oliver's board will take a vote next month regarding whether to proceed with the RFID project, by calculating a business case for the company, and will then deliberate about that question at a later date.

On the ceiling above the front entrance of an s.Oliver store in the Stuttgart area, the company installed an RFID reader antenna from Logokett, as well as an interrogator from Deister Electronic. It also installed the same hardware between the store floor and the storage room in the back of the store. These devices were used to interrogate tags on select items that passed by. At two other stores—a second s.Oliver location, and one of the company's Comma stores in the Stuttgart area—the test was conducted using RFID handheld readers from Nordic ID.

At its distribution centers in Rottendorf (near Wuerzburg) and in Munchberg (near Bamberg), s.Oliver utilized an Avery Dennison RFID printer to encode unique ID numbers to EPC Gen 2 RFID labels, which it then attached to 12,000 items for the three stores. Before the tagged products were sent to the stores, each tag was interrogated by a reader installed beneath a table in the shipping area. The receiving store was notified electronically that the shipment had been dispatched, and a DC employee printed out a packing list and inserted it into the shipping box.

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