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American Apparel Adopting RFID at Every Store

After several years of trialing item-level EPC Gen 2 passive tags and readers at select locations, the clothing company is now installing the technology at all of its retail operations worldwide.
By Claire Swedberg
Feb 08, 2012Global clothing retailer and manufacturer American Apparel reports that it intends to equip all of its 280 stores with radio frequency identification technology, following a deployment of RFID readers and tags last year at 100 locations (see American Apparel Adding 50 More Stores in Aggressive RFID Rollout). The system—employing an ultrahigh-frequency (UHF) EPC Gen 2 passive RFID tag to track every item as it enters the store, is moved to the sales floor and then proceeds to the point of sale (POS)—has proven to increase inventory accuracy and reduce the incidence of shrinkage due to employee theft or error, says Stacey Shulman, American Apparel's VP of technology (see RFID Delivers Unexpected Benefits at American Apparel).

Now, the company is deploying the RFID solution at the approximately 180 American Apparel stores currently lacking the technology, as well as at every new store that it opens in the United States, Canada, Mexico, Europe, Asia, South America and Australia. By the end of this month, Shulman says, the retailer will already have equipped an additional 30 stores, with the goal of having them all fully RFID-enabled by the end of this year.

Stacey Shulman, American Apparel's VP of technology
According to Shulman, sales have increased at those stores already using RFID. What's more, she says, internal shrinkage has dropped by up to 75 percent at some RFID-enabled locations, and by an average of 55 percent overall. Shrinkage results from employee theft, as well as the loss of items due to human error, such as mistakes made during receiving—for example, goods being received but not recorded, or being moved to the sales floor without being entered into the system, or not being placed on the sales floor when intended, all of which can result in a loss of sales, or require the replenishment of those products. The RFID system, she notes, provides visibility that reduces that risk.

The retailer is employing Xterprise Clarity Advanced Retail System (ARS) software at each store, thereby enabling the verification of shipments, receiving and transfers from one location to another, the counting of inventory within a particular store, the ability to search for specific tagged items using handheld readers, the creation of fulfillment lists, and integrated POS functionality.

Each installation includes a fixed RFID reader within the receiving area, and a second unit to identify items being carried to the sales floor. A third reader is installed at the point of sale, in order to interrogate the tag of every items being purchased. In some cases, however, American Apparel's locations are concession stores located, for example, within a department store. A point-of-sale reader is not required in such cases, Shulman says, since the POS process is managed by the department store, and a single fixed interrogator installed within the back room is used for receiving and restocking.

For the most part, American Apparel is utilizing Nordic ID and Motorola Solutions handheld readers, as well as fixed interrogators provided by Motorola and Alien Technology.

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