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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
RFID hangtags, made with RFID inlays supplied by Avery Dennison and LS Industrial Systems, are already being applied to American Apparel's products at the point of manufacture, Schulman explains. Once the goods are received at a store, all items are interrogated using the fixed reader at a receiving station, and that information is forwarded to the enterprise-wide Xterprise Clarity software residing on American Apparel's database. In that way, the store knows what was received, and when this occurred.

After being placed on the sales floor, the products pass a second fixed reader that captures each item's unique tag ID number and again updates the software accordingly. Every store is also furnished with two handheld readers, which employees can use either to perform an inventory check, or to locate a specific item within that store, via a Geiger counter functionality. When purchasing a product, a customer places that item on the sales counter, under which a desktop reader captures its tag ID and updates the inventory data in the Clarity software, indicating that it has been purchased.

In the future, Shulman says, American Apparel may opt to equip some stores with fixed doorway reader portals, to be used in conjunction with the existing electronic article surveillance (EAS) system to capture the tag IDs of any items that might be removed from those stores without being purchased. In that way, the retailer would know not only that something was being removed (thanks to the EAS system), but also which item (based on the RFID data).

Since the RFID system's installation at its existing 100 stores, Shulman reports, American Apparel has seen an increase in sales at those locations, owing to a reduction of out-of-stocks. When the solution is first installed, she says, it takes a store's staff and management several months to adjust to the new technology. "Once they're used to it and processes are stabilized, we see a sustainable sales lift," she states, though she declines to quantify that increase. In addition, she says, the in-stock percentage for those stores equipped with RFID is approximately 99 percent—in other words, 99 percent of all inventory is available for customers to purchase.

According to Shulman, American Apparel may also experiment with RFID technology in the fitting rooms of select stores, in order to better understand which products enter and leave those rooms, and how long they remain there.

Shulman will describe her company's deployment to date, as well as the return on investment that it has experienced with RFID, at RFID Journal LIVE! 2012, being held on Apr. 3-5, in Orlando, Fla. Shulman's presentation will take place on Apr. 4.

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