Chico’s Finds RFID a Good Fit at 13 of Its Soma Intimates Stores

By Claire Swedberg

The technology enables the stores to track merchandise as it arrives and leaves, providing visibility into inventory levels and ensuring that customers can always find the sizes and styles they need.

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Women’s fashion retailer Chico’s FAS Inc. has completed a one-year pilot of radio frequency identification technology at 13 of its approximately 200 Soma Intimates stores, and is now planning to make those installations permanent—which may include integrating the technology with its point-of-sale (POS) system. The company is also reviewing how it might expand the solution’s use to other store locations.

According to Jamie Kress, Tyco’s director of sales and strategic accounts, the pilots consisted of an RFID solution provided by Tyco Retail Solutions for tracking garments at the item level when they were received from the distribution center, as they moved from the back room to the sales floor, during weekly inventory checks, at the point of sale (POS) and, finally, as they left through the front door. Tyco’s TrueVue software, residing on a dedicated server, manages the collected read data, identifies when inventory requires replenishment and monitors the movements of goods throughout the store.

RFID readers installed at exits can identify any unpurchased items that leave a Soma store.

Chico’s, founded in 2004, has four women’s clothing brands, including Soma Intimates, a chain of clothing boutiques focused on lingerie. The company’s first experience with RFID took place in 2010, when the retailer began attaching passive EPC Gen 2 ultrahigh-frequency (UHF) tags to product samples, in order to track those items as they were “checked out” by company employees and then returned. Those samples are ultimately sold to staff members at a company store located at Chico’s headquarters in Fort Meyers, Fla. Once the samples were being tagged, Kress says, the firm began working with Tyco in 2011 to track them within a store environment, trialing the technology and showcasing it to workers and executives. Items were tagged and a reader was installed between the back room and the sales floor, so that the company could manage the flow of merchandise to the sales area and ensure that samples were on display and available for purchase.

Following that project’s completion, the company deployed an RFID system at a single Soma store in Naples, Fla., that was selected due to its close proximity to Fort Meyers, as well as the supportive, experienced sales staff at that site. In 2013, it expanded the deployment to include 12 additional stores, appointing team captains to oversee the pilots and results within districts (groups of stores). Chico’s did not respond to requests for comment about the installation.

Soma Intimates faces unique challenges when it comes to tracking its inventory—its bras, panties and other merchandise vary widely among styles, sizes and colors, and each category and size must be available for customers at all times. Prior to the RFID system’s installation, the Soma stores conducted only a few inventory counts annually, in large part because of the time consumed by the task. As such, keeping each item in stock on the sales floor proved difficult for the sales staff.

Another time-consuming task was managing incoming inventory. When a box of goods arrived in the back room, employees had to cut open each box to visually identify what was inside, and thus decide whether some or all of the goods needed to be moved directly onto the sales floor.

Tyco’s Jamie Kress

With the RFID system in place, Chico’s reports, these tasks have become easier. Just before merchandise is shipped to one of the 13 participating stores, the garments are tagged with Avery Dennison AD-318 tags—which are typically affixed directly to each item’s price tag—at the company’s Atlanta distribution center. The RFID tags are printed and encoded on Avery Dennison 9855RFMP RFID printers. The TrueVue software records the unique ID number encoded to each tag, and indicates that the tagged item is being shipped to a particular store.

Once the goods arrive at that store, staff members use a handheld Motorola MC3190-Z RFID reader to capture the IDs of all tags within the box, enabling them to view, without opening the box, what has been delivered, and to create a record of all the items received.

The tags are read again via fixed Motorola FX7400 readers as individual items are moved to the sales floor. In addition, staff members use the handhelds to perform weekly inventory checks, and to read tags during daily sales-floor replenishment, by identifying where products are located in the back room (including those in boxes).

In addition, staff members utilize the handhelds in Geiger-counter mode to assist customers who may be searching for a specific item size or style.

At the point of sale, another fixed FX7400 reader is used to identify the item being purchased, and to update that product’s status as sold in the TrueVue software. With TrueVue, store personnel and company management can view inventory levels, and thereby identify when items need to be reordered or simply moved from the back room to the sales floor.

Finally, readers installed at store exits capture the tag IDs of goods leaving the premises. In most cases, the tags have already been interrogated at the point of sale, but if an item was not purchased, the system will identify that “shrinkage” and update the TrueVue software to indicate the exact merchandise that is now missing.

Tags are being attached to all merchandise for the 13 store locations, Kress says, with the exception of lotions and other beauty items. Each of the 13 stores is conducting full inventory counts on a weekly basis, thus ensuring an inventory accuracy of 90 to 95 percent, the stores reported.

Next year, Chico’s intends to integrate the TrueVue software with Soma’s own point-of-sale system. In that way, when the tag of an item being purchased is read at the sales counter, that action could update the POS system automatically. According to Kress, the retailer is presently evaluating the timing of rollouts slated to take place at additional Soma stores in 2015 and 2016.