Gerry Weber Shows How Retailers Benefit From RFID

By Mark Roberti,

The winner of this year's RFID Journal Award for Best RFID Implementation is using the technology across its value chain.

Those who follow golf know that the Europeans are dominating the Grand Slam tournaments. And those keeping tabs on RFID know that European retailers are dominating the RFID Journal Awards. In 2009, Swiss retailer Charles Vögele Group walked away with RFID Journal's Best RFID Implementation award (see An RFID Fashion Statement). This year, German-based women's clothing designer and retailer Gerry Weber International took that honor (see this week's featured story, Gerry Weber's Pain-Free RFID Revolution).

Gerry Weber, like Charles Vögele, is employing radio frequency identification to track individual clothing items from the point of manufacture to the point of sale. The company is RFID-tracking approximately 20 percent of the 25 million items that it produces annually under its multiple brand names, including Gerry Weber, Gerry Weber Edition, G.W., Samoon and Taifun by Gerry Weber.

The retailer is working with some 240 outsourced manufacturing partners in China, Turkey and other countries, as well as its company-owned plant in Romania, a handful of third-party transport and warehouse logistics partners, and roughly 200 House of Gerry Weber stores throughout Germany.

Goods are tagged at the point of sale, with transponders provided by Avery Dennison RFID. The logistics providers that pick up the items in Asia have installed tunnel readers to identify what is being picked up, and that data is transmitted to Gerry Weber's supply chain management system, so that in the event of a problem, it can be addressed immediately. "If 500 items are missing, we can call the supplier and ask if there's a second shipment coming," says Christian von Grone, Gerry Weber's CIO, "or find out what is the matter with the delivery."

That means there is time to ensure that the 500 items arrive, and that the company can avoid lost sales due to items being out of stock. Gerry Weber also uses the RFID labels to better manage inventory, and to make sure that the proper items are shipped to retail stores—both its own and others that sell Gerry Weber-branded items. Since roughly 80 percent of the firm's clothing is sold in retail outlets other than its own, von Grone explains, this adds up to fewer returns or credit notes to customers due to missing or excess items. According to Gerry Weber International, these improvements represent almost 30 percent of the RFID project benefits that it receives.

Goods are checked in upon arriving at Gerry Weber-owned stores, in order to ensure that a particular store did not receive either too many or too few items. And instead of taking inventory once annually, Gerry Weber's stores now do so once per week. The resultant improvement in inventory accuracy has increased turnover, enabling Gerry Weber to sell a greater number of items at full price, rather than marking them down just to get them off the floor.

Some U.S. companies are starting to explore these benefits as well, and the Voluntary Interindustry Commerce Solutions Association's Item Level RFID Initiative has launched an aggressive campaign, both to quantify the benefits of RFID for retailers and apparel suppliers, and to promote these benefits in an effort to encourage industry-wide adoption of the technology (see Major Retailers, Industry Groups Launch Item-Level RFID Guidelines Initiative, Item Level RFID Initiative Focuses on Supplier Benefits and VICS Item-Level RFID Initiative Enters Phase II).

But many U.S. retailers are still sitting on the sidelines, waiting for larger companies to prove the technology's benefits. That doesn't make a whole lot of sense to me. It's sort of like American golfers playing it safe on every hole, waiting for European golfers to first prove that you can win the United States or British Open by playing aggressive golf.

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below. To read more of Mark's opinions, visit the RFID Journal Blog, the Editor's Note archive or RFID Connect.