The discount sales chapter is deploying RFID across its 27 stores for fast shopper sales transactions, as well as to track shrinkage, enable inventory counts and supply management.
Feb 27, 2024Until recently, weekend shoppers at Goodwill New Jersey stores have needed patience.
The point of sale lines snaked along the wall from the front to the back of the store. And in those lines, many shopping carts were full of dozens or even hundreds of items that could vary from jewelry, tools and household items to clothing and ceramics.
Once they got to the sales counter, staff members had to find and scan each barcode, one at a time.
As a result, some shoppers would abandon their filled carts and leave the store empty handed, meaning a sale was lost and employees had to put the goods back in their place on store shelves.
For Goodwill New Jersey, the problem required a technology-based solution. Over the past several years the company has deployed an ambitious RFID-based system to track its 40,000- to 60,000-item inventory in each store, enabling more automated point of sale transactions that cut queuing times for customers and reduce labor at the storefront.
A Goodwill Fix
The technology aids with inventory management, provides visibility into shrinkage and digitizes the consumption of store supplies. The deployment—going live in phases across the company stores—consists of UHF RFID readers at the sales counters, an enclosed and shielded tag reading unit for shopping carts.
In some cases, there are antennas at the door exit, as well as handheld readers for inventory capture by store workers, said Briley James Yetter, Goodwill New Jersey’s technology director.
The solution was provided by RES RFID including development, hardware, software and RFID labels. MasterTel USA was consultant in the project.
The Unique Challenge of Resale Retail
Goodwill has 165 different chapters across the United States, but the New Jersey chapter is the first to adopt RFID technology. Within the chapter, each store has many thousands of items donated or shipped from the warehouse, that defy standard SKU management.
“We're not pulling 20 SKUs of this 50 SKUs of that,” when putting goods on the sales floor," Yetter said. Because of the wide variety of goods, “things aren't always going to go in the same place in organized shelving … anything that's on our store floor is whatever was donated that day or came from our warehouse. It’s a hodgepodge of just about every type of item, brand, SKU and price.”
Facing all these challenges, the New Jersey chapter—with 27 area stores—became a technology pioneer in several ways. The chapter’s RFID use extends beyond the more typical inventory management employed by most retailers, said Yetter.
Paul Williams, Vice President Of Retail Operations,Goodwill Industries of Southern New Jersey and Philadelphia is appearing at RFIDJournal Live 2024 on April 11. Williams will lead a talk titled Goodwill Revolutionizes Retail Store Operations With RFID, discussing how the organization began deploying RFID in 2022 and is continuing implementation across the network of stores. Through RFID, it has been able to enhance the customer experience, while improving inventory management, reducing labor costs, and enabling better loss control.
Tackling Point of Sale First
First and foremost, Goodwill New Jersey CEO Mark Boyd wanted to bring RFID technology into stores to speed up the checkout times at the registers.
“We were looking for ways to alleviate that bottleneck,” Yetter said.
With RFID readers built into each checkout station (typically three of four at each store), associates can swipe handfuls of goods over the reader and then place the products in bags or directly back into a cart. The sales itemization and total cost is displayed for the customer, and they provide their payment, all done in a matter of seconds.
Thus far the results indicate that RFID purchasing has a significant impact on time, the company reported. When testing and comparing manual checkout against RFID systems, the store found annual savings of 10,406 hours of checkout time saved, based on about two million transactions.
Cart Tunnel Readers
Goodwill New Jersey has been testing what it calls cart tunnels to assist in the weekly “pull process” where a sales associate could push a cart full of pulled products into the reading enclosure, then press a button to start the scanning.
In about 10 seconds they remove the cart from the tunnel and all items are removed from the point of sale inventory. The same process can be used for product transfers (such as inventory moving from warehouse to store, or store to store).
Additionally, the company is testing a self-checkout version in which an RFID reader is built into a self-service kiosk.
“Instead of having to pull everything out and scan it one by one, they'll be able to take their blue plastic shopping basket and drop it into the bin full of items -- or take handfuls of items and drop them into the bin -- and it will rapidly scan everything,” Yetter said.
The shopper views the itemized result including total cost, makes their payments and grabs their receipt.
Pilot Program
The Goodwill group is also working with Fujitsu on use of a walkthrough RFID reader tunnel that will consist of two shoulder height antennas between which shoppers would walk as they leave the store.
At the end of the tunnel a screen would display a list of purchases and the user would then complete their payment.
To enable the integration of RFID into the sales process, Goodwill New Jersey is working with a new point of sale software—this new partner has been able to develop their software and the features within the software to fully utilize the value and the strengths that RFID has, Yetter said, although the transition did delay the technology roll-out.
Widely Varied Inventory
Managing sales is just part of the goal for Goodwill New Jersey now that the technology is in place. Another goal is to begin gaining an understanding of what leaves the store, especially items that weren’t purchased.
“We think we're going to see most of the ROI [return on investment] with RFID with the ability to measure shrinkage,” said Yetter.
Until recently, the Goodwill stores had limited understanding of what was being removed from the store and the cost of that loss. So the company has installed RFID panels at the door in several stores that read all of the RFID labels in the possession of a customer leaving the site.
Items marked as unsold are identified by the solution software. Goodwill New Jersey receives daily, weekly and monthly reports indicating everything that's passing out the store and related trends.
The data has found that the stores suffer an average loss of about 8 to 10 percent of their inventory through theft. That equates to about $5 million lost each year company-wide.
As a result, Yetter said, “We've already started taking that data and applying action to it…We're looking at putting additional loss prevention resources at the store.” That could include the alarms and lights as a deterrent, as well as additional officers.
Inventory Management on the Salesfloor
Goodwill New Jersey is using RFID handheld readers on a weekly basis to capture inventory counts, and identify specific items that have been on the floor for an extended period (such as 30 days or more). Those items can be identified and removed, sent to an outlet store where they are discounted further, or eventually sent overseas to other markets and sold by weight.
Prior to using RFID, Yetter said, “If you send one person out onto the store to pull every single item that's passed a certain date it's going to take them days to accomplish.” With the RFID reader, those items can be identified and removed in a matter of hours.
With the regular inventory counting information, the stores have a clear view of what is still available for sale at any given week.
“We're able to take what was barcoded in the back, compared to what was sold at the registers and then compare it to the inventory count. That deficit is our shrink—there's our loss,” Yetter said.
In fact, that data captured at the doors found that, overall, the stores were losing up to 10 percent of their product.
BOPIS Sales with Online Purchasing
Going forward. the stores are testing a new feature around Buy Online Pick up In Store (BOPIS) models.
If a customer buys a product online, the staff can now use the RFID handheld reader to search for that product, and automatically extract that product from the inventory. They then prepare it for the customer’s pickup.
At that point they can use a cart tunnel reader in the backroom to read all tags of items removed, and thereby automatically remove those goods from the inventory.
Warehouse Management
Goodwill New Jersey is using RFID technology to better manage the distribution of assets to stores from a central warehouse. Goods such as paper towels, rubber bands, tape and gloves are shipped to stores when ordered to be used by store staff, but there was little visibility into the process.
“It was all done on paper,” Yetter said, and in many cases that led to over shipping of goods, such as six months worth of toilet paper being shipped to a store that requested it every two weeks.
The use of RFID, by tagging boxes of these goods, and reading the tags as they move between the warehouse and the store, and are then consumed, helps reduce waste.
“If something goes missing or if there's loss or theft or waste we can quickly pinpoint exactly where in the process or where in the chain the breakdown was,” said Yetter.
He speculated that the inventory management system for goods delivered from the warehouses will “help us save somewhere between a hundred and $200,000 a year.”
Not the Typical Retailer
MasterTel has worked with Goodwill NJ for over 10 years providing their low voltage cabling, telephony services and other cloud connectivity at 50 locations including stores and donation centers, said Chris Koutrotsios at MasterTel USA’s CEO and president.
Koutrotsios pointed out that “they're not a traditional retailer.” In fact, MasterTel found many RFID technology suppliers were leery of what was a challenging use case for a unique customer. MasterTel found RES RFID was specifically focused on solving such challenges.
Photo courtesy of MasterTel
They innovated the solution and implemented the first test sites in 2022 in stores located in Maple Shade and Audubon, N.J.
“After we had them running for a few months then we started the rollout for all the locations,” said Koutrotsios.
Koutrotsios said the tag readers thus far are highly successful at reading tags on the wide variety of merchandise. “We’re able to get read accuracy in terms of 99 percent plus.”
MasterTel is providing AI video analytics that provide additional data related to shrinkage or activities in the store. That feed can then be matched to RFID data about sales, or unexpected removal of products from the store to help mitigate loss.
Key Challenges Overcome
For RES, which provides RFID solutions for retailers, there were some key differences between Goodwill NJ and some “standard” retailers.
At Goodwill NJ, “Every item is a unique SKU. So at a given time they could have over 60,000 SKUs per store,” said Neco Can, RES’ president and CEO. Since every item is unique, the RFID labels have to be created in the store or at a donation center, he pointed out. “Hence, we have to have stocks of labels at each store.”
The company went through an extensive R&D process to identify and select the proper RFID tag and label designs to mitigate encoding errors, calibration problems and potential for tag switching. “The tags, labels, are the most important piece of the puzzle,” said Yetter.
Color Coding
Goodwill sells its products with different color tags and prices are adjusted according to color codes. For instance a red tag could be on discount on a specific day. So stores have not only to print product labels, but five different colors of labels and hangtags. That meant printing tags in different colors that are then categorized in the software.
Tagging the many kinds of products required some adaptation to the tags as well. RES created a foam based applied after printing for metal goods.
“Goodwill is a unique retailer. Every store is also a production facility,” Can said. “Every day they push several thousand items to the sale floor at each store. (Therefore,) RES modified and enhanced its Retail Inventory Management System (RIMS) to incorporate the many operational functions.”
In that way inventory management, item search, POS and color of the week management could be accomplished quickly and accurately.
“MasterTel has been our partner from the beginning and provides on site support and client relation. This has been a very collaborative engagement among all parties,” said Can.
Key Takeaways:
- Ambitious RFID project at Goodwill New Jersey may save the organization millions of dollars annually.
- The solution from RES RFID technology, with MasterTel as consultant, addresses the many unique challenges of a busy, resale store.
