RFID Brings Gains to Small Apparel Brand

Southern Fried Cotton, which opted to leverage a technology more commonly deployed by big companies, has brought its customer chargeback rate down by 98.8 percent, increased its warehouse efficiency and achieved an ROI within less than a year.
Published: July 31, 2019

American clothing brand Southern Fried Cotton (SFC), a small but growing company located in South Carolina, has leveraged an RFID system to automatically capture data about what is being shipped for each order. The solution is designed to prevent errors and increase efficiency at its wholesale location in Clemson, S.C.

Avery Dennison developed and deployed the solution so SFC could identify each item as it is shipped to customers. This has not only automated the capture of data about what is shipped, but also reduced the cost of chargebacks from the company’s larger retailer customers. In fact, since the system was taken live in 2017, the company reports that chargebacks have dropped by 98.8 percent, and that it has saved tens of thousands of dollars annually. SFC realized a return on its investment within about eight months.

Traci Harrington

Since being launched as a brand in 2012 (after its founders spent two decades running a graphic-design and screen-printing company), SFC has doubled its sales with a wholesale division, as well as two brick-and-mortar stores and an online shop at which it sells its products. The firm sells apparel with a southern spirit, offering design and screen printing on organic cotton T-shirts. At present, SFC has 30 employees and serves a growing customer base.

Southern Fried Cotton’s wholesale efforts began in 2014 for store boutiques in South Carolina and North Carolina, and while it originally sold product with 30 retailers, that customer base is now close to 400 across 18 states. SFC’s introduction to RFID came with a request to tag its products with EPC UHF RFID tags from one of its large retailer customers. However, the company saw an opportunity to benefit from the tags as well, recalls Traci Harrington, SFC’s wholesale account executive.

The company had a challenge to overcome: costly chargebacks for orders that customers claimed were incorrectly packed. That cost could be as much as $100 per carton. At the same time, since SFC was growing, orders were increasing in size and packing was becoming more time-consuming. In some cases, orders consisted of numerous cartons, and if a product appeared to be missing from one carton, that item might actually be included in another box, even though a chargeback had been issued to the brand. By that point, determining whether a mistake had actually been made often proved challenging.

Prior to the RFID deployment, the process of tracking orders was manual. Warehouse employees utilized paper and pen to pick and pack orders, and to record what was happening. That meant listing what was being packed in the boxes (typically, about 60 items are placed inside each carton, and an order consists of about 20 boxes). That list was then input into the company’s electronic data interchange (EDI) system to create a shipping notification. By using the RFID tags already applied to its products, the company theorized that it could improve its packing productivity and reduce the incidence of chargebacks. However, as a small company, SFC needed a solution that would be lower in cost than many RFID solutions and easy to implement, without expensive integration or hardware costs.

Southern Fried Cotton approached GS1 US and Avery Dennison for a solution. Harrington entered into a conversation with Daniel Lusty, Avery Dennison’s market-development manager. Printing hangtags onsite and on demand proved to be the most cost-effective solution, Lusty says. With the RFID system, the company was able to integrate a single tag-encoding and -printing process in only one step. In that way, it could create RFID labels for goods sent to the largest customers—those requiring RFID labels, as well as those issuing chargebacks. SFC chose Avery’s AD 237 EPC UHF RFID inlay, which was integrated into each SFC hangtag and could be printed on an Avery Dennison Tabletop RFID (ADTP1) printer.

Daniel Lusty

The company acquired an Avery Dennison High Density Read Chamber (HDRC), which was modified for SFC’s purposes to read tags as orders are fulfilled. First, boxes are packed according to shipping orders. Each product’s unique tag ID number is linked to that item’s stock-keeping unit and other descriptors in SFC’s own software. The HDRC comes with firmware that links data related to each tag ID with shipping orders as the boxes are being packed.

Each box loaded with goods is placed in the HDRC. Once a user presses “go,” the device captures each tag ID, links that data to the shipping order and displays what has been packed. The device has a flash drive connected to it, which is loaded with the purchase orders of the day on software provided by Avery Dennison. Within 1.5 seconds, Lusty explains, the HDRC firmware links the purchase-order data from the flash drive with the tag reads, after which the device displays feedback regarding the order. In the event of a discrepancy between the order and the tagged items being read—such as a missing or extra item, for instance—that information is displayed on the screen so the order can be repacked as needed.

Once the shipping process has been completed, Harrington removes the flash drive from the reader, which has stored all of the RFID read data captured related to the orders packed. She then connects the flash drive to her computer so printed reports can be generated. This process creates an electronic record, she explains, while also identifying any packing errors, without the high cost of integration or recurring fees for a cloud-based solution. “We’re not a big company,” she states. “We had to do it based on our budget.”

The key to this deployment’s success, Lusty notes, has been a focus on keeping the solution as simple and low-cost as possible. “The beauty of what they’ve done is it’s highly simplistic,” he states. “A lot of retailers get distracted by shiny things RFID offers. Traci [Harrington] was focused on packing accuracy improvements. Being able to put together something for a very small brand, that was highly effective but simple with a low cost of entry, has been very rewarding.”

The company plans to expand the system’s use in the future. For instance, Harrington says, “We’re thinking to get handheld readers,” which would make it easier to locate specific items being picked for an order, as well as to perform spot checks on what has been packed in each box prior to shipment.

Now that the RFID system has been deployed and the company has achieved a return on its investment, Harrington considers the process of developing and adopting the system to have been a success. “It’s done exactly what we wanted it to do,” she says. “It’s been a very easy transition.” She adds that her own company’s success with RFID was an indication that “anyone can do this—you take what your needs are and make a plan from it.”

For Avery Dennison, Lusty says, the SFC project demonstrates how RFID can benefit smaller companies just as well as it can larger retailers and brands. “We’ve taken a group that’s small—it doesn’t have deep pockets—and we’ve developed an affordable, yet scalable solution that yields a highly compelling ROI,” he states. In the long term, Lusty adds, the system is still scalable. “You wouldn’t want to design a solution that you’re not going to be able to scale.”

While many companies spend considerable time investigating, testing or waiting for technology to evolve, Southern Fried Cotton was ready to move quickly to start gaining benefits from RFID tag reads, Lusty recalls. “Within 48 hours, she [Harrington] said ‘What are the next steps? How do we get started?'” Too often, brands become stuck in what he calls “analysis paralysis,” he notes, adding, “To me, that’s a great takeaway from [this deployment]. They were incurring chargebacks month over month, and they wouldn’t be able to eliminate those until they made a change. So they decided to jump in and end the suffering.”