To meet its sustainability requirements with lean and accurate product inventory at all of its stores, Swedish fashion retailer Filippa K has implemented an inventory-management platform leveraging radio frequency identification technology. With UHF RFID tags to track each product, the company says it can ensure the right stock is available at each site without requiring overstocking. And by achieving inventory accuracy, the firm is providing customers with the ability to purchase goods online and have those items shipped from the nearest store, while still limiting stock levels at any given location.
That’s important for Filippa K, the company explains, since it means a smaller carbon footprint. The retailer spent one month deploying the system across all of its stores before the COVID-19 pandemic began last year, and it has been employing the technology during the shutdowns, as well as for onsite shoppers this year as brick-and-mortar stores resume operations. The technology is reported to provide 99 percent stock accuracy. The solution consists of an inventory-management system with software-as-a-service (SaaS) provided by Nedap, deployed by systems integrator Securitas. Handheld readers capture each garment’s RFID tag ID number during regular inventory counts.
Filippa K operates 21 stores, with three new locations opening during the first half of this year. The retailer sells sustainable fashion products designed with what it describes as Scandinavian minimalism and long-lasting quality. “Our strategy is based on ‘fewer, but better,'” says Emelie Berggren, the company’s fulfillment director. As part of its sustainability practices, the firm avoids over-production and overstocks of goods. “So it is crucial,” she explains, “that we can use all our stock and that we can keep track of the garments in our stores.”
By having an accurate inventory count at all stores, Berggren says, the company enables omnichannel sales that are intended to be efficient and timely. Limiting overstocks fits the brand’s value of product longevity and environmental mindfulness, according to Elles te Boome-Harbers, Nedap’s global sales and business developer. “Overstocking stores and distribution centers with high safety thresholds to confidently fulfill e-commerce orders does not fit these values,” she states. RFID technology, on the other hand, allows Filippa K to optimize product availability throughout all channels, both online and in-store, by consolidating stock pools.
The company began working with Nedap on the solution in February 2020. It initially launched the system with passive UHF RFID in order to improve inventory visibility at stores and thus reduce the incidence of out-of-stocks, but it has since expanded the technology’s use to omnichannel sales fulfillments. The solution consists of Nedap’s !D Cloud inventory-management platform, which was implemented by Securitas. Each store is equipped with Zebra Technologies‘ RFD8500 handheld readers, which have a Bluetooth connection to an Apple iPod iOS device.
Tags are printed onsite at stores as needed, using a Zebra ZD500R RFID printer. To launch the deployment at each store, products were tagged using blank labels and printed via a ZD500R printer. In the future, however, RFID tags will be applied, in most cases, at the point of manufacture, with source tagging provided by A-Tex, in Denmark. The RFID solution was first deployed a year ago, Berggren says, adding, “Due to the pandemic, we had to put the implementation on hold during spring.” Despite the coronavirus, she notes, all stores were using the system for stock counting by October 2020, and then for receiving and shipping orders the following month.
As tags are printed and applied to goods, employees read the tags’ unique IDs to update each item’s status in the software, and Nedap’s API-based SaaS platform captures that data. The software is integrated with Filippa K’s Infor M3 enterprise resource planning system. Integration was enabled with Nedap’s APIs, te Boome-Harbers says, and was accomplished by Filippa K’s own IT department, with the help of Securitas and Nedap. Once products are entered into the system at each store, those items’ tags are read during weekly inventory counts. Store personnel can simply turn on the handheld reader, then walk through the store to capture an updated inventory count.
That information is forward to the !D Cloud software via the tablet device linked to the reader. The software integration can feed up-to-date product-availability data into the e-commerce platform, which is provided by Episerver. In addition, the stores employ a Sitoo mobile point-of-sale (mPOS) and payment platform, which enables shoppers to use a dedicated tablet at stores allowing the purchasing of goods that may be unavailable onsite. The system employs a payment platform from Ayden to enable fast and accurate omnichannel ordering by online customers.
Elles te Boome-Harbers
As each store took the RFID-based inventory-management system live, Nedap provided remote training for sales associates. “We used our train-the-trainer methodology, supported by animation videos of the processes,” te Boome-Harbers explains. Nedap virtually trained a selection of Filippa K’s staff to use the technology, then those employees trained other workers in turn, with support from Securitas via virtual training and video calls.
Through this remote training method, te Boome-Harbers says, “Even in these COVID times, we can deploy worldwide. This way, store staff is trained properly the moment stores can open again.” While Filippa K had finished the rollout just prior to the pandemic, the company has since been able to use !D Cloud to verify incoming shipments and quickly identify any products that need to be sent to or between stores.
Initially, the project started small, with the objective of optimizing in-store product availability. Shortly thereafter, Filippa K opted to implement services allowing customers to return goods at any desired store. In addition, centralizing inventory data in order to transfer items between stores or back to the distribution centers allows Filippa K to turn a loss into a future sale. Each tag can be read as the corresponding item is returned and automatically updated in the inventory software, at the site at which that product was received.
The brand’s next step is to directly fulfill e-commerce orders from stores. If an order is placed in which goods are picked from a specific location and then shipped, associates can use the handheld reader to locate each item and update its status as shipped, as the order is packed to be sent to a customer or to another location.
“The ability to flexibly move with the consumer’s shopping preference is crucial to remain successful,” Berggren states, “and to keep providing great customer experiences under all circumstances.” The company’s long-term goal is to extend the use of the RFID technology at its distribution center. The largest gain since the solution was deployed has been in simplified processes, she reports, adding, “Stock accuracy has improved, and knowing exactly what we have in our stores is a huge benefit.”