Retail and supply chain technology company SML plans to open its sixth RFID Solution Innovation Center in 2017, and to further its pop-up store deployments, as part of a companywide effort to get education about its RFID products and solutions into the hands of customers, wherever they may be. The firm opened a center in Texas in August of this year, followed by another in China in October, and a third this month in Germany.
The new centers and pop-ups follow several years of expansion in SML’s education efforts to help retailers and brands understand radio frequency identification and how they could use the technology. The effort is yielding good results, says Dean Frew, SML’s chief technology officer and VP of RFID solutions. “We’ve seen increased interest from retailers and brand owners,” he states. “They’ve been very interested in seeing ways that RFID can change the way they do business.” In addition, the number of pilots has tripled since last year.
SML, based in Hong Kong, has experienced dramatic growth in its RFID business, Frew reports, adding, “As the market grows, we’re growing with it.” The company’s expansion in the retail market is illustrated not only by the innovation centers and pop-up stores, but also by a 10 percent acquisition by Invengo. That sale serves to infuse more cash into SML as it grows its tag product and solution deployments, while also providing access to production facilities. Invengo’s 10 percent purchase (see Invengo Acquires 10 Percent Stake in SML) helps SML reach more potential customers in China. It also provides the company with more manufacturing space, based on Invengo’s Chinese tag manufacturing sites near Chinese customers that may be installing RFID technology for supply chain management as goods are produced and shipped from their plants. The investment by Invengo, however, does not affect SML’s partnerships with other technology companies, such as reader manufacturers.
The growth in RFID use for retailers and brand owners has made 2016 a good year for companies like SML. The company aims to take that momentum a step further, however, with its strategy of bringing the technology close to its existing and potential customers. The innovation centers are designed so that companies can see RFID in use, from the point of manufacture at a factory to the point of sale at a store.
During the past two years, SML Group has opened innovation centers in Corby, England; Raleigh-Durham, N.C.; Plano, Texas; and Mettmann, Germany. Last month, the firm opened another center in Shanghai, China, and another site in southern China is scheduled to open in the first quarter of 2017.
The innovation centers are intended to allow potential users to see, touch and use RFID technology before committing to a pilot or deployment. Each center includes a label and RFID inlay design section, an area for testing inlay performance and a full mock-up of back-room storage and store-front readers, creating a sample supply chain. The company allows users to sample its Clarity software and other SML products.
Not everyone has access to the centers, however, so the company is providing pop-up stores that it will bring to major metropolitan areas in a variety of countries. The company launched one pop-up store in New York to coincide with this year’s RFID in Retail and Apparel conference and exhibition on Oct. 5-6 (see SML to Host RFID Pop-Up Retail Store in Conjunction With RFID Journal’s RFID in Retail and Apparel Event), and has since hosted another pop-up store in London. The events are by invitation only, and are targeted to retailers and brand owners. The location of the next pop-up has not yet been decided, the company indicates.
The New York pop-up store consisted of approximately 2,000 square feet of space, including a mock-up store and back room with RFID readers deployed throughout, as well as RFID tags attached to a variety of garments. It was located on the 17th floor of a Manhattan building on 8th Avenue and 37th Street, and the only attendees were there by invitation. In London, the same amount of space was reserved, but in this case the simulated store was launched on the ground level of a busy high-street neighborhood, so it experienced a large amount of traffic—including from the public, Frew says, who mistook it for an actual apparel store. In both cases, he adds, visitors could view the company’s inlay and tag products and watch demonstrations of data-management systems, along with SML’s E-Platform online ordering system and FlexiPrint in-plant printing system.
“The results were new customers we didn’t know were interested,” Frew says, who visited the pop-up stores and expressed interest in pilots or deployments. Existing customers used the pop-up experience as well, he adds, in order to view the latest products being offered.
“It’s been a great way to engage with customers,” Frew states, adding that since the first innovation center opened several years ago, the company has found that customers have come in with greater knowledge of how RFID could work within their environment. “I think they have the belief now that RFID is not just a technology, but a way to improve their business.”
Next year, Frew says, SML expects that some of its large-scale customer deployments will become even bigger, and that more installations will expand across all categories. For instance, he explains, some users have been tagging only certain high-value or fast-fashion items, and they may begin tagging all other garments or accessories within their stores. He adds that SML also has had triple the number of pilots in 2016 than it had last year.
Sporting goods retailer Decathlon, for example, announced this month that it is expanding its RFID program to tag all of its products (see Decathlon Sees Sales Rise and Shrinkage Drop, Aided by RFID and Decathlon Scores a Big Win With RFID). The company is sewing RFID labels into clothing at the point of manufacture, and the goods are then traced through the supply chain and into stores, in order to reduce out-of-stocks and boost customer service. Additionally, the tags are being utilized as part of an electronic article surveillance (EAS) system to prevent shrinkage. “It’s a very successful project,” Frew states. “They’ve been a very good customer.”
SML has a presence in about 30 countries and offers manufacturing worldwide. It operates 17 service bureaus around the globe to enable fast access to RFID tags by manufacturers or other companies tagging items. The firm brought five service bureaus online this year and five others the year before. “I anticipate we will continue to see the number of service bureaus grow,” Frew says.
Most of the growth throughout the next year or two, Frew predicts, in terms of retail and brand deployments, will come from stores that sell their own brand. As a growing number of brand owners tag their goods, more department stores with a variety of brands are likely to adopt the technology.
According to Frew, users should expect to see more variety in use cases as well. “It’s amazing how creative customers are once they understand what the technology can do,” he says.