rfid: success strategies for apparel retailers · pdf filetable 1: categories for which rfid...

14
USTGlobal ® INNOVATION INFORMATION TECHNOLOGY RFID: Success Strategies for Apparel Retailers UST Global ® April 2017

Upload: ngothien

Post on 17-Mar-2018

215 views

Category:

Documents


1 download

TRANSCRIPT

Page 1: RFID: Success Strategies for Apparel Retailers · PDF fileTable 1: Categories for which RFID Has High ROI Potential Some success stories in the apparel industry have had RFID playing

USTGlobal ®

INNOVATION INFORMATION TECHNOLOGY

RFID: Success Strategiesfor Apparel Retailers

UST Global®

April 2017

Page 2: RFID: Success Strategies for Apparel Retailers · PDF fileTable 1: Categories for which RFID Has High ROI Potential Some success stories in the apparel industry have had RFID playing

RFID: Success Strategies for ApparelRetailers

Proving the authenticity of products has been a

challenge to building consumer confidence for any

brand. The rise of counterfeiting and illegal cloning

have been a threat to retailers worldwide!

According to a new report by OHIM, counterfeits

cause European luxury brands to lose out on 9.7% of

their total sales every year, or a staggering €26.3

billion ($28.7 billion). Knock-offs of these brands are

easily available in the market. Product manufacturers

pay dearly for counterfeiting including brand erosion,

loss of market share, intellectual property value

dilution, customer support for non-authentic prod-

ucts, and bad will.

Luxury houses are prone to having their items stolen

and sold in the black market, as they are synonymous

with status. Louis Vuitton bags, Gucci shoes, Burberry

coats, you name it—have been the targets of theft! The

prospects of high value merchandise being openly

accessible to customers increases the chances of theft

and fraud.

Just another scenario — You are approaching the

Yearly Sales Season. Your fast selling items appear to

be in stock, but not in all the sizes that sell out the

fastest. Even when an item is available in the retail

house, it may not be on the correct shelf. Inaccurate

location tracking adds to the chaos and creates a

‘false out-of-stock situation’, leading to loss of sales

on items with the highest sales throughput, with an

added likelihood of the stock never being cleared.

Keeping track of high-end products is key to accu-

rate inventory. Knowing what arrives in your distribu-

tion centre or store and then knowing what leaves

should, in theory, give you an accurate inventory.

However, life is not that simple! Boxes and crates are

often misplaced & shopper behaviour leads to items

turning up all over the store, making real-time

location tracking a tedious task. Unlike a regular

Walmart or Target store where each product has

multiple sizes and variations, Luxury products are

limited edition and often custom made; each

misplaced product could potentially equate to loss in

sale, customers and opportunities.

As per a 2004 report from Harvard Business School,

8% of retail items are out of stock at any given time,

costing the top 100 retailers approximately $69

billion a year. The inability to find items results in up to

65% erroneous inventory counting and out-of-stock

situations.

Ensuring precise inventory and stock control is of

prime focus for commodities such as Fashion Appar-

el, considering the number of times a product moves

from shelves to trial rooms, and the overhead of

exchanges. Technology brings in positive transitions

to the business, ensuring accuracy and streamlining

processes despite changes at the back end. In

today’s digital world, ‘brick and mortar’ stores are

transforming to ‘brick and click’ stores at the speed of

light!

UST GLOBAL I RFID: SUCCESS STRATEGIES FOR APPAREL RETAILERS – A UST GLOBAL WHITE PAPER I APRIL 2017 2

Page 3: RFID: Success Strategies for Apparel Retailers · PDF fileTable 1: Categories for which RFID Has High ROI Potential Some success stories in the apparel industry have had RFID playing

UST GLOBAL I RFID: SUCCESS STRATEGIES FOR APPAREL RETAILERS – A UST GLOBAL WHITE PAPER I APRIL 2017 3

RFID fits into the new Retail IT perspective as a novel business value added framework, occupying a significant

position in the retail IT landscape over the past decade. Until now, beacon technology has been primarily used

for in-store digital marketing efforts. RFID solutions can offer much more detailed location data for certain appli-

cations than proximity-based beacons, eventually helping in assessing the effectiveness of a store's layout,

displays and end-caps on a real-time basis.

Many people understand RFID as a next-generation barcode with technology to automate inventory control.

Few people understand that this technology can also protect against counterfeiting, and even fewer have the

knowledge of how or what to consider when shopping for the right anti-counterfeit solution.

Item level tagging is at the core of RFID’s value addition to the retail industry. Recent reduction in size and costs

of RFID tags and new methods of printing and encoding have increased inventory accuracy for retailers, gener-

ating value beyond the supply chain, throughout the entire value chain. Messages notifying a store associate of

low stocks in particular shelves can proactively encourage replenishment via back-room stock, thus optimizing

their sales. The potential value realized is targeted at 100% inventory accuracy, significant reduction in person

hours for inventory management and replenishment, decrease in shrinkage and reduction in wait times at

checkouts leading to increased customer satisfaction and sales. All these result in high return on investment in

RFID.

UST Global has been a long-time observer of the RFID industry. We have been witnessing with déjà vu, RFID

implementations building steadily to a "tipping point" in 2017. We project that by 2020, Retailers who imple-

ment RFID techniques will outpace the competition by 4x times the laggards. This paper explores UST Glob-

al’s recommended strategies which can be adopted by Apparel Retailers to succeed in Omni-Channel

retailing.

Abstract:

Nearly 8 Billion RFID Tags to bePurchased in 2017

8 BILLIONRFID Apparel Tags

In just the last few years RFID tags in distribution within the retail supply chain have more than doubled.Tags in the retail space, have exploded from 3 billion in 2014, to a projection of nearly 8 billion in 2017.

2014 - 3 Billion Tags

2015 - 3 .9 Billion Tags

2016 - 6.1 Billion Tags

2017 - 7.9 Billion Tags

Page 4: RFID: Success Strategies for Apparel Retailers · PDF fileTable 1: Categories for which RFID Has High ROI Potential Some success stories in the apparel industry have had RFID playing

UST GLOBAL I RFID: SUCCESS STRATEGIES FOR APPAREL RETAILERS – A UST GLOBAL WHITE PAPER I APRIL 2017 4

InsightsAll retailers have a plethora of responsibilities to provide the customer with authentic products in today’s global

trading community—it involves more than just spotting a knock-off designer handbag on sale at a flea market.

Companies invest millions of dollars to design, manufacture, test, market and sell items to create an emotional

connection with their consumers. With technology driving an “always on-always open” digital marketplace,

anything can be faked. So how can the Retail industry stakeholders ensure that the luxury handbag sitting on the

store’s shelf is absolutely Authentic? At the heart of any good anti-counterfeit plan is inventory visibility, with

technology being its critical enabler.

Apparel retailers have invested billions to implement Omni-Channel strategies, but few have succeeded.

Process inefficiencies in supply chain and inventory management result in failure of these strategies. Profitability

and margins are under the scanner more than ever before. Getting things done in less time will ultimately reduce

costs and strengthen the bottom line.

Most retailers spend considerable amounts of time in one single aspect – obtaining adequate supply chain

visibility – a precise view of the inventory to put the right amounts of items in the store, order right quantities to

limit out-of-stock conditions, and to ensure that warehouses and store back rooms have the right quantities in

stock. Currently, inventory counting is a time-consuming, manual and error-prone process. Out of stock situa-

tions, along with a converse overstock situation where supply of a given product exceeds its demand, collective-

ly contributes to inventory distortion, costing retailers of the world $1.1 trillion annually.

Into this space comes the promise of RFID technology. The sweet spot of RFID is the effortless tracking of every

product at every moment in the journey from manufacturing to the final point of sale. An unprecedented view of

the inventory and movement of assets and products is critical in shaping strategies for explosive business

growth.

Figure 1 Usage of RFID in store

95%Inventory Accuracy

Adopting item-level RFID can

increase inventory accuracy up

to 99% and maintain it at 95-99%.

This level of accuracy enables

retailers increase on-floor

availability by up to 30% and

successfully implement

Omni-Channel strategies.

Analytics

ProductExperience

Loss Identificationand Prevention

Omni-Channel &Inventory - Intelligence

Page 5: RFID: Success Strategies for Apparel Retailers · PDF fileTable 1: Categories for which RFID Has High ROI Potential Some success stories in the apparel industry have had RFID playing

UST GLOBAL I RFID: SUCCESS STRATEGIES FOR APPAREL RETAILERS – A UST GLOBAL WHITE PAPER I APRIL 2017 5

Figure 2 Retail Categories and RFID Adoption

Proven Higher Lower

Backroom

Checkouts

Sporting Goods

Automotive

Seasonal

Car

ds

and

Par

tyH

om

eIm

pro

vem

en

t

Appliances

Electronics

Music / Movies / Books

Toys and Games Domestics

Men’sBasics

Luggage

Men’sFashions

Women’sFashions

Hosiery Shoes

Accessories Jewellery

Lingerie

Infants andToddlers

Furniture

Cleaning

Pet Care

Health

PharmacyCeramics

KitchenAppliances

Tab

lew

are

Gir

ls’

Wo

me

n’s

Bas

ics

Fit

tin

g R

oo

ms

Frozen Food

Wine and Spirits

Dry Groceries

Bakery

Me

als

& S

eaf

oo

dF

resh

Dai

ry

Freshproduce

Deli

Chiled Ready Meals

RFID has high ROI potential in the following categories:

Categories with High Potential for ROIKey Characteristics Example Categories Operational benefits Financial benefits

Complex mix;stocked year-round

Basics:• Lady's Intimates

• Denim

• Dress shirts

• Fashion apparel

• Seasonal items

• Footwear

• Guns

• Luggage

Seasonal

Display executionchallenges

High shrink risk

• Out-of-stocks reduced

• Labor reduced or reassigned

• Customer satisfaction up

• Omni-channel execution

• Markdowns reduced

• Omni-channel execution

• Better merchandising of SOH

• Markdowns reduced

• Revenue uplift

• Shrink reduction

• Carrying cost reduction

• Revenue uplift

• Gross margin uplift

• Shrink reduction

• Revenue uplift

• Gross margin uplift

• Reduced sales effort

• Jewelry

• Off-price retail

• Shrink reduction

• Labor reduced or reassigned

• Lower COGS

• Gross margin uplift

Table 1: Categories for which RFID Has High ROI Potential

Some success stories in the apparel industry have had RFID playing a key role. The yoga and sports apparel retailer Lululemon increased its ecommerce sales by tracking the location of millions of goods as they move about in the stores. RFID brought inventory accuracy in the company’s internal systems to 98%. The ability to know with precision the store in which each product was available improved their Omni-Channel solution to meet customer needs. Apart from sales, RFID technology also reduced labour hours. Stock refilling and invento-ry counting time were reduced by more than 50%. The number of stock-outs was reduced to less than 50 items at any given point in time, with a few stores even reaching a goal of zero out of stocks throughout the day.

In January 2017, Thomas Pink deployed a digital solution that would allow the luxury apparel retailer to track the movement of both people and products around its New York City store with the help of RFID and multi-sensors. The solution designed to improve store operations has been a blessing for sales associates. If a customer picks up a men's shirt, carries it elsewhere in the store and then abandons it for another product, the next shopper looking for the shirt may not be able to find it, and the sales associate will end up searching for the desired item. With the new digital solution, a Thomas Pink sales associate with that item's exact location can immediately locate the missing item. Additionally, if the garment sold is the last one of its style and size in-store, the solution can immediately alert an associate to place a replenishment order, rather than waiting until the end of the day for a stock check.

Page 6: RFID: Success Strategies for Apparel Retailers · PDF fileTable 1: Categories for which RFID Has High ROI Potential Some success stories in the apparel industry have had RFID playing

UST GLOBAL I RFID: SUCCESS STRATEGIES FOR APPAREL RETAILERS – A UST GLOBAL WHITE PAPER I APRIL 2017 6

Beginning with its pre-fall 2014 collection, Salvatore Ferragamo began embedding RFID chips into the soles of its women’s shoes to enable verifying their authenticity. Later, they used RFID chips in other categories such as women's bags, men's shoes and small leather goods. In 2015, the brand assisted authorities in seizing and destroying $17 million dollars of knockoffs, mostly counterfeit belts made in China, aiming to reduce the sale of counterfeits and preserve the authenticity of goods in case of exchanges.

Improvement in key Retail Metrics/KPIs Before and After RFID adoption

BEFORE RFID AFTER RFID IMPROVEMENT

Figure 3 : RFID impact in Retail KPIs

*Improvement is reflected by reduction

67.4%

64.6%

16.5%

17.8%

8.9%

14.8%

84.5%

71.7%

9.8%

11.8%

14.3%

11.9%

25.4%

11.0%

40.6%*

33.7%*

60.7%

19.6%*

Inventory Accuracy

Customer Satisfaction

Store Out-of-Stocks

Shrinkage

Profit Margin

Average Markdown

Zara, the innovative, fast-growing retailer has implemented RFID in more than 2000 stores. The time taken for

physical inventory has come down to less than 15% of the time when it used to be manual.

Coccinelle, a high-end children’s clothing retailer optimized its inventory accuracy using RFID, resulting in more

than 60% decrease in online order cancellations. Giving customers a precise view of what items were currently

available at which store improved the BOPIS (Buy Online Pick up In-Store) sales, and prevented them from

ordering sold-out products. Implementing RFID right from the warehouse gave the retailer a real-time view of

the inventory, to display accurate information across all channels.

American Apparel used RFID to create exception reports to identify internal theft by store associates. Sifting

through discrepancies in RFID and POS data, the retailer managed to decrease overall shrink by 30%, equating

to more than $5 million in savings.

Figure 3 depicts the key retail KPIs considered in recent times. Increased inventory accuracy and customer

satisfaction, along with reduction in store out of stocks and shrinkage are prominent outcomes in recent

surveys.

RFID at a GlanceRFID belongs to a group of technologies referred to as Automatic Identification and Data Capture (AIDC). At a

simple level, RFID systems consist of three components: an RFID tag or smart label, an RFID reader, and an

antenna. RFID tags contain an integrated circuit and an antenna, which are used to transmit data to the RFID

reader (called an interrogator).

Page 7: RFID: Success Strategies for Apparel Retailers · PDF fileTable 1: Categories for which RFID Has High ROI Potential Some success stories in the apparel industry have had RFID playing

UST GLOBAL I RFID: SUCCESS STRATEGIES FOR APPAREL RETAILERS – A UST GLOBAL WHITE PAPER I APRIL 2017 7

The RFID device is similar to the barcode or the

magnetic strip at the back of a credit card, which

provides a unique identifier. Just as a barcode, the

RFID device must be scanned to retrieve the identify-

ing information. Providentially, RFID works better

than barcodes, as the RFID device need not be

placed directly under the scanner. The RFID reader

converts the radio waves to a more usable form of

data. The data is then transferred through a commu-

nications interface to a host computer system and

stored in a database, and can be analysed at a later

point in time.

As an inventory management solution, RFID technol-

ogy represents a quantum leap forward from the

conventional UPC or barcode.

Figure 5 Apparel RFID tags

Figure 6 Active and passive RFID tags

HANG TAGS

SELF ADHESIVES

PRINTED FABRIC LABELS

How RFID Works

+ + +EPC+TAG TAG Product RFID Reader Warehouse

RFID readers transmit up to 1 watt of power into the

space where an RFID tag might be. The tag, akin to an

electronic barcode, relies on power from the reader

to echo back its ID. In a room full of products, the

RFIDs can be read in seconds. The various types of

RFID devices are:

Passive Reader Active Tag (PRAT)

Active Reader Passive Tag (ARPT)

Active Reader Active Tag (ARAT)

Multiple types of RFID tags are used in the apparel

industry. Common examples are Hang tags, Self-ad-

hesives, and Printed Fabric Labels (PFL).

RFID over Barcodes:RFID can eventually replace barcodes in applica-

tions where bulk counting is routinely performed. An

RFID tag can hold much more data about an item

than a barcode. Additionally, unlike barcode labels,

RFID tags are not susceptible to damage such as

ripping and smearing.

Figure 7 RFID Bulk Counting

Page 8: RFID: Success Strategies for Apparel Retailers · PDF fileTable 1: Categories for which RFID Has High ROI Potential Some success stories in the apparel industry have had RFID playing

UST GLOBAL I RFID: SUCCESS STRATEGIES FOR APPAREL RETAILERS – A UST GLOBAL WHITE PAPER I APRIL 2017 8

Integrating RFID into the Entire Supply Chain: Maximum Gain for Omni-Channel Success

Figure 8 Smart Face technology PFL

Figure 9 RFID integration in the entire supply chain

UST Global cognizes the value benefits of RFID over conventional barcode from the following key aspects:

Key Aspect Barcode Scanner RFID

Line of sight

Simultaneoustag capture

Type of data

Environmentalsustainability

The code should be in line of sight of the scanner to perform the operation.

RFID tags only need to be within the read range (this can be controlled by modulating the strength of RFID readers or by sending stronger RF signals using a battery).

Barcodes are captured one at a time.

RFID tags can be captured in bulk. This is of key advantage in back roomoperations, while receiving. Figure 7 depicts the store associate using anRFID interrogator to count all items in a box that has arrived in the storeback room.

Barcodes can hold only static data.

RFID data can be dynamic. EPC (Electronic Product Code) data stored in RFID tags contains the product and stocking information, which can be erased to ensure security of information when the product is sold.

Plastic barcode cards are not environment friendly.

Figure 8 shows an advanced sustainable RFID tag solution available in the market. The non-recyclable plastic substrates are replaced by a recyclable RFID tag which uses only paper, aluminium and a small silicone chip. This has reduced impact on the environment.

Design and development

MANUFACTURING

DISTRIBUTOR

RETAILExit/employee door RFID readsenable tracking of store merchandiseat the final point of exit, validating thesale and helping to prevent theft.

Fixed RFID readers at transition doors trackproduct flow between stock and selling areas.

Cycle counting validates proper stocking levels and complianceas well as replenishment and product location for totalcustomer satisfaction.

Fixed RFID readers receive all inbound cartonsor pallets.

Urgently needed merchandise is identified andrushed to selling floor for restocking.

Outbound RFID tags are readat the dock door and an Advance

Shipping Notice (ASN) is generated.

Suppliers at point of manufacturing apply RFID tagsto individual items, cartons and/or pallets;items are then associated with the enterpriseitem-file system (source tagging).

During the cross-dock sortingprocess, individual items or cartons

are read with nearly perfect accuracy.Outbound pallets are then created.

Outbound pallets areplaced onto a shrinkwrapper,reading and verifying pallet contents.

Forklift-mounted RFIDreaders assist in stockedmerchandise put-awayand pallet delivery tocorrect outbound dock.

Inbound goods arereceived and read tomatch the ASN.Item-level visibilityalerts associatesto any discrepancies.

Outbound shipmentsand destinations areverified a final time atthe dock door.

Forklift-mounted RFIDreaders assist in stockedmerchandise put-awayand pallet delivery tocorrect outbound dock.

Inventory is automatically updated asRFID-tagged items are read at the register,eliminating stock outs and enablingautomatic replenishment of thesales floor and placementof orders.

Antenna ChipStrap

Printable face stock

Adhesive

Inlay (antenna, strap and chip)

Paper substrate(Replaces P.E.T. carrier)

Release liner

Proximity-BasedCommunication

ElectronicDynamic Pricing

Multiple CustomerAssist Outlets

Intelligent,Interactive Fixtures

Products In-Stock

Page 9: RFID: Success Strategies for Apparel Retailers · PDF fileTable 1: Categories for which RFID Has High ROI Potential Some success stories in the apparel industry have had RFID playing

UST GLOBAL I RFID: SUCCESS STRATEGIES FOR APPAREL RETAILERS – A UST GLOBAL WHITE PAPER I APRIL 2017 9

Loss Prevention, Location Tracking &Counterfeiting

To reveal the true potential of RFID and generate maximum benefit for the retailer, RFID technology has to be

built into the entire supply chain. RFID needs to be adopted by the manufacturer during the production and

shipping out of the garment. The logistics team needs to adopt and use RFID for shipping and delivering goods

at warehouses and stores, to optimize labor-intensive activities in the warehouse. In the store, associates need

to use RFID to ensure item stocks are at optimum levels. Exception reports generated from POS and RFID data

can be used by the retailer to reduce shrink.

Traditional surveillance systems inform retailers every time they are breached, but not what exactly left the store. RFID systems provide protection from theft, as items will be tracked when leaving the store and exact product information can be sent directly to security staff. In addition to improving loss prevention, Exit/em-ployee door RFID reads enable tracking of store merchandise at the final point of exit, validating sales and preventing in-house fraud.

Smart use of RFID technology enables retailers to track the precise movement of an item inside a store. Using a network of mounted sensors integrated with video data enables product tracking and brings down customer theft drastically.

RFID will provide retailers the ability to have a unique ID per item. Item-level RFID provides significant protection against counterfeit items in the case of product returns, exchanges and customer complaints. This will contribute majorly towards loss prevention, as it can be confirmed whether a sold item being returned is the same, and not a fake one instead. Using sewn-in printed fabric labels (PFL) can deter theft, and help identify fraud during merchandise return.

Other intangible benefits include reduction in loss of sales through increased visibility and better manage-ment of stock through accurate, real-time location of products moving in the store. Real-time RFID inventory systems support the restocking and reordering processes. The system proactively highlights when a shelf or rail is running low of a certain item or size, prompting the staff to restock from the back room or gather misplaced items from around the store. During recent Black Friday sales, major retailers like Target and J.C. Penney provided in-store mapping technology, allowing shoppers to use mapping tools within the retailers’ apps to find the best deals within their respective stores.

John Smith picks up a branded T-shirt - SKU 123, RFID 1234 from the store.

The next day, he revisits the shop for a refund, with the receipt.

He sneaks in to pick up another T-shirt - SKU 123, RFID 1235 from the rail, and proceeds to refund.

John Smith is denied a refund, as the RFID tag reveals that the item returned is not the same as the one sold.

Scenario:

Inventory Management and Product TrackingThe complexity in managing massive inventories at every link in the supply chain and providing actionable intelligence of products and shipping logistics is enormous. A collaborative effort from all businesses involved is required to successfully improve processes, meet customer demands, reduce costs, and increase profitability.

UST Global understands its partners’ goals, business and customer requirements to foster a successful supply chain partnership to implement RFID at the ground level.

Page 10: RFID: Success Strategies for Apparel Retailers · PDF fileTable 1: Categories for which RFID Has High ROI Potential Some success stories in the apparel industry have had RFID playing

UST GLOBAL I RFID: SUCCESS STRATEGIES FOR APPAREL RETAILERS – A UST GLOBAL WHITE PAPER I APRIL 2017 10

RFID tags will be printed and embedded into the apparel by the manufacturer. Work in progress can be tracked, and automated shipping information will be updated to the central systems. Once the items are shipped to warehouses, automated systems can trigger advance shipping notices by scanning the packages put out to the trucks.

RFID provides the intelligence necessary to maintain a small safety stock which equates to reductions in holding and labour costs, and increased efficiency in the distribution centre (backrooms) and in-store. Bulk RFID scanning can be used to verify items while picking and packing, thus enabling fast scanning for inventory counts to schedule shipping and delivery. As compared to manual methods, RFID inventory counts are at least 60% faster.

Automated store floor replenishment can be enabled using RFID tags, and integrating POS to the backend inventory system. Based on items sold at the POS, businesses can have accurate, near-real-time intelligence into inventory records, and locate items in a facility at all times.

Adopting item-level RFID can prevent inventory distortion and loss of sales, increase inventory accuracy up to 99% and maintain it at 95-99%. This level of accuracy enables retailers to increase on-floor availability by up to 30% and successfully implement Omni-Channel strategies.

With RFID, inventory counting can be done faster, more frequently and with greater accuracy, leading to significant reductions in out-of-stocks and improved revenue and gross margin. Figure 10, explains the inven-tory accuracy statistics for Manual v/s Automated counting.

Figure 10 Automated Counting results in Higher Inventory Accuracy

100%

90%

80%

70%

60%

0 90 180

Inventory Accuracy Degrades Between Counts

More Frequent Counting Enabled by RFID Means Higher AccuracyChainLink Research

Barcode--semi-annual RFID--bi-weekly

With RFID, bi-weekly counts canpush accuracy to over 95%

A typical retailer who counts semi-annuallywith barcodes might see accuracy drop to~65% between counts

Page 11: RFID: Success Strategies for Apparel Retailers · PDF fileTable 1: Categories for which RFID Has High ROI Potential Some success stories in the apparel industry have had RFID playing

UST GLOBAL I RFID: SUCCESS STRATEGIES FOR APPAREL RETAILERS – A UST GLOBAL WHITE PAPER I APRIL 2017 11

Figure 11 Inventory Accuracy positively impacts Inventory Management

Inventory accuracy positively impacts all aspects of inventory management, as depicted in figure 11:

Exception reports generated by analysing and comparing POS data with RFID data will help bring downassociate theft by identifying specific patterns. This reduces sweet hearting by store associates.

Inventory Intelligence

Inventory Accuracy

RevenueCustomer Sat Margin

OpExOpEx

COGS

Product availabilityand merchandizing Planning and

allocation Labourefficiency Loss

prevention

Reduced OOS better display execution

Better omni-channel execution

Reduced markdowns

Reduced inventory carrying costs

Better omni-channel execution

Counting

Replenishment

Receiving

Stocking

Shrink pattern recognition

Ch

ain

Lin

k R

ese

arch

Ad

apte

d f

rom

Tyc

o R

eta

il S

olu

tio

ns

Improving Customer ExperienceRFID tags can help retailers track the customer’s shopping behaviour to identify why an item is not selling

well. For example, if RFID data indicates that the item is taken to the fitting room but not converted to sale,

the problem could be with the fit.

RFID readers fixed at transition doors track product flow between the stock and selling areas. Exception

reports and patterns help managers improve customer experience by putting out the best products match-

ing their needs.

RFID can improve the checkout time. Customers waiting in line can get extremely impatient. RFID devices

can work even at a few feet from the scanner; if a bag full of purchased items comes under the scanner, it

queries all the RFID devices and totals the purchases immediately. Check out times can thus be improved

over 40% using RFID. Delighted customers drive repeat business and will surely buy more from an RFID

enabled customer, as opposed to a regular retailer.

The ease of the process also encourages customers to increase their cart size, thereby enabling retailers to

achieve top-line growth.

Page 12: RFID: Success Strategies for Apparel Retailers · PDF fileTable 1: Categories for which RFID Has High ROI Potential Some success stories in the apparel industry have had RFID playing

UST GLOBAL I RFID: SUCCESS STRATEGIES FOR APPAREL RETAILERS – A UST GLOBAL WHITE PAPER I APRIL 2017 12

Loss Prevention – smart use of RFID to attack the Shrink problem – even 1% return is adding directly to the

bottom line.

Real time Inventory – automation of core inventory processes – producing great savings in labor costs in

warehouses and stores counting. Automatic replenishment will reduce stock outs and bring in more revenue

from available inventory. This is very much needed for Omni-Channel integration across the supply chain.

Bringing Delight in Customer Experience – RFID use cases can help in reducing stock-outs, as well as to give

data analytics on customer preference for items (eg., apparel and the sizes used); delighted customers add

revenue, adding to the top line.

ConclusionRFID technology allows retailers to better serve their customers online, on-the-go, and in-store. By ensuring

the authenticity of products, streamlined in-store experience and sales processes, improved inventory accura-

cy and theft prevention, it’s a win for customers, a win for the employees, and an even bigger win for the retail-

er’s bottom line. RFID enables transforming the retail experience to a consistent consumer engagement

platform both online and offline. RFID adoption is a true growth engine for an Omni-Channel retailer.

UST Global believes that RFID is the key driver to the three main gears of change with Retailers in the coming years.

Overall, RFID will be a game changer in the next 4-5 years, with direct impact on the top line as well as

bottom line.

ReferencesDomestic pulse of the online shopper – review 2015.

http://www.abr.com/what-is-rfid-how-does-rfid-work/

http://www.kurtsalmon.com/en-us/Retail/vertical-insight/1628/Kurt-Salmon-RFID-in-Retail-Study-2016

https://www.retailcustomerexperience.com/news/childrens-cloth-ing-retailer-uses-rfid-to-reduce-online-out-of-stocks/

https://www.zebra.com/content/dam/zebra_new_ia/en-us/solu-tions-verticals/product/RFID/GENERAL/White%20Papers/WP_Item-Level_Supply_Chain_0413.pdf

For more discussion, please reach out to: www.ust-global.com

Page 13: RFID: Success Strategies for Apparel Retailers · PDF fileTable 1: Categories for which RFID Has High ROI Potential Some success stories in the apparel industry have had RFID playing

UST GLOBAL I RFID: SUCCESS STRATEGIES FOR APPAREL RETAILERS – A UST GLOBAL WHITE PAPER I APRIL 2017 13

Jenson JosephJenson Joseph is a member of the Retail Practice team of UST Global. He is a senior

business analyst with more than 15 years of experience in various segments of

retail including POS, Supply Chain, Master Data Management , Transportation and

Logistics and Warehouse Management. Inquisitive about new technologies, his

recent areas of interests span RFID , Block Chain, Inventory Management and Loss

prevention. In his current role he seeks to apply the synergy of latest technologies

and processes to solve business problems.

Roohneet Kaur : Roohneet Kaur is a Content & Communications Executive at UST Global with past

experience in Market Research , Presales and Content Marketing.

She is passionate about Digital Marketing initiatives and likes to analyze trends

across industries like Retail, Travel & Healthcare to apply the learnings across

relevant solutions in her current role.

About the Authors

Page 14: RFID: Success Strategies for Apparel Retailers · PDF fileTable 1: Categories for which RFID Has High ROI Potential Some success stories in the apparel industry have had RFID playing

UST Global® is a fast-growing company that provides advanced computing and digital services to large

private and public enterprises around the world. Driven by a larger purpose of Transforming Lives, and

the philosophy of “fewer Clients, more Attention”, we bring in an entrepreneurial spirit that seeks the

fastest path to value in today’s digital economy. Our innovative technology solutions and pioneering

social programs make us stand apart. Our clients include Fortune 500 companies in Banking and

Financial Services, Healthcare, Insurance, Retail, High Technology, Manufacturing, Shipping, and

Telecom. We believe in building long-lasting, strategic business relationships through agile and

client-centric global engagement models, combining expert on-site and local resources with cost,

scale, and quality advantages of offshore operations.

For more information please visit www.ust-global.com

ABOUT UST GLOBAL®

Corporate Office UST Global ®5 Polaris Way, Second Floor, Aliso Viejo, CA 92656

Tel: (949) 716-8757 Fax: (949) 716-8396www.ust-global.com

For further information contact: [email protected]

/USTGlobal /USTGlobal /ustglobalweb /company/ust-global

USTGlobal ®

INNOVATION INFORMATION TECHNOLOGY