Archive for the ‘apparel’ Category

Item Level RFID Initiative considers adopting a global approach by partnering with retailers in Europe

Wednesday, May 11th, 2011

The Item Level RFID Initiative made some big waves in January when it unveiled its mission at the National Retail Federation conference in New York. Since then, the group has been relatively quiet as it studies issues like serialization, tagging compliance and how to handle the massive amounts of data that retailers will soon harness from RFID.

The goal of the group, which includes retailers like Walmart, Macy’s, Kohls and Dillards, is to further accelerate item level tagging by publishing industry guidelines and business case roadmaps for return on investment for retailers and suppliers. (Click here to read RFID 24-7′s previous coverage on ILRI)

The group is now considering admitting European retailers into the group to make for a more global approach when it comes to standards. The move seems to make sense, since many retailers utilize the same suppliers in China.

In a recent interview with RFID 24-7, Gerry Weber CIO Christian von Grone explained his desire to collaborate with his North American retail counterparts.

“We have a similar situation in Europe with two or three different initiatives just coming from the ground where industry partners are joining to see what we can we do about RFID in Europe,” he says. “We are part of two of those initiatives. Some of the members of the ally would like to coordinate our efforts (with the U.S.) because in the long run we all meet at the same suppliers in China.”

Gerry Weber belongs to the FashionGroup  RFID and the Working Group Source Tagging initiative.

Bill Hardgrave, who is an advisor to the group and a member of the staff at Auburn University, believes the North American group should seriously consider global collaboration.

“The Item Level RFID Initiative should include all retailers and brand owners,” he says. “In short, I think we need to get them involved and I hope we find a way to do it.”

Grone says that developing separate standards in the U.S., Europe and other parts of the world would only make things more difficult for suppliers. “We should coordinate our efforts so that we have the same technology standards and the same  standards for things like tag placement. We encourage GS1 US Europe and GS1 global and who else is out there to help us coordinate this worldwide.

“In Europe we have a great interest to join the ally.”

Grone says his North American counterparts have shown an interest in making the group more globally focused. “They know that we have conducted lots of research and in some cases we are maybe a little further along when it comes to implementations than the U.S., so sharing those experiences will be a good thing. Besides, the U.S. is very retail driven and Europe is industry driven and putting those strategies together could be very helpful to both of us.”


Retailer Gerry Weber enters Phase 2 of RFID deployment

Sunday, May 8th, 2011

For those that missed last week’s newsletter, we’ve posted it here. Leave a comment and let us know what you think!

Gerry Weber has been a driving force behind item level retail tagging. The German retail chain has taken an aggressive stance on RFID and became the first overseas retailer to source-tag all of its products earlier this year when it began tagging all 28 million items that travel through its supply chain.

As both a manufacturer and a retailer of women’s fashion items, Gerry Weber has added incentive to tag at the source of manufacture. In a recent interview, CIO Christian von Grone explained that in phase two of its RFID program, Gerry Weber will extend the use of RFID to improve front of store and back store operations.

Gerry Weber is also making its RFID software interface available to all apparel manufacturers, and expects utilize cutting edge RFID systems to provide a near real-time view of inventory and to allow customers to shop with interactive fitting rooms.

Grone says that Gerry Weber is the first company in Germany, and possibly in Europe, to embed RFID tags into the garment care labels that are sewn into apparel items individually. One single label provides fabric care instructions, track and trace, and the electronic product code to manage inventory.

The retailer, which operates more than 400 stores and 2,000 shop-in-shop outlets, decided to tag of all its garments so it could gain greater supply chain visibility, in addition to the store level benefits of RFID.

The company invested about $2.8 million to tag all its products. Grone notes that the tagging represents an 8-9 cent premium above the 4-7 cent (Euro) cost to produce the conventional care label that is affixed to every garment. Gerry Weber recently concluded an additional investment of about $2.7 million Euros to roll out RFID, and expects payback in two years.

“We made the decision to source tag everything so that we can make full use of RFID in our logistics process,” says Grone. “Otherwise we would have to split production and split warehousing between owned, retail and wholesale volume, and this would add complexity to our processes. We want to simplify processes with RFID.”

Part of the use case for Gerry Weber was the expectation that as tagged goods arrive at retailers, they will begin to use RFID as well. Therefore, Gerry Weber profitability is bound to improve as a result of having more products readily available at retail outlets. Grone says Gerry Weber has already seen several retail pilots develop since it went to 100 percent source tagging early this year.

“We’ve been 100 percent source tagging since January and in those three months I’ve had about as many questions about RFID from retailers as within the last year when we were in the press and had big press conferences and presentations,” says Grone. “The retailers start to believe that the technology is working when they see the chips in the garments. We’re seeing the first pilots with mid-sized retailers. The larger players are undecided.”

Grone says that the retail pilots are starting small, with a store using a single handheld reader to start off with. He stresses that it is not important to capture all the benefits of RFID at the outset, but to just gain an understanding about what the technology can achieve.

Although Gerry Weber understands the value that comes from having stock on the store shelves at all times, a major driver for the source tagging program was that electronic article surveillance (EAS) could be incorporated into the RFID tag as well, eliminating the added cost of applying a second tag to the garment.

“The biggest driver is replenishment and out of stock minimization and all those other things that we know about, but it wouldn’t have worked without the EAS part,” says Grone. “The use case just wouldn’t have worked without the EAS component.”

Gerry Weber still has inventory carrying the old EAS tags, and will funnel those products through its supply chain until June. At that point, the EAS security gates in stores will be removed, and the chain will rely solely on RFID for the EAS security function. The RFID tag will not be deactivated until the garment is purchased, allowing an alarm to signal if someone leaves the store without paying for an item.

When it comes to phase two of its RFID program, Grone says Gerry Weber will first look at replenishment programs at its larger stores. “If we don’t have an item on the shelf but in backroom storage, we have to replenish it as soon as possible, thus enabling further sales,” he says. That’s no surprise, as replenishment and reducing out-of-stocks is a major driver for every retailer.

Also in the works is a pilot for using intelligent fitting rooms powered by RFID, with touch screen monitors that display information about the item the customer brought into the fitting room. By utilizing the touch screen, customers can signal a store associate to bring another size or color of the item to the fitting room, enabling a better customer shopping experience.

Gerry Weber is currently in the process of establishing the software interface between manufacturers’ software and its own hybrid supply chain management tool. So far, two software manufacturers have agreed to implement this in their software. “We expect this to be up and running in June, with more to follow,” says Grone. “By the end of the year, I expect about 30 percent coverage with our suppliers,” including all of the major ones. That will enable source tagging to spread to other apparel manufacturers at a quicker pace.

Another phase two project includes piloting the Mojix solution at one store, most likely to begin in September. The Mojix STAR system enables organizations to use inexpensive UHF passive RFID tags for real-time location tracking, bringing economic advantages to supply chain management and asset tracking. By using Mojix, Gerry Weber will gain a near-real time view of its inventory, enhanced by location information. Store associates, for example, could generate a list of misplaced items in a store, and link product placement information with sales data to enhance visual merchandising operations. Furthermore, the Mojix system could replace the store’s RFID EAS gates.

Gerry Weber will also likely look to enhance EAS functionality with a “tamper-protect” tag, using the new NXP G2xx generation of RFID chips.

“We are very excited about new technology,” says Grone. “The interesting part is how do you get the industry to take part on this? Luckily in Europe, we have many fashion companies who have at least 20 percent owned retail as well. Companies like VOS Sports or Oliver that have 10-20 percent volume through their own retail outlets can make RFID pay off in their own retail operations, and also by helping the other 80 percent or so of their volume going to the broad market. Therefore, all retailers benefit.”

Serge Blanco realizes huge productivity gains from RFID deployment

Thursday, April 21st, 2011

Retailers continue to embrace item level RFID tagging, and that includes Serge Blanco, which operates 400 retail outlets in France and approximately 20 stores in 15 other countries including Ireland, Dubai, Russia and Italy.

Designed in France and produced offshore, Serge Blanco moves more than one million items of apparel through the supply chain each year to its own retail stores and select department stores. The company turned to RFID in 2009 to curtail frequent bottlenecks, a “lack of process speed and lack of reliability, and stock rotations that were too long and time per article too high,” says Mathieu Pradier, the company’s vice president of operations

GS1 recently shared a case study with RFID 24-7 that was produced for Apparel Magazine. Here is an excerpt from the case study:

Before the solution was deployed, it took a team of 10 to receive 25,000 items on a busy day. Now, just two workers can receive 35,000 items.

“Our objective was to really optimize the distribution channel, and this has been achieved,” says Pradier. “We have reduced entry and exit times for goods by almost tenfold, which means that we are now ready for business growth of 40 percent to 50 percent. … RFID is not a passing fashion. It’s a real solution.”

Retail push into item level tagging will benefit shoppers in the long run

Sunday, February 13th, 2011

02/07/11 | John R. Johnson | email

For those that missed last week’s issue of RFID 24-7, we have posted the lead story here.

Retailers stand to benefit greatly from item level tagging. By affixing RFID tags to apparel goods, footwear and other products with complicated SKU mixes, retailers like Walmart and Macy’s gain from increased sales and customer loyalty by having products on store shelves when customers need them.

However, at the end of the day retailers hope it is the customer that gains the ultimate benefit and will drive the adoption of item level RFID tagging in retail. As customers become busier and more connected through mobile devices, they will embrace retailers who have inventory where they want it, when they want it, and priced how they want it.

“This is now literally a customer-centric initiative,” says Peter Longo, president of logistics and operations for Macy’s. “It’s not a jazzy technology initiative that consultants are working on. It’s now a customer mandate. The [retailers] that get this and move on it quickly will be the organizations that consumers reward. Those that are laggards or disbelievers will be the organizations that the consumer will punish.”

Not long after listening to Longo speak at the NRF show in New York, I heard a funny story about a friend who entered an Old Navy store looking for an uncommon size of jeans. “You might find them online, but not here in the store,” the store associate adamantly replied. Well, guess what. Sitting on a store shelf was the exact size the patron was looking for. Had she not opted to shop the store anyway, some other retailer would have received credit for that sale.

That type of occurrence, and many more just like it, happen every day at retail outlets with poor visibility into their inventory. In fact, most store inventories are only 65 percent correct.

“The status of where we are in the consumer space today and the demands of the customer for efficiency and accuracy doesn’t tolerate 30 percent inaccuracy with our inventory,” says Longo.

Beyond inventory accuracy, retailers that deploy RFID will eventually gain from a reduction in labor. While Walmart isn’t on record as saying so, the end goal of many retailers is automated checkout areas that utilize RFID. Item level tagging allows a stack of goods to be scanned with a single swipe of a reader, rather than scanning the bar code of each individual item. Although some may mourn the loss of the “personal touch” at the checkout area, what shopper really wants to stand in line for 10 minutes to purchase goods when a swipe of a mobile device or a customer loyalty card will do the trick instead?

“Last year we spent a lot of time looking at retailer benefits through the studies coming out of the University of Arkansas,” says Sue Hutchinson, director of industry adoption at EPCglobal. “But every time we put pen to paper, we kept being pushed back by retailers and vendors saying lets look first and foremost at the value to consumers. This is no longer something that is retailer or industry-centric. The consumer is pushing for this. At the end of the day, a lot of growth is coming from consumer demand to have products that they want in the right stores at the right time.”

Eventually, RFID will allow retailers to interact with shopper’s mobile devices or loyalty cards, alerting them or promotions and special pricing. Shoppers, in turn, will be able to do comparative shopping inside the store.

RFID also greatly simplifies warranty and returns issues. It will benefit the retailer by eliminating much of the existing return fraud, and consumers will gain by having better service when they do return goods.

Walmart began the push toward item level tagging last summer, announcing that it would tag all men’s jeans and basics at its 3,000-plus stores that carry apparel. The retailer is expected to increase the categories it tags sometime this year. Elsewhere, Macy’s is taking the lessons it learned at its Manhattan Bloomingdales RFID initiative and expanding item level tagging to seven Macy’s units. JC Penney is expected to deploy RFID in 30 stores this year, with 20 more on tap for 2012.

Of course, the consumer centric angle for RFID adoption doesn’t stop at the retail cash register. Almost every RFID application has a consumer gain attached, and many are designed exclusively with the consumer in mind, such as RFID wrist bands for amusement parks, and RFID solutions designed to assure safety of students on school busses. The EpicMix ski pass is being embraced by skiers at Vail Resorts, who can take information about the runs they ski and post it on Facebook. Skiers can also track others in their group and discover their location on the mountain.

RFID also has huge consumer ramifications in the healthcare and medical sectors. RFID can assure that patients receive authentic drugs and can guarantee that medical devices are ready when needed during surgical procedures. In these cases, RFID isn’t about easier transactions or customer loyalty, but about saving lives.

Footwear & apparel sectors will combine to use more than 750 million item level tags in 2011

Monday, February 7th, 2011

Item-level tagging continues to accelerate in the apparel and footwear markets, with those industries now making up an increased share of the total world market for RFID tags. According to a study just released by ABI Research, more than 750 million RFID tags will be used in global apparel markets in 2011.

(Click here to view RFID 24-7’s previous coverage on item level apparel tagging.)

“RFID systems allow apparel retailers to get a better handle on inventory, reducing costs and preventing out of stock situations that result in loss of sales,” says ABI Research principal analyst Bill Arnold. “The growth in retail item-level tagging is huge, both in shipments and in total spending. The average growth rate is close to 60 percent for the next three years. In fact, the number of tags that will be used for retail ILT in apparel alone is likely to exceed the total number consumed over the past five years for all RFID markets combined.”

Major retailers such as Macy’s, JC Penney, and Walmart are leading the charge to make RFID systems commonplace in the retail environment.

Arnold says that the typical ROI times for such RFID deployments are only three to six months, representing a very compelling business case for retailers. However, Arnold says that the global economy is still causing delays in deployments. And a major supplier of RFID systems to the apparel sector recently told RFID 24-7 that a large retailer recently pushed back its deployment schedule by six months.

“The state of the global economy is still creating serious delays in getting money allocated to retail RFID,” says Arnold. “Executives are still very uneasy about business conditions and availability of credit, and while ILT systems are technically scalable right down to small businesses, credit will be the big limiting factor for smaller independent stores.”

A related use of RFID in retail is in EAS (Electronic Article Surveillance) systems: loss prevention tags containing only one bit of data. This segment is led by Checkpoint and Tyco Retail Solutions.

Research director Michael Liard adds, “Retail adoption of RFID at the item level parallels the course barcodes took about 30 years ago. The main difference this time is that retail department stores, not grocers, are leading the charge.”

ABI Research’s new study The Retail Apparel RFID Item-Level Tagging Market” provides current analysis and a five-year forecast of UHF adoption at the item-level in the retail apparel market. It discusses market drivers and inhibitors, along with a summary of the key RFID solution providers and product suppliers.

Here’s why apparel and footwear retailers represent such a sweet spot for item level RFID

Monday, November 15th, 2010

I dropped $90 on a new pair of Timberland boots for my 15-year-old son over the weekend. Ouch. And although I got over the expenditure quick enough, what sticks in my mind is the amount of time it took the Foot Locker sales associate to find the product in the back room.

The rep actually said “be back in a few minutes” when he left to locate the pair of size 13s. So I timed him. And he returned in just under five minutes. Aside from the unacceptable inconvenience of making a customer wait that long (I’d have had to wait another five minutes if that size didn’t fit), just imagine how many more shoes Foot Locker could sell if those lost minutes in the back room were converted to productive customer-facing sales time.

Enter item level RFID. My Foot Locker experience is a classic example of how the footwear and apparel sectors represent such a sweet spot for item level RFID technology. Had an RFID tag been attached to that pair of Timberland boots, my wait time likely would have been 30 seconds or less. I’d have left the store happier, and the sales associate would be on to the next customer.

So lets just take a guess that the average customer sends the sales rep back one more time to try on another size. So that’s about eight minutes spent in the back room on each customer.  If a store sees 10 customers an hour, that equates to over 60 minutes an hour of potential sales time per hour spent in the back room by sales associates. Consider that Foot Locker runs nearly 1,200 stores in the North America, and I’ve got to think the customer experience could be greatly improved. And just think about the significant sales lift that Foot Locker could achieve from the product visibility provided by item-level tagging.

I’m not sure if Foot Locker is a member of the American Apparel & Footwear Association, but the AAFA is part of the RFID Item Level Initiative that was unveiled earlier this month by retailers, manufacturer and trade associations. The group’s goal is to accelerate the pace at which item level tagging is rolled out at retail outlets. Walmart, for example, is already tagging men’s underwear and jeans, and is expected to expand on that rollout next year. And industry sources say that JC Penney has mandated that certain SKUs of footwear products must carry item level RFID tags by March 2011.

So the retail industry gets it. I’m looking forward to the day when those trips to the stock room are eliminated altogether by the use of RFID. And it’ll be even better when I can skip the line at the checkout and simply swipe the shoe box with my RFID or NFC-enabled smart phone and be on my way.

Re-capping a banner week for RFID technology; Item Level RFID Initiative grabs the spotlight

Monday, November 8th, 2010

Last week saw a series of high-impact events for the RFID industry. The week began with the unveiling of the Item Level RFID Initiative, an alliance between major retailers, manufacturers and associations. The goal is to start moving together as a group toward major item-level deployments in the retail sector.

The alliance includes Wal-Mart, Kohls, Macy’s, JC Penney, Dillards and others, and should provide item-level tagging with the shot in the arm it needs to become ubiquitous in retail sooner than later. (See RFID 24-7’s coverage of the announcement here.)

The announcement was the talk of the town in Chicago, where Pack Expo and the AIM Expo were held. The AIM event was well organized, well received by exhibitors, and showed promise for the future. It’s an event the auto-ID industry needs.  As AIM broke, RFID vendor Mojix announced it has completed successful tests of its STAR system at German retailer METRO. Breakthrough levels of read rate performance for passive RFID tags were achieved across multiple use cases including RFID-tagged fast moving goods and item-level tagged apparel.

And let’s not forget the incredibly cool use case that Vail Resorts has built for RFID, combined with social media tools. The technology debuted last week.

The fun doesn’t stop there. In what is usually a slow month leading up to Thanksgiving, RFID 24-7 will report on major news out of the high-memory RFID sector tomorrow. Another major announcement is on tap for next week, this one regarding a ground-breaking solution for the perishable foods industry. Stay tuned!

WSJ: Avery Dennison RFID revenue headed for $1B

Thursday, September 23rd, 2010

RFID continues to see increased exposure, most recently in the Wall Street Journal, which just published a very revealing piece on Avery Dennison’s promising RFID business, which is being driven by the phenomenal growth of retail apparel tagging.

The article pegs Avery’s RFID revenue is estimated at $50 million this year, possibly increasing to $150 million in 2011. Some analysts predict the company’s RFID revenue will eventually reach $500 million to $1 billion a year.

Avery’s net sales last year were $5.95 billion.

Click here to read the full Wall Street Journal article.