A seamless fit for a challenging market
Date: October 11, 2015
Category: Opinion piece
Author: Andy Robson
Retail as a whole is adapting to some significant changes. We’ve already spoken about how the digital environment is changing the way consumers live, work and shop, and how managing your inventory is key to meeting these challenges.
Adding to this, since 2008, less than ideal economic conditions have put retailers through their paces.
With consumer confidence at a low across the board, all retailers are placed under pressure of falling or unpredictable sales. All while, materials, energy and labour are becoming more expensive driving an increase in manufacturing costs. Margins are being squeezed with discounting becoming a norm as shoppers look for that all important bargain.
Throughout this tumultuous period RFID has gained traction within the apparel sector at a greater pace than other categories – but, why?
RFID enables apparel retailers to meet these new demands and better control some more long standing challenges.
Sheer number of products
Managing an apparel inventory is particularly tricky, when you consider the number of styles, sizes and colours there are to keep track of. The average department store carries 100,000 SKUs – in comparison to a supermarket’s 25,000. This has been boosted by fast fashion which has taken the traditional 2 seasons a year and turned them into 16.
Being able to quickly update stock information on such a huge volume of individual SKUs requires staff to be able to take stock in minutes not hours – with RFID stores can count over 20,000 items per hour, instead of just 200 manually.
All of these products are brought into stores – be they online, mobile or physical – through a web of 1st, 2nd and 3rd tier suppliers that are spread across the globe. As the increase in fashion ranges per year directly corresponds to a reduction in shelf life of the average fashion product, speed to market becomes essential.
RFID allows you to machine read tags without the need to unpack and check each item. This offers retailers the opportunity to automate their supply chains. A reduction in the amount of manual handling throughout any process increases a products velocity whilst driving down costs.
Trends come and go
On top of this, trends in fashion come and go at an increasing pace. Fuelled by social media our short attention span consumers are driven towards flash, shiny new objects and micro trends. Getting a product to where it’s wanted, whilst it’s hot takes agility and an unprecedented turn of pace. And, let’s not even think about how unpredictable the British weather is!
Real-time, accurate data enables a product to be routed whilst already in the supply chain to where it is most in demand. Informing business decisions and maximising full price sales.
As stock travels through the supply chain, it all too often goes missing before reaching a paying customer. This issue is especially poignant to apparel retailers with items seen as desirable and a prime target for thieves.
With events recorded at each stage of an individual items journey through RFID, where an item disappeared in its journey can be identified. This gives a clear picture of key vanishing points, allowing for more appropriate prevention actions to be put into place.
The store experience
Fashion is full of theatre! Consumers buy into the lifestyle associated to the brand as much as they buy the product itself. In store shoppers can interact and explore products, finding the perfect item that expresses who they are and what they’re about.
To digitally enhance a store, products need to be able to talk to digital devices. The use of RFID allows retailers to immerse their shoppers in their brand and create an experience that blends the digital and physical.
The perfect fit
With the number of benefits RFID brings across the entire business, it can be easy to overlook the scale of implementing an RFID project. However, the nature of clothing and the business model for the industry abate some of the challenges other retail categories would have to contend with.
With no liquids or metals to affect the performance of the tags, it is an easy category to introduce RFID. The positioning of a tag is a relatively simple decision, care labels and swing tags offer a prime location that facilitates read accuracies of 99.9%.
Installation aside, the financials of the apparel market also offer an opening for retailers to trial the use of RFID. As the technology is coming into maturity, and achieving critical mass, this has driven down the cost of tags to a level affordable for retail use. With tags now priced around 12 pence each, apparel retains the margin to cover the implementation costs of its introduction. This offers a prime proving ground for retailers stocking multiple categories.
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