Titled RFID Case Study – American Apparel, a video production by Avery Dennison demonstrates how the largest apparel producer in the US deployed item-level radio frequency identification (RFID) to overcome inventory accuracy and replenishment challenges at selected retail stores, while appreciably increasing sales.
American Apparel’s item-level inventory management system consists of Avery Dennison AD-222 RFID inlays; printers and tags from Avery Dennison; RFID antennas, and handheld and portable readers from Motorola; and in-store inventory tracking software.
According to Zander Livingston, American Apparel’s RFID director, the system was fully operational four months from the program’s launch and delivered a full return on investment just four months later.
In operation, the system tracks every SKU from the time it is received until it is processed at the point of sale. It also facilitates stock replenishment within minutes of a sale, and helps ensure inventory accuracy and the stocking of available product on the selling floor. Because RFID tags do not require a line of sight to be read, a whole store inventory that once required 120 hours to complete can now be accomplished in 15 hours. Notes Livingston, “I was particularly blown away by the labor time we saved.”
American Apparel is realizing solid bottom-line sales benefits with the new item-level RFID system. “The easiest [benefit] to measure is the 14% sales uplift we’ve seen at the RFID-equipped stores compared with our non-RFID stores,” Livingston reports in the video. “This is due to the fact that we have more items on display for the customer and we have improved customer service at the RFID stores.”
Livingston explains that the item-level RFID inventory management system boosts customer service by facilitating faster selling floor replenishment and greater sales associate availability. The system guides replenishment specialists to the correct areas in stockrooms, which allows them to retrieve merchandise quickly, restock it on the selling floor and attend to customer needs. As a result, service time has improved 10% to 25%.
Other key item-level RFID inventory management system metrics: The system delivers 99% visibility of store inventory and can reduce labor by up to 30% and inventory by 15%.
To view the video, click here.