While technology constantly evolves, certain aspects of it remain constant, such as the positive impacts it brings to businesses and its ability to simplify work processes.

In the highly competitive retail apparel industry, technology plays a critical role. Dealing with a perishable commodity like fashion, retailers must ensure they have the right quantity of products in stock. Overordering can lead to stale inventory and losses. Unlike fixed-position goods, apparel items constantly move between shelves and trial rooms. Even when an item is in stock, it might not be on the shelf, increasing the chances of stock never being cleared and resulting in losses. This highlights the importance of maintaining accurate inventory records to ensure that the right products are available to customers when they want them.

According to a report from the Harvard Business School, approximately eight percent of all retail items are out of stock at any given time, costing the top 100 retailers around $69 billion annually. The fact that items in inventory are not always visible can lead to up to 65 percent inaccurate inventory counting, making accurate ordering a challenging task. High-value merchandise that is readily accessible to customers also increases the risk of theft.

RFID (Radio-Frequency Identification) technology has come to the rescue of apparel retail stores in this scenario. RFID is a tracking technology used to discover and authenticate tags applied to products. An RFID device typically consists of an antenna and a microchip with a transceiver and transponder, known as the RFID tag. These tags are designed to receive and respond to signals from a transceiver, allowing them to be read from a distance.

RFID functions similarly to barcodes or magnetic strips found on debit or credit cards, providing a unique identifier for each tagged object. However, RFID has advantages over barcodes, as it doesn't require precise placement on a scanner. RFID devices can work even when placed a few feet away from the scanner. This feature simplifies the shopping experience, as a bag containing purchased items can be placed on a scanner, which queries all the RFID devices and immediately totals the purchases.

RFID technology has been around for more than five decades, but its implication in the retail apparel stores is comparatively novel. The reason behind delay in use of this technical advancement is lack of standards in the industry.


The benefits of RFID in retail apparel industry are umpteen. In terms of numbers, RFID application has reduced out-of-stocks by 50 percent, thus it has resulted in an increase in customer satisfaction and sales. In terms of volumes and profits, RFID has resulted in an average 15 to 20 percent reduction in restocking efforts and 90 percent reduction in labour associated with inventory counts.


The benefit of finding the right item when it is needed is the biggest advantage of the RFID technology. Industry experts believe that fashion retailers can grasp the immediate returns by moving straight to item level tagging with a customer-centric focus. RFID tags applied to individual item at the point of manufacture enable the mechanical tracking of each item from creation to purchase. Thus, the orders are easily tracked all the way through the supply chain. This also improves the order processing at the distribution level, facilitates identification of counterfeit goods inserted anywhere in the supply chain, and ensures finely detailed visibility of items in the retail store that the right item is available at the right time to increase sales and protect profitability.


RFID also significantly improves the time required to take inventory. When the records are kept manually, it not only requires a lot of time, but the chances of error increase by manifolds. An employee can easily take a complete inventory in minutes with the help of handheld RFID reader or a mobile RFID reader. This shrinks the chances of lost sales due to artificial out-of-stock situation, as the employees can know immediately how much quantity of a particular commodity is available.


As every single product in a particular shipment has a unique identifier, quality assurance and spotting any kind of product imitation are enhanced. It also improves exactness in picking and packing operations. With RFID, it is easy for the retailers to know how much stock they have of a particular product. When RFID was initially introduced, the fashion retailers realised that certain products that they were receiving were not ordered in reality. Like if a store orders fifty pieces of 32-size denim and it actually receives 30-size denim, in case of manual inventory, the staff assumes that it has received what was ordered without realising that it is over-stocked with 30-size denim and under-stocked with 32-size denim. It is difficult to employ people to confirm the receipts manually. Sometimes in such situation it is palpable for the stores to presume theft, as nobody knows the certainty behind the unavailability of the 32-size denim stock !

Earlier, when manual inventory was maintained, the total item counts were close to accurate, but minute details like the accuracy for design, sizes and colours were not actually close to reality. The manual inventory was maintained roughly. In a pile of clothes, the inventory control person would normally count only the top item, so if the size or colour was different below, an inconsistency in inventory would be created. Before RFID, apparel retail houses had 50 % inventory accuracy. Now with RFID most of the stores have achieved up to 99 % accuracy. The only reason that the accuracy isn't cent percent is due to some items being tagged incorrectly. 

 

The employee efficiency has also augmented, as today it requires approximately 45 minutes to file record of the available stock, as against to two hours prior to use of RFID. This technology also eases the security process, as the system is combined with the store's video surveillance system and automatically captures the exact time an item is moved.


With further improvement in the existing RFID technology, there are more benefits that the retail stores, as well as the customers can enjoy. There are RFID-enhanced display trays, which can tell the customers details about the complimentary items available with the selected merchandise. After the customer purchases the product and removes the price tag, the RFID is also removed.


RFID technology is a boon for the apparel retail industry, as it has brought a revolution by reducing the time taken for inventory and also by keeping a check on the problems concerning the inventory. The kind of flexibility RFID has provided to the retail business is enough to convince the apparel retail world that RFID technology is a must step in progressive direction.



References:


1.      Rfid.net

2.      Technovelgy.com