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FASHION BENEFITS FROM NORDIC ID EXPERIENCE

At their core, all retail processes are the same: people shop, compare, and purchase. But that’s where the similarities end.

At their core, all retail processes are the same: people shop, compare, and purchase. But  that's where the similarities end. You don't present a coupon to get three Volvos for the  price of two, nor do you look for a certain shape and shade of apple in a size 44.

When people speak of 'retail', they lump together dozens of types of businesses with very different ways of doing things. Customer behaviour also changes, depending on location. When grocery shoppers find that a product is out of stock, they move on. In fashion retail, customers will seek out a salesperson to confirm that the product isn't in fact available. The converse is also true. When is the last time that someone asked you if you needed help finding anything in a grocery store? Yet that is the norm in fashion retail.

FASHION RESEMBLES AUTOMOTIVE

Retail typically refers to fast-moving consumer goods (FMCG), a broad subcategory that encompasses groceries, electronics, convenience, less expensive household goods and more. Unlike high-end fashion retail, FMCGs do not require in-depth product knowledge, nor are salespeople expected to know what product to suggest if the item a customer is looking for is out of stock. Keeping all products on the shelves at all times is important to guarantee the steady, razor-thin profit margin that most FMCG retailers count on, but the time it takes to design a product and stock it on the shelf is not.

The issues that luxury clothing retailers experience are more like those of the automotive industry than those of FMCG industries such as grocery. Product knowledge in both instances is king, as is time to market: the speed with which new products go from design to production and sale. Counterfeiting is also an issue. Just as you can buy a fake Louis Vuitton handbag in certain parts of the world, you can also buy grey market parts for your Toyota just about anywhere.

High staff turnover, a fact of life in FMCG businesses, is something that retailers struggle with. Product knowledge is low and consequently the advice that salespeople can give customers is also lacking in depth. This isn't so much of an issue with luxury goods, as turnover tends to be lower, but it is with stores like Zara and H&M. If an H&M customer is looking for a specific dress that is out of stock or discontinued, for example, a salesperson might not know enough to suggest a comparable product. This is where technologies like RFID and barcode come into play.

HIGH-TECH, NO-TECH

For a long time the fashion industry wasn't high-tech. It wasn't even low-tech. It was no-tech. But the players in the industry that have gotten into technology are making hay with it. When the Spice Girls were at the height of their popularity in the early 2000s, Gerri Halliwell appeared on stage wearing iconic platform boots with a Union Jack design. One UK-wide chain selling those same boots sold out very quickly. But staff dealing with customer demand were able to consult their store point of sale (POS) system, which suggested a substitute: a platform boot with an American flag design. Those boots sold briskly, as well.

In another case, British retail giant Tesco came out with a copy of the dress that future royal Kate Middleton wore at her engagement in 2010. At £25, the dress sold out within one hour of hitting the shelves. The retailer could have done a brisk business in similar dresses, had Tesco provided staff with handheld devices and configured them to suggest a substitute, but alas-they didn't have such a system in place. Few retailers do. Yet if you visit their websites, you will see major fashion retailers suggesting that 'you might also be interested in this' and 'people that bought this also liked that' and so on. The intelligence exists; it's just not passed onto handsets and POS systems.

Consider this scenario. Footwear retailers don't put every size of shoe out on display. If a salesperson disappears to a poorly organized stockroom in search of the shoe you want to try on, she might be gone a long time. If you stick around long enough to find out that she doesn't have the shoe in your size, how likely are you to keep shopping and chance another long wait ending in disappointment?

The ideal scenario would have a salesperson reading an RFID tag with a handheld device. They would discover that there is one pair left of the shoes you want in your size and colour. The shoes are not in the stockroom, however; they have just been tried on by another customer and are waiting to go back into the stockroom, so they should be over…there they are!

FROM BARCODE TO RFID: A BIG JUMP

The technological forerunners of fashion retail have long ago proven the return on their investment in barcode scanners in terms of time saved and dollars earned. They're now making the jump to RFID technology. Whereas a barcode scanner will tell you that the pair of jeans you took out of a box to scan are women's Levi's, an RFID unit will tell you that inside the sealed box at your feet are 12 pairs of women's relaxed fit faded indigo Levi's jeans, size 10 and 10 pairs in a size 8. It can also tell you, if you wanted to write such details onto your tags, how long those jeans took at each stop between the manufacturer and your store, what route they took and the ambient temperature all along the way. With RFID you can read a pallet of mixed goods delivered to your stockroom and have an instant record of the sizes and colours of the eight thousand new items you have in stock.

FINDING THE FAKES

RFID also helps with counterfeiting. Every major brand, from Adidas to Gucci, wants you to buy their product and not a knock-off made on the other side of the world. They also want to keep their manufacturers from running off with an extra 1,000 pairs of sneakers in the dead of night and clandestinely shipping them abroad. How do you guard against these things? Before RFID, protecting your brand's good reputation required armies of lawyers and teams of investigators. But with RFID it's very simple. Say, for example, you order 1,000 items to be manufactured. You send your manufacturer care labels to attach to those 1,000 items. These labels are made with a combination of RFID and secondary information that makes tags easy for you to validate, but impossible for others to duplicate. At point of sale or anywhere along the way, you can use this tag to prove that the given items are the real thing.

EFFICIENCY IN ACTION: GERRY WEBER

There are many more processes particular to fashion retail that barcode and RFID help with. Dressing room data, better item security, price markdowns and more. But RFID also just plain improves efficiency. By a whole lot. Germany-based fashion retailer Gerry Weber, for example, is the first in the world to implement complete RFID integration throughout the supply chain. Here are some results:

LOWER SHRINKAGE, HIGHER TRANSPARENCY

All wholesale orders headed for other retailers are RFID-scanned after being boxed. This reconciliation with the manifest has reduced discrepancies in customer orders to zero. Total capture of delivery information has also resulted in very low shrinkage, thanks to high inventory transparency.

FASTER GOODS IN

With RFID, store employees scan each box with a handset, unpack it and get the inventory out on the floor instead of scanning individual barcodes into the store's inventory management system.

MORE SALES

Better data quality results in having the right inventory on the floor. In addition to daily sales-based replenishment, Gerry Weber staff performs storewide inventory checks twice weekly, replenishing a missing size or colour as needed, reducing out of stock situations to less than 1%.

LOWER SECURITY COSTS

Gerry Weber proved that replacing conventional radio frequency-based electronic article surveillance (EAS) system with RFID costs less and improves aesthetics. In fact, eliminating EAS systems alone has paid for Gerry Weber's entire RFID integration with retail ERP, wholesale logistics and till systems.

Gerry Weber went all the way with RFID and achieved stellar results. But while increasing precision and saving time were important goals for them, they also knew the value of putting employee focus back on the customer. If a handheld electronic device helps staff to do a better job of serving customer needs, so much the better.

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