This interview presents a retailer's view on RFID adoption. We interviewed Kris Doane who used to run the RFID department at American Apparel until October 2012. Since then, he has been working as an independent RFID consultant in his company Arden Data.
The interview aimed at talking about RFID at American Apparel in
general and how he perceived the use of RFID growing at American
Apparel. American Apparel is a vertically integrated apparel
retailer (manufactures a vast majority of the items themselves),
which means tight close loop logistics.
INITIAL PUSH FOR RFID
The whole concept of RFID was introduced to the company by
leadership. There was a challenge to have the right items on the
shop floor. The actual RFID project started with in-store
replenishment processes - transferring items from the backroom to
the front of the store." This is a contrast to many other retailers
who choose RFID to achieve visibility on item-level, all the way
from manufacturing or DC's (distribution center) to the shop
Before RFID, American Apparel had the information that the
products were in the store, but not whether they were
physically on the sales floor or not. American Apparel usually
displays one of each size and color of a certain style, but without
the right technology, keeping up with that promise was impossible.
If a black S-size T-shirt got sold, it would probably take
some time before a new one would emerge on the sales floor, and
until then, that T-shirt is unsold in the backroom. The stores
were forced to use a so called "perfect fill process", which
meant matching and comparing items to what should be on the sales
floor, 2-3 times a week after opening hours.. These processes took
4-5 hours with 4-6 employees. Another problem was stock
accuracy. The shrinkage couldn't be monitored, people often count
wrong and similar items got mixed up causing inaccuracies in the
stock. New business processes got developed but it soon became
evident that what was needed was technology that insured that the
right items were found on the sales floor. Some people have a nack
to seeing instantly what is missing on the sales floor, but that is
just something you cannot train people to do. American Apparel
needed to solve the issue on how to replenish quickly and
efficiently. The items missing on the shop floor would not get
FROM THE POINT OF VIEW OF A RETAILER: WHAT'S
THE EXCITEMENT OF RFID?
RFID not only solves technical issues, it also enables improved
personnel management. It allows you to distribute talent to all
your stores. The right amount of staff members in the right places
doing more pleasant and challenging work tasks. Also, when the
tedious counting and other repetitive tasks are off the menu, the
workers on the sales floor can concentrate on sales and less
backroom workers are needed to care for stock accuracy. Kris
also mentioned that he feels that no person can accurately manage
the inventory without RFID. Even with barcode applications it is
only best guessing, not to mention with the pen-and-paper
method. RFID provides information for the in-store store
manager, stock manager or anyone in charge of managing inventory
and the stock accuracy and movement of items from in- and out of
stores. RFID is a tool for drilling down to the fine level
information in order to reach better event stock accuracy
percentages that ensure the right items are on the right place in
the right shop at the right time, leading to increased sales. Kris
tells about an Inventory Manager (stock manager) in the UK that was
amazed of the fine level information he got with RFID and
understood how to use it for his advantage. Trying to manage
your stock without RFID is just pushing your product around without
IMPACT ON OPERATIONS
The high nineties accuracy is reality today but before RFID at
American Apparel, the accuracy used to be "as good as possible"
without any real knowledge of the exact numeric values of the
items. Kris claims that for any retailer not using RFID, the actual
stock accuracy figures are just best guesses. RFID also
prevents items from being in locations where they shouldn't be or
are not needed, Now they are exactly where they get sold the
fastest. This can mean replacements in-store or between stores.
With RFID decisions, on the basis of the inventory, to perform
DC/manufacturer replenishments are educated and in the stores
everything that should be on the shop floor, is there.
Inter-store logistics is more efficient and there are no more
- RFID reduces repetitive tasks and frees up staff to do
- Misplaced items aren't a big problem anymore.
- Out-of-stock situations are greatly diminished.
These together ensure improved customer services.
- RFID enables omni-channel sales.
- RFID offers the retailer the ability to sell items from online
and to pick these items from store level if not on warehouses.
- RFID gives visibility to the full estate of inventory spread
across every single store. This information is trustworthy, not
EFFECTS ON PERSONNEL AND STORE LEVEL
In Europe there is a growing tendency of retail employees being
fairly young and in-experienced. Furthermore, we use a lot of
temporary staff. Kris states that the situation is similar with
American Apparel and explains how RFID affect this.
- American Apparel has always been "fashion forward" and younger
employees represent the brand.
- 10 - 15 years' work experience in retail doesn't mean that the
inventory problems get fixed. It is still just counting and human
errors in counting do not get reduced even with years of
experience. Reducing counting errors is a job for RFID.
- There are all levels of retail work experience within the
company. RFID levels the ability in performing stock take between a
mediocre worker and really good employee; they perform just as
well. This means that the really good employee can now be freed up
to do more sales and other more responsible tasks.
- RFID is easy to learn and it allows even a beginner to be
responsible of running a shop's stock efficiently.
- In New York City: A new person got hired on a Thursday. He was
taught to use RFID and on Saturday the new employee was already
filling in the stock alone and on the3rd day after the training he
ran the stock room by himself.
- In another store the Stock Coordinator suddenly lost a
significant staff member in stock control and he didn't get
qualified replacement, but thanks to RFID he was able to run the
operations with two temporary staff members.
Usually the training of such staff is not easy, especially in
the very beginning of an RFID adoption. How do you manage that?
- Take some time to think about how to train your staff. RFID is
a new way of thinking about inventory. You need to prepare properly
for the training.
- Resistance comes around. You've been doing a process in a
certain way and now it changes. You have to be prepared to answer
to the resistance.
- Change management is a key issue. It needs to be handled well.
Not just for training. Rethink your core business processes, such
as interaction between stores, managers, and employees both locally
and at a global level. These interactions, based on trustworthy
inventory information, will change all your processes.
- Be prepared for a lot of one-on-one training in-store. Let
experienced employees train the new employees in stores. Involving
your own staff in the training builds trust for the new way of
- Build a training system. In new districts American Apparel used
key trainers that would train the store trainers, which in their
turn would train the staff in the stores.
- Training needs to be continuous, as the staff turnover is a
reality. The training program also needs to be updated as the RFID
system will evolve in time.
CHANGES IN PROCESSES AND EQUIPMENT - BEFORE
AND AFTER RFID
American Apparel used to have more manual processes, mainly in
counting, and of course some barcode operations. A barcode system
was used for receiving boxes and for POS (Point of Sales)
operations. There was no individual scanning of the items on the
sales floor. RFID scanning of each unique item is fast and requires
only a little manual labor and therefore it got introduced to the
store front to be done 2 - 3 times a week.The biggest change,
equipment wise, was the replacement of the POS system. For the
store front and the backroom the hardware changes were more about
adding readers and changing the processes in instead of changing
HOW DOES STAFF REACT TO NEW EQUIPMENT?
It makes no difference whether you've been working in-store for
long or just started, the learning curve for RFID is the same. It
is due to the new business processes. When you hand your
staff a reader and ask them to trust that it reads correctly, it
will be hard for some staff members. They will rise up to block
this, even when they've been proven wrong. And therefore, you are
bound to lose some staff. You will, on the other hand, witness
some amazing changes in your staff's attitude as well. E.g. staff
members who have been blockers against RFID for years and done
nothing but point out problems and refuse to use RFID properly.
Suddenly, they have turned into the biggest RFID supporters.
Resistance towards change and problems in adapting to new
ways to work and new processes is just human nature and you have to
deal with it patiently and with a plan. You will need an approach
to manage change.
RESOLVING THE ISSUES
To ensure as smooth a project adoption as possible, you have to
make sure of a few things.
- Engage the employees as early as possible in the project
- Open dialog, give the employees a voice in the process
- Give the employees a feedback possibility
- Ensure that venting their issues and needs is possible for the
- Be adaptive to problems and challenges along the project
Kris Doane can be contacted through
his company Arden Data.
TO GO RFID OR NOT?WHAT ADVICE WOULD YOU GIVE
TO ALL WHO CONSIDER RFID IN THE FASHION INDUSTRY?
Kris says that he cannot imagine anyone in this industry, who
depends on keeping track of items, choosing not to use RFID.
Objectively, there just is no other way to have a real sense of
trust in the fact that you truly have a certain item or not. If it
is important for your business to keep track of your items, go
Kris feels that the price of the tag is no longer an issue. It
is just nothing to care about. We have already addressed this same
topic in an earlier blog post, "The magic 5 cents per tag" and came to the
same conclusion; the tag price is no longer an issue for the
apparel fashion industry. The technology is ready and the standards
exist. In the beginning of the project some store staff
members felt that RFID was failing all the time, which clearly were
an early adopter problem and not a valid argument against RFID
anymore. RFID helps spot mistakes sooner and they can be fixed
in time; this is not the case with manual labor.The data losses can
be fixed easily and fast simply with a new quick scan.
As a conclusion Kris Doane states:"Even a bad RFID
implementation will still give you such great benefits compared to
not having it. You will not be making decisions based on GUESSES
anymore". And Kris stands behind this claim.
American Apparel RFID success story.
Introduction to the interview series
3 interviews: RFID the perspective of
1-ON-1 with Owe Quide: RFID from an RFID
consultant's point of view
Philip Calderbank: RFID from an RFID tag vendor's point of
1-ON-1 with Jorma Lalla: RFID from ahardware vendor
point of view
1-ON-2 with Matjaz Novak and Tom Vieweger: RFID
from a software vendor point of view