RFID Technology is Changing Inventory in the Fashion Industry

RFID technology has also become a focal point of the fashion industry in the wake of the outbreak.

Until recently, Dutch fashion brand Scotch & Soda tracked its inventory the way most fashion companies do: Employees manually inventoried items in the store once a month by scanning individual bar codes. Now, the 36-year-old company is switching all of its inventory to RFID, starting with a store in the Netherlands in August. The goal of this is to gain full visibility into its online and store inventory.

RFID technology provides an accurate view of total inventory by giving individual products unique digital identifiers, unlocking features such as shipping from stores, click-and-pick and in-store tracking. In addition, the technology is particularly useful for tracking high-value items benefiting from RFID's identity verification and tracking capabilities during express shipping.

RFID is not a new tool for the retail industry, but it has taken on new relevance in the wake of the outbreak, especially after it exposed many problems in fashion and apparel inventory management and supply chains, such as lack of visibility into correct inventory, excess stock and returns.

COVID-19 has forced many retailers to rethink their strategies and how they can enhance the online and offline shopping experience to engage customers," said Ailen Li, director of the Nedap iD cloud platform and RFID expert in the U.S. "COVID-19 has forced many retailers to rethink their strategies and how they can enhance the online and offline shopping experience to engage customers. During an epidemic, customers will place orders online. Customers are disappointed when they take the time to browse and place an order, only to find two days later that the merchant's side shows that the product is out of stock or the order has been cancelled. This experience is tantamount to a death sentence." Nedap's iD cloud software is already being used by Scotch & Soda and Ganni.

Other brands that have also launched similar RFID and NFC technology include Mango, Adidas, Nike, Ebay, AZ Factory and Alexander McQueen.

Massimo Vian, the new COO of the Prada Group, has launched a campaign to a group of graduate students in the IMLux master's program at Politecnico di Milano to develop new uses for RFID, NFC and QR codes in fashion, with 45 students currently participating in the campaign. The brand announced this spring that it will add RFID to all of its products worldwide and will use RFID with the newly formed Aura blockchain consortium.

As the largest supplier of RFID tags to the apparel industry, Uwe Hennig, director of global RFID market development for apparel and food at Avery Dennison, said, "The outbreak has taught all brand owners, retailers and manufacturers about the vulnerability of the supply chain. They don't have enough data to manage it, and consumer demand has changed."

Avery Dennison's "smart tag" business grew 9 percent in 2020, with much of the growth coming from the apparel industry. Avery Dennison's "smart tag" business is expected to grow 9% in 2020, with most of the growth coming from the apparel industry. The global RFID market is expected to grow from approximately $10.7 billion today to $17.4 billion by 2026. It is estimated that about 70 percent of retailers are interested in implementing RFID within the next year.

Joel Goodson, content marketer at Detego, says, "Smartphones made it possible to digitally connect customers, and now RFID is making digitally connected products." The company's RFID software platform is already being used by Levi's, Adidas and Reiss.

Complete Visibility

The fashion luxury e-commerce brand Yoox Net-a-Porter has also adopted RFID. the company's seven logistics centers in the Italian city of Bologna have provided RFID tagging for its e-commerce orders to check the contents of packages before they are shipped; RFID is also being used in boutiques to get a more accurate picture of what is being sold and what needs to be restocked.

RFID tags are often a more profitable option for store operations and promotions. U.S. fashion brand Ganni is using RFID to meet the demand for online orders in stores, with the goal of solving the problem of separate inventories for online and store orders, says Karolin Stjerna, Ganni's director of supply chain, which can break up overstocks and overproduction. Within two weeks of RFID implementation, inventory accuracy at one of the company's stores jumped from 93.4 percent to 99.5 percent.

Detego's Joel Goodson says that RFID's ability to improve inventory accuracy is critical as omnichannel services become the new model for the fashion industry. "Without inventory accuracy and real-time inventory visibility, retailers can't offer omnichannel services. Inventory accuracy sounds mediocre, but it doesn't tell the story of how it has changed retail."

Mango recently added RFID to its new flagship store in Barcelona, calling it a "license plate" for each item to see which garments customers try on and ultimately buy. The brand says, "This technology gives us access to very critical information that was previously only available through our online channels."

RFID in Fashion from warehouse to store

RFID readers can remotely read multiple tags at once. RFID fixed readers in stores can track products (as opposed to using handheld devices to read tags on the shop floor and in the warehouse) and can also show which areas of the store have the highest sales.

AZ Factory products also include NFC tags that, when scanned, open a special "Alber & Amigos" Web site where customers can view selfies of other customers, the products they've purchased, and more. Scotch & Soda is also linking RFID to QR codes that can be used to tell brand stories.

Significance beyond sales

Previously, RFID adoption was higher at the beginning of a product's life cycle than after it was sold, but that is changing. Permanent washable tags can be used to prevent fraud, authenticate and help with returns, rentals and resales.

For example, Dean Frew, CTO and senior vice president of RFID solutions at SML Group, which works with Nike, PVH and L Brands, says that with RFID, point-of-sale systems know exactly what has been sold and can identify if someone is trying to return an item that was never sold. In addition, Ignatius KC Lau, CEO of SML Group, adds that dual-frequency RFID inlay can replace traditional electronic item monitoring systems to trigger in-store theft alarms. Meanwhile, rental platform Caastle also uses washable RFID tags to track items flowing through its logistics centers.

RFID Tag for Fashion items

In February, resale platform Vestiaire Collective partnered with Alexander McQueen on a resale program that provides NFC tags for resale items, allowing buyers to access item information using their smartphones. Smartphones can "read" NFC tags without external hardware, but most RFID tags used in stores still require additional readers.

In June, Ebay launched a similar program that verifies handbags from brands such as Saint Laurent, Gucci, Celine and Balenciaga, and offers an NFC tag for each handbag based on its sneaker NFC program. Nike and Adidas already use NFC chips in many of their products, and when they set up buyback and recycling programs, the same chip ID verifies the product and provenance information.

NFC also allows Ebay to share information about specific shoe styles, such as their popularity and similar products," said Charis Márquez, vice president of fashion at Ebay. "Our consumers are hungry for information about athletic shoes, and we want to be a resource for that." At the same time, understanding when, where and how consumers interact with NFC will help provide "greater insight into the needs of the Ebay enthusiast community" and help brands anticipate secondary market trends.

Nedap's Ailen Li says that as more brands invest in RFID at the point of manufacture, multi-brand retailers will be able to take advantage of these benefits without investing in RFID. "While there are a variety of service providers, all RFID scanners can read all RFID tags, and retailers have become accustomed to a diversity of tag providers." A brand can already use its RFID-tagged products to communicate with retail associates and monitor inventory dynamics. For example, it can provide employees with information about what items are sold on the store's sales floor and which items are selling best.

Ailen Li adds, "Looking ahead, I see a lot of interest in the different types of experiences that RFID can provide. This year in particular, more and more retailers are in a very interesting phase of exploration."

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Post time: Oct-28-2021

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