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Men's clothing company Perry Ellis International took a radio frequency identification (RFID) technology-based solution live at 40 stores across the United States this spring, with the goal of providing inventory visibility at those sites. The solution enables the retailer to ensure better on-shelf visibility and faster replenishment when goods are sold. The rollout consists of handheld UHF RFID readers used by store employees to capture merchandise tags reads, as well as fixed readers at the point of sale (POS). The solution leverages integration and software from California-based technology firm Mojix.
Following extensive research and a small-scale rollout of fixed, real-time-locating RFID infrastructure, the company opted to deploy the passive RFID solution across most of its stores. That comes as a result of Perry Ellis evaluating the cost versus benefits of overhead antennas that delivered real-time location data but would be too costly to deploy at each site, according to Sandeep Baghel, the company's VP of information systems.
Perry Ellis serves as a retailer and a wholesaler, so its products are sold at its own stores, as well as in department or general apparel stores.
With the rollout, Perry Ellis measured the RFID tag impact on inventory accuracy, and the company found that it increased its accuracy from 89 percent inventory before the technology was deployed to its current level of approximately 97 percent. The sportswear fashion company operates 59 stores in the United States and eight in the United Kingdom, which sell not only clothing but also fragrances, watches and footwear.
The company has been on a decade-long journey with the technology, Baghel says, conducting proofs-of-concept and testing RFID tags on products, as well as reader hardware, to determine how it could improve inventory visibility. As a result, he states, "We found that there really is an ROI [return on investment] based on having RFID at the stores." By around December 2021, the company had 12 stores converted, with overhead RFID reader antennas in the ceilings.
The installation enabled store management to view the location of every item on the sales floor or in the back room, without requiring sales personnel to conduct handheld-based RFID tag scanning. Having antennas overhead reading tag IDs helped it to gain visibility into product location and status, Baghel reports, without the need for human-based inventory counts, by automatically scanning all tags on a sales floor at prescribed times each day. However, he adds, rolling out that solution across all of the stores was cost-prohibitive, since the infrastructure costs per store are high.
Deploying Handheld Readers for Inventory Counts
To save expenses, Perry Ellis chose to have store personnel scan items via handheld readers. The company worked with Mojix on a compromise, and the resulting solution consists of Zebra Technologies' RFD8500 handhelds. The deployment required some waiting due to supply chain shortages, but once the readers arrived, the company deployed the solution across its stores, taking the technology live by early April.
To enable the unique identification of every product, goods are being tagged at the point of manufacture by Perry Ellis's brand manufacturers, as well as by third-party providers. As tagged items are received, employees read their tags to update the store's inventory data. Mojix provides its Retail Solution, along with its Retail Mobile Application, to automate receiving, inventory, replenishment, point-of-sale and picking processes, says Patti Blessing, the company's North American sales director. The collected tag IDs are stored in the software, thereby updating the inventory count for those products.
Sandeep Baghel
As products are moved from the store's back room to the sales floor, their tags are again read to indicate in the software that those goods are now on display for customers. Since the system was taken live, employees have been conducting daily inventory counts with their handheld readers. That typically requires 15 to 30 minutes to accomplish, usually before a store opens at around 9:30 AM. The workers use the Mobile Application to scan tags while walking among the merchandise with the reader, and the system forwards the inventory count to the company's management software.
A desktop RFID reader is built into the POS system. When customers select products to buy, they can take those items to the sales register and place them on the counter. The RFID reader will capture those product tag ID numbers, thus updating the status of those items in Mojix's software, which came with an application programming interface for integration with Perry Ellis's own inventory-management software.
The software changes the status of each product to "sold." If an item is returned, and if its tag is still attached, employees can use a store's RFID reader to scan that tag back into the inventory system, then put the product back out to the sales floor. If the RFID tag has been removed, workers must associate a new tag with that item. Perry Ellis's stores have rolls of UHF RFID tags onsite, Baghel explains, which can be read and associated with products that need to be tagged.
In addition, the technology is being used to accomplish omnichannel sales. For instance, if an online customer purchases goods, Perry Ellis's software can identify a store from which those products can be shipped. Employees can then use a handheld reader to locate those products, read the items' tags are they are packed for shipping, and thereby update those goods as sold.
Finding Goods with Geiger Counter-Style Reading
With the technology tracking inventory data, Perry Ellis reports, the stores can now ensure more accurate and faster replenishment. Every morning, the company runs a replenishment report based on data in the inventory-management software. All items that have been sold are listed for replenishment, and store associates place their orders.
If any goods are needed for omnichannel sales, or if customers request them, workers can use the handheld readers. They can simply input details regarding the products they seek, then the reader's Geiger counter feature will help them locate those goods as they walk throughout the store. The device will start beeping louder and more frequently as the reader comes closer to each detected item's tag.
Patti Blessing
Sales associates have indicated the technology makes their job easier, Baghel says. In the long term, the company intends to reduce the frequency of inventory counts to once weekly rather than daily, and the tags will provide benefits as well to retailers that sell products to Perry Ellis. The company serves as both a retailer and a wholesaler, so its products are sold at its own stores but also in department or general apparel stores throughout the country. Some of these retailers, such as Macy's, already have RFID tagging requirements for the merchandise they sell.
"Our wholesale customers were demanding RFID," Baghel explains, and the deployment of RFID tags helps the brand to meet those requirements. Perry Ellis opted to tag all of its products at the source, with the exception of some small items, such as underwear and socks. It also sells products at its stores from third-party vendors, which tag their own products. Those tagged products are not being interrogated an Perry Ellis's distribution centers, Baghel notes.
The company is now testing the technology's use at these warehouse sites. "We are just in the initial phase of fact-finding," Baghel states. What's more, Perry Ellis is currently exploring the possibility of integrating RFID readers at the point of exit, in order to capture the tags of unpurchased items leaving the store. However, the retailer is still using standard magnetics-based electronic article surveillance systems at its doorways.
So far, Perry Ellis reports, the system has reduced out-of-stock events, improved replenishments and ensured fast omnichannel sales response. At present, the company experiences a 9 to 10 percent cancellation rate from omnichannel sales from a specific store, based on a lack of inventory. For an average retailer, that percentage is fairly low, Baghel notes, though with RFID, the company hopes to further reduce that rate to 4 to 5 percent or less.
Key Takeaways:
- By selecting a handheld RFID reading model, Perry Ellis has developed a solution that it has since expanded to 40 of its stores.
- The company has increased its inventory accuracy to about 95 percent, which has improved on-shelf availability, boosted sales and reduced omnichannel sales cancellations.
