"That 900-square-foot store [in Hong Kong] is now making over $8 million dollars, and they figure a million of that is purely due to RFID..."
Jonathan Aitken, lululemon athletica's program director for RFID, provided a keynote address at RFID Journal LIVE! 2016. During that presentation, he discussed his company's rollout of radio frequency identification to its 350 stores. In the middle of the rollout, he said, lululemon opened a new store at a high-end mall in Hong Kong, and wound up installing the RFID system there as well.
The store estimates that it can achieve an additional $1 million in sales due to an offsite location that performs real-time stock replenishment. Without RFID, the company would lack solid information about what needs to be restocked, nor would it be able to replenish those items quickly and effectively.
Aitken told the audience at LIVE! that it is difficult to quantify RFID's benefits, and that no one wants to say specifically how much additional revenue the company now takes in due to its RFID deployment. However, he noted, revenue has increased chain-wide due to the technology's use, and the labor required to conduct inventory counts and replenish stock has been reduced.
Lululemon has been carefully monitoring inventory accuracy, which has risen from about 60 percent to 98 percent since the RFID system's introduction. The athletic apparel company is also tracking the number of items that go out of stock—those not on the store floor but available in the back room.
"Because we have RFID, we know what's in the back of the store and what's in the front of the store," Aitkin said. "Now, you hit a button and you can see how many items are in the back that are not in the front of the store. Before implementing RFID, we estimated that, on average, we had about 250 items that were not on the floor. Today, it's less than 50 in Canada and less than 30 in the United States."
RFID is clearly delivering value to chains like lululemon athletica. Your company can achieve similar benefits. Learn how by attending RFID in Retail and Apparel 2017.
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