EPC / RFID in high fashion in Sweden
Menswear store Taracci in the Forum Nacka shopping mall on the outskirts of Stockholm is the first retail outlet in Sweden to use RFID/EPC.
Customers only need to put their bags of goods on the counter and payment is made in a moment. But the big advantage for the store is all the time-consuming administrative work which disappears. The company's estimate is that their investment in RFID/EPC has a payback period of less than one year.
When a customer is ready to pay for an item at Taracci and places it on the counter, it is automatically scanned by an RFID reader under the counter which can read RFID tags at a distance of up to two metres. A customer buying several items gets help from the staff to pack them in a bag. The assistant only needs to press a button on the cash register screen and all items are rung up and the customer can pay. Many customers are amazed, scratch their heads and ask "how did you do that?"
"Our RFID system makes customer payments much faster than a regular cash register, but this is not the most important reason for our investment in RFID. The idea is to have everything under control in order to make the administrative work simpler and more efficient," says Mats Tornard, part-owner of Taracci.
Small production volumes
As well as the store in Forum Nacka, Taracci AB has a further three stores, one in downtown Stockholm and two in Brussels. The company has three owners: Feyo Taracci, Mats Tornard and Jens Fleischanderl, who runs the Forum Nacka store. Feyo Taracci is responsible for the collection. He has a background as a third-generation tailor. Production is mainly in Italy and Turkey. The company’s business concept is to offer customers high-quality at reasonable prices.
"Our hope is that those who wear the clothes should feel well-dressed without being dressed up," says Mats Tornard. We only get raw materials from the best suppliers and use small tailors who make jackets and shirts in small volumes. For example, Taracci's various styles of shirts are produced with a maximum of 20 items."
In the downtown store there was previously a completely mechanical manual cash register without even a barcode reader. Traditional price tags were stuck on the clothes.
RFID part of the image
"When we planned the store in Forum Nacka, we had a choice of investing in a conventional checkout system or an RFID system. One reason we chose RFID is that we didn't just want to appear innovative without clothes, but in everything else, too." The store in Forum Nacka was opened on 23 October 2008, the same day as the shopping mall opened. Subsequently the RFID/EPC system has been installed in the downtown store. The company's contractor for RFID is RFID Constructors AB.
"The checkout system itself is a standard product which has been modified to get information on article numbers and each item’s identity from the RFID reader," says Mats Tornard.
Counts 2000 items in five minutes
One of the big gains with an RFID solution is that an inventory can be taken simply and quickly and that's much more often than previously. This allows the store to rapidly solve various problems, for example update the stock balance. The risk of missing a sale because an item is out of stock is reduced. There are between 1500 and 2000 individual items in the store at any one time and these all have to be counted when doing an inventory. "Previously, in the downtown store, we counted everything manually and use pencil and paper for inventories. That way it would take a whole day to inventory this store. And there's a big risk of getting it wrong. Now an inventory takes five minutes at the most -- and the risk of error is minimal. We make a circuit of the store using a handheld computer with an RFID reader. We don't even need to see the items, they get scanned anyway.
Weekly inventories
"Our ambition is to take an infantry every week. Previously we did it once a year, which is the legal minimum." By installing RFID readers in all the shelves it would be possible to automatically take an inventory of the whole store. "But we won't be doing that in these tiny premises of 70 m². Here are handheld computer works just fine."
The RFID/EPC system also greatly improves the management of deliveries.
Reduced tied-up capital
"The stock level in the store can be reduced, which saves a good deal. The stock value in the store is between SEK 400,000 and 800,000 depending on the season. We reckoned to be able to reduce tied up capital by at least 20%. Over time we can get it down even further." The company hopes to set up a separate central warehouse for all stores. Currently stock is held at the downtown store. "We can pack a consignment and quickly scan it. This checks that it is correct. If it isn't, we can quickly fix it. It's easy to reconcile what we send with what we stand at the receiving store. "It’s also easy to send an item downtown from this store if it is needed. To make a delivery with just a single press of a button we put the item in a box and scan it with a handheld computer. The stock balance in the store is then updated. The RFID system saves us time and money at every stage." When a carton of new items arrived at the store the contents can be scanned without even opening the box. Previously every item had to be taken out of the box and counted by style, size and colour.
Surveillance thrown in
The RFID system also works as a theft alarm. "We are also installing an alarm which automatically checks if the item has been paid for. If it hasn't, the alarm sounds. Since we don't need to install a conventional surveillance system, we save a lot of money." The company estimates that its RFID/EPC investment has a payback period of less than one year. "Of course, RFID is more expensive than traditional checkout system, but the difference is not that dramatic. The advantages of RFID mean that the technology is well worth the extra cost. Tags only cost a few crowns each. As more companies start to use them they'll become even cheaper."
There are plans to extend the use of the RFID/EPC system in several ways. One example is to give the customer detailed information in the fitting room by installing an RFID reader behind the mirror which has an integrated display. "When the customer stands in front of the mirror and tries on a shirt the display will automatically show where it was made, what it's made of, what other colours are available, similar styles, and so on." This sort of functionality can also be used to analyse customer behaviour and choices. "And RFID reader in the fitting room could gather statistics on which items customers try on and which they buy. Maybe they try some which they don't buy. We also find out which clothes never make it to the fitting room. This helps us create a collection which is even more appreciated by our customers.
Helps expansion
One factor for the investment in RFID was the company's plans to continue expanding. "We hope to be able to continue opening new stores. Our intention is that all new stores will use the RFID system. This store will be the model for all our new stores so we won't have to reinvent the wheel. We use GS1 standards to make sure that we don't get locked into a home-made solution."
Mats Tornard thinks that it is exciting to be a pioneer with RFID/EPC. "Now we are tuning the system and handling the challenges that pop up. The RFID/EPC solution has such enormous potential. It will help us in many ways that we haven't even thought of yet. We will be well in the lead when our competitors start using the technology -- but I guess it won't be too long," says Mats Tornard.
