Courtesy of Covid, retail is more digitized than ever before. But powering front-end customer experiences requires connectivity and visibility on the backend.
According to Werner Terblanche, commercial director at apparel labeling firm ITL Group, radio-frequency identification (RFID) enables companies to better track individual products throughout their supply chain. This allows retailers to deliver more accurately to the end consumer. Aside from creating benefits in fulfillment and inventory movement, RFID also unlocks opportunities to cut back on safety stock and overproduction, two hurdles in fashion’s path to reducing its environmental impact.
Sourcing Journal spoke to Terblanche about the operational benefits and the consumer-facing applications for RFID labels and tags.
SJ: The pandemic has highlighted the fashion industry’s need for better inventory tracking. How can RFID-enhanced labels improve real-time visibility of merchandise throughout the supply chain and at point of sale?
WT: The pandemic has ultimately changed the way we shop. We’re finding that many consumers who still venture out to brick-and-mortar stores plan these excursions much more carefully and try not to spend unnecessary time in store. They quite often check store stock availability online, and there’s nothing worse than getting to that store only to learn that the stock is in fact not available as indicated on the website.
With a 2020 McKinsey report finding that 43 percent of consumers who didn’t purchase fashion online before the pandemic are now using this channel, the need for an omnichannel strategy has never been more important. However, to successfully run an omnichannel strategy, stock accuracy is key.
By assigning a label with a unique ID to an individual item as opposed to a barcode assigning an ID to a group of like products, retailers now have inventory visibility on item (SKU) level indicating the size, color and style of the item. And this visibility is available in distribution centers (DC), in store or at point of sale. They also benefit from increased dispatch and receiving accuracy, resulting in shorter DC processing times.
So overall, RFID-enhanced labels offer a higher level of inventory and point of sales systems accuracy, which increases supply chain efficiencies from source to sale. In addition, improved inventory accuracy and visibility allow for better decision making, optimized availability to sell and ultimately greater customer satisfaction. Considering the added benefits of reduced labor and time for physical stock management and overall shrink, RFID becomes a very attractive prospect for apparel retailers interested in increasing top-line revenue and bottom-line performance.
SJ: As consumer demand for sustainability increases, how do ITL’s RFID solutions help fashion brands deliver lower impact products?
WT: Sustainability will remain on brands’ and retailers’ agendas, as the Covid-19 pandemic is further pushing the pre-existing need to transition towards sustainable development in the fashion industry.
RFID is a technology that helps fashion brands reduce their overall waste and carbon footprint as well as increase transparency by improving existing stock management (less buffer and unsold stock), reducing overproduction (reducing safety stock whilst allowing opportunities to improve forecasting) and improving supply-chain management through greater visibility throughout the production process and allowing for errors to be identified earlier and reduced.
Lately, we’ve also seen RFID inlay production processes and chips become more sustainable. PET is being eliminated from inlay construction with more sustainable paper being used. Antennae manufacturing processes are also becoming “cleaner,” while chips are getting smaller and performing even better. We’re excited to be part of the current rollout of PET-free inlays for a U.K.-based retailer in the first quarter of 2021. We’re optimistic that we’ll be able to share the next level of sustainable inlays with no PET, more sustainable paper and antennae and the next-generation chips with our customers by mid 2021.
As we can offer bespoke integrated RFID products, we can also use Intelligen, our award-winning product re-engineering solution, to apply simple and small dimensional changes to optimize the product’s layout and accommodate a mainstream antenna. As such, we not only reduce our customer’s environmental impact but also pass on performance and price benefits.
SJ: Beyond the backend use cases, what are the customer experience applications for RFID-connected apparel and footwear?
WT: With Covid-19, reducing the number of touchpoints in retail has become imperative. As a result, we’ve seen an increase in the adoption of frictionless checkout technology using RFID. Magic mirrors and interactive fitting rooms can also help to improve the overall experience whilst reducing the number of touchpoints. All of these applications require UHF (ultrahigh-frequency) hardware, though.
Retailers can improve customer engagement by leveraging consumers’ mobile devices through assigning a digital twin ID to RFID in the form of NFC (near-field communication) or QR code. This allows the retailer to communicate information to consumers relating but not limited to: the origin of the article, compliance with best practices and an ethical code of conduct in raw material sourcing and adherence to ethical labor practices, garment care instructions, sustainability practices and tips and the circularity of the garment.
At present, with the constraints brought about by Covid-19, many countries are experiencing delayed home delivery lead times due to the significant increases in online shopping, and with consumers unable or unwilling to wait, click-and-collect is increasingly playing a key role. By utilizing RFID to its full extent, DCs can pick stocks faster to ship to these stores and the customers’ parcel can be found faster, contributing to an improved overall customer experience.
SJ: What differentiates ITL from other RFID label suppliers?
WT: Our team has built up significant RFID solutions knowledge over the past eight years, culminating in the launch of our integrated RFID solution, 360RFID, covering source tagging, software and hardware.
From an inlay perspective, we’ve been very selective about strategically partnering with a few inlay manufacturers that can offer high-performance ARC-certified inlays at competitive prices. We’ve compiled an extensive inlay portfolio based on performing our own comparative in-house inlay testing as well as from our learnings in real-life retail environments through pilots and bulk deployments for apparel, footwear, jewelry, cosmetics and industrial applications.
We also possess the skills to integrate RFID into our retail customers’ branded paper tickets and fabric labels, drawing on our over 30 years’ experience with these product lines when the standard adhesive sticker just doesn’t meet their requirements.
At ITL, we have over 25 years’ service bureau experience. The majority of our service bureaus are housed in our ISO 9001:2015 factories that are located near all the major sourcing regions of our retail customers. RFID is a natural progression from our traditional barcode variable data business platform. With our online ordering system, LabelVantage, we have the experience to seamlessly integrate with our retail customers’ systems for variable data feeds, whilst our LVPrint module returns EPC (electronic product code) and password values to our customers’ ERP (enterprise resource planning) systems. Our rapid deployment timeframe for a global RFID source tagging program is typically between seven and nine weeks.
Our ReflectRFID software solution is cloud-based, scalable and can easily be tailored to suit various hardware platforms. It’s also non-intrusive and integrates seamlessly to our clients’ ERP systems. We’ve adopted a flexible approach when it comes to billing for this solution, working closely with our customers to tailor make their licensing and support arrangements.
Finally, ITL is also an approved reseller for a number of the leading global RFID hardware manufacturers and enjoys Premier ISV (Independent Software Vendor) status from Zebra.
Our strength is being able to engage with our customers on a personal level to design and structure solutions that meet their financial, operational and strategic objectives.