RFID And Loss Prevention With River Island

Radio-frequency identification (RFID) is gaining traction amongst retailers, which are investing resources to quell the risks of shaky inventory accuracy. Jon Wright is the head of Safety & Loss at one of the UK’s biggest retailers, River Island. The company recently trialled RFID and has seen exciting results both in stock accuracy and sales.

Ahead of the Retail Loss Prevention 2015 event this coming June, Wright has shared insight into the program, and how retailers can boost sales and drive loss prevention at the same time using RFID technology.


Starting Out

RFID lets retailers identify individual items, cases or pallets the same way bar codes do – but wirelessly, with richer data and without need for a line of sight. There are many potential applications for RFID within retail; from increasing customer interaction with products through to item level visibility of products being stolen from the store. In our own pursuit, we wanted to significantly increase the overall stock accuracy at a store level and see if that directly impacted sales.

We run annual stock-take in all of our stores, which is an opportunity for us to cleanse our stock files. At that point, our stock accuracy is in the high 90s. But six weeks after stocktake, stock file inaccuracies would begin to affect the replenishment to stores.

If you are missing twenty shirts in-store through theft or admin errors, but your stock system thinks you have them, you will not get them replenished and lose potential sales. The only time this will be rectified is through the next annual stock take. What we needed were ways to stock-take a store at least every week, something that RFID could enable us to carry out.

Process

Most RFID vendors will tell you to run small trials on a limited number of product lines, making it easier to manage the RFID data coming through. We wanted to do something a little bigger, thus deciding to encode virtually everything in our trial stores – which included all of our clothing and jewellery lines. And to support the RFID data management, we dedicate a central team to analyse and audit.

For the RFID trial stores, the products are separated at our distribution centre and then tagged and encoded with RFID inlays. The supply chain process for these products doesn’t change at this point – normal delivery routines and so on.

But the stock-take is another story entirely. Once a week, we attend the store and conduct an RFID full-store stock count. We literally walk around with our RFID handheld, scan everything and upload the data to our RFID cloud.

Then a team at head office downloads that data, reviews and compares it to our original store stock-in-hand file. All of the errors or inconsistencies are subsequently reconciled, correcting the positives and negatives. The next replenishment to store is then based on accurate information.

Initially, our total stock accuracy was in the mid 70 per cent range, with some stores reporting significantly lower than that. Upon implementing and trialling the RFID system, accuracy was raised to 98 per cent for all stores within two weeks and has remained consistent week after week.


To read more about how Wright calculated the RFID program’s ROI, rolled out the program in an omnichannel context, and built a business case for expanding the program to other stores, grab a copy of the white paper, RFID – The Essentials You Need To Know For Loss Prevention, available from the Retail Loss Prevention website.

You can also meet Jon Wright and see his presentation on the topic at the upcoming Retail Loss Prevention 2015 event, to be held in Melbourne on June 15-16.  

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