Apparel RFID Update

Results from RFID implementations in the apparel marketplace and retail world in general are coming to the surface as more companies pilot the technology and pioneers move into more extensive rollouts.

The apparel market lends itself to item-level RFID tagging because of the relatively high cost per item (i.e., a shirt costs much more than a can of soup).

Marks & Spencer is busy rolling out RFID to more than 80 stores after successfully deploying the technology in a smaller number of stores.
Germany-based Metro Group also continues to expand its RFID programs, including initiatives with at least a couple of apparel suppliers.
Last month an Apparel RFID Solution Centre opened in Finland. The center, which will host demonstrations of the most advantageous points in the apparel supply chain to attach RFID tags, among other things, is expected to attract up to 100 garment manufacturers, brand owners, retailers and logistics providers.

The center is a joint venture between RFID technology suppliers ADT, Salpomec and UPM Raflatac.

VF Corp., Russell Corp. and other Top 200 suppliers to Wal-Mart have been supplying cases of apparel labeled with RFID to Wal-Mart. The U.S. apparel market is waiting for Wal-Mart or other retailers to announce item-level apparel initiatives publicly.

Avery Dennison Retail Information Services director of worldwide marketing for RFID and security Philip Calderbank said two U.S. footwear retailers and one apparel retailer are implementing item-level RFID programs.

By August, one U.S. retailer is expected to start receiving RFID-labeled cartons from Chinese vendors directly at its stores rather than via its DCs.

Sungod, a leading Chinese sweater producer and retailer, has implemented RFID to enable cross-docking of goods from the manufacturing plant through to its retail stores. The firm partnered with Laudis Systems on the rollout, which has reduced labor costs by 3,000 hours for every 200,000 items that are touched by RFID.

Frank Riso, senior director of retail operations and marketing for Motorola's Retail Industry Solutions Group, said Motorola business partner Avaana recently worked with India-based retailer Madura Garments on the largest RFID retail rollout to date.

Bimal Sareen, managing director and CEO of Avaana, which is introducing an "RFID Analytics" solution, said Madura's RFID implementation has been running in production since this past October. (Stay tuned for more details in the next issue of Apparel.)

At this past January's annual National Retail Federation (NRF) expo, Fujitsu was among exhibitors that showed RFID solutions. The firm demonstrated a contactless payment system that syncs up with the shopper's driver's license, photo ID and cell phone for verification.
Both Zebra Technologies and Motorola showed mobile carts that can be equipped with RFID-enabled scanners to quickly change prices in the store or track merchandise within the store or DC.

Also at the NRF expo, Paxar Corp. and The Big Space Ltd. introduced the RFID magicmirror, which provides consumers with an interactive shopping experience while trying on clothes. IconNicholson also demonstrated RFID technology that is integrated into the dressing room experience.

Alexi Sarnevitz, senior director of strategy for the SAS Institute's Global Retail Practice, said RFID has the potential to revolutionize retail industry customer service, especially when used in conjunction with programs that blur the lines between brick-and-mortar and web-based shopping for the consumer.

"There is an opportunity to recreate the customer service of the early 1900s," he said, stressing that retailers should leverage RFID data for CRM.
- Kathleen DesMarteau
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Checkpoint Introduces Evolve
Checkpoint Systems Inc. has introduced the Evolve family of labels which offer dual-function EAS-EPC capabilities for security and inventory management applications.

Evolve labels give retailers the ability to combine RFID and EAS (security technology) into one label.
George Off, CEO of Checkpoint, said he believes Checkpoint is the first company to offer such a combination of technologies, and it has applied for patents on it.

He said Evolve was developed to give retailers and other apparel companies the flexibility to implement RFID gradually. With Evolve, retailers, brands and manufacturers have the option to upgrade the EAS tags they already are applying to garments to prevent theft. (EAS tags trigger alarms at retail if the consumer tries to leave a store and the tags haven't been deactivated.) The retailer can choose to use Evolve tags that have not only EAS but also EPC (RFID) capabilities for greater tracking and inventory control, in addition to the security capabilities. There is no additional investment required in the retailer's existing security infrastructure, Off said.

Off said Checkpoint is willing to license the Evolve technology out to other labeling and product identification players to encourage its adoption in the marketplace. Other label vendors would pay Checkpoint royalties for the use of the Evolve solution.
He said the cost of the Evolve labels would be competitive with the cost of RFID labels.
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Reshare has introduced its patented technology designed to enable brands to sell directly to the consumer via their web sites without circumventing (and upsetting) valuable retail channel partners.

Interest in the solution is strong, Reshare founder and CEO Adam Southam told Apparel. While the firm is targeting multiple industries, apparel is a key focus market for Reshare, which has been in discussions with more than 60 apparel brands and several major retail chains, he said. Some early apparel brand adopters have experienced positive retail reaction to their use of the solution, he noted.

Reshare has been around almost eight years, but many of its early years were focused on legal issues as it fought for patent rights for its technology model. The firm has a business method patent, which is much more difficult to obtain than a product patent.

Reshare's technology is targeted to brands that are reluctant to pursue online sales because of fears of upsetting their retail clients. The company also is marketing itself to retailers who want to have a chance to get a cut of their vendors' direct online sales, which they may have helped drive via their extensive marketing efforts.

By using the Reshare solution, the brand gives consumers the option to select their favorite retailer from a drop-down list when the consumer purchases an item on the brand's web site. In turn, that retailer gets a percentage of the revenue from the sale. Reshare also collects a fee upon the completion of a sale, just as a credit card company would for processing a transaction.

The system can be structured so that sales representatives associated with the retailer can get commissions from online sales.
For example, if a brand and retailer have an agreement to use Reshare, a sales associate in the retail store can get credit for a sale if a consumer accesses a brand's web site via a web terminal in the retail store and purchases a product direct from the brand that may not be in stock in the store.

Reshare also can help facilitate direct-ship transactions, whereby the brand arranges to ship a product straight from its factory or its DC straight to the consumer on the retailer's behalf.

Southam said it is possible that retailers could exert influence with brands and mandate that they use Reshare on their web sites if they want to maintain strong vendor relations with the retailer.
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Motorola Unveils MC35 EDA
Motorola Inc. is rolling out the MC35 Enterprise Digital Assistant (EDA) all-in-one communication device to the retail marketplace.
The MC35, which has the look, feel and size of a traditional PDA, combines cellular technology with laptop computing technology. Among the devices' features are: global positioning satellite (GPS) capabilities, Wi-Fi and Bluetooth functionality, a camera and a barcode reader.
Users can talk, e-mail, connect to the Internet, use mission-critical business applications, take pictures and capture data (including signatures) with the device, which is available for a list price of between $640 and $750.

Frank Riso, senior director of retail operations for Motorola's Retail Industry Solutions Group, told Apparel the MC35 is ideal for retail managers who travel frequently from store to store and need to maintain connectivity to central systems.

He said the camera functionality, in particular, is in demand from Motorola's retail clients, who want regional managers to be able to easily capture and e-mail images of store displays. This type of communication enables retail teams to quickly convey examples of the correct or incorrect way to set up a display.

Customers also often ask these traveling retail managers for price checks, Riso said, and the MC35's barcode scanning function enables the managers to look up a price on the spot to answer the consumer's question quickly.
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Chico's Protects Fashion IP with Liquid Machines
To protect its intellectual property rights, Chico's recently started rolling out enterprise rights management software from Liquid Machines.
Liquid Machines enables Chico's to provide its executives and staff with role-based access and usage controls to the firm's intellectual property. Chico's uses the system to create access protection and usage policies that control which people are authorized to read, edit or print specific documents.

These policies can be applied by either the document author or by the enterprise itself, ensuring that the corporation remains in control of who sees specific data. Liquid Machines' approach marries security with the data - meaning that the security policies and controls remain with the data for its entire life - as it travels from machine to machine, within and beyond the enterprise, or if attempts are made to copy or excerpt it.

"At Chico's, we are dedicated to protecting critical company information across all of our brands, from our product design, purchasing and sales information to our marketing plans and new product introductions," said Ed Martin, information security manager for Chico's Retail Services Inc. "Liquid Machines is an important part of our intellectual property protection strategy and program, giving us the confidence we need to share confidential information with authorized associates."

Deployment of Liquid Machines to additional business units will continue throughout the next few months as the company expands its enterprise rights program.
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Accruent Inc. has introduced Accruent 7, an enterprise application suite for real-estate intensive businesses, including retailers.
The solution features next-generation visualization capabilities that enable managers and executives to view extensive amounts of real estate data at a glance. Version 7 also features an embedded Business Objects business intelligence engine for business performance management.
Accruent CEO Mark Friedman told Apparel that the solution is designed to help retailers manage the full lifecycle of their real estate portfolios - "from dirt to balloons" (i.e., from the ground breaking to grand opening of a store) to renovation to liquidation (if needed for non-productive locations).

Friedman emphasized that it is very unusual and unfortunate that there has not been more off-the-shelf enterprise software to help retailers manage their real estate holdings, which often represent the single-largest capital expenditure on their financial statements. Many retailers are managing real estate concerns with lots of spreadsheets, and often different departments and external vendors are responsible for many different pieces of the real estate pie, he said. "It tends to be decoupled from the business strategy," he added. "It's surprising not to have technology to support it."

With major accounting changes that hit the market earlier this year, many companies are seeking more efficient and reliable ways to manage their real estate, especially from a financial-compliance perspective.

Charming Shoppes, an early adopter of Accruent's technology, has seen "a very big effect on its bottom line" from the software, Friedman said. Better real estate management contributed directly to a 30 percent increase in net income in 2006 for Charming Shoppes, he said, pointing to a case study that Accruent did with Charming Shoppes.
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Event Report: Lawson Software's CUE 2007
This spring Lawson hosted its first CUE (Conference and User Exchange) event since its merger with Swedish software company Intentia International AB. The meeting experienced a 12 percent increase in attendance over the 2006 CUE, attracting more than 4,700 Lawson software customers, partners and prospects.

"Simply Stronger" was the theme of the event, which was staged in San Diego and featured hundreds of workshops, training sessions and demonstrations as well as an exhibit hall showcasing Lawson vendors and partners.

Lawson focused its message at CUE on the success of its merger with Intentia, the launch of its M3 7.1 software and an upcoming software release that it said will be unlike anything the apparel industry has ever seen.

U.K.-based John Gledhill, global director of product management for Lawson and a 17-year veteran of Intentia, said of the recent merger: "There couldn't ever have been [a merger] easier than this one. That doesn't mean it hasn't been hard work ...but as a merger, I think it's been brilliant. It's been a success, and I'm really proud of it."

New applications from the M3 "make, move, maintain" product line, which originates from Intentia's Movex software, were introduced at CUE with workshops and demonstrations. M3 is designed for the needs of the manufacturing, distribution and maintenance industries, including "fashion," which Lawson defines as encompassing home, beauty, apparel, footwear and style items.

Highlights of the new Lawson M3 7.1 release include: Smart Client, an enhanced user interface; Supply Chain Orders, a module with increased functionality for collaboration; Fashion Planning Workbench, for improving the management of capacity and delivery by supporting decision making and balancing workloads; and Demand Planner, designed to improve forecasting results and avoid depleted or excessive inventory.
"In the fashion industry, there have not been a lot of successful [software] companies selling into that market," said Olin Thompson, vice president of industry strategy for Lawson. "Everyone thinks fashion is glamorous. The vast majority of the fashion industry are hard-fighting business people. We have to recognize that, and our solutions have to be built with the understanding of the personality of the fashion industry."
As a result, Lawson has introduced Quickstep, a preconfigured software system based on the Movex application. Quickstep uses proven "best practices" to create streamlined processes for manufacturing, resource planning, enterprise asset management and customer/supplier relationship management, Lawson reported.

However, the company stressed that Quickstep is not to be considered as "M3-lite."
"It's a starting point," said Thompson. "It goes back to the personality of the industry. It's how fast can you get this [system] up and running? How little can I spend to be successful? How can I minimize the risk? Change is risk. So how can we minimize that [for our fashion customers]? Quickstep is an important part of that process."

Keen Footwear is the first in the fashion industry to pilot Quickstep. Robert McKee, Lawson's industry strategy director for fashion, says: "[Quickstep] definitely enhances the time to benefit. We've used what we've learned over [many] successful implementations and employed best practices into a preconfigured solution product which is essentially coming as close as we can to shrink wrapping it."

Peg Nicholson, senior vice president and CIO at Acushnet, makers of golf equipment, apparel and shoes, said her firm chose Intentia's Movex back in 2003. "There aren't a lot of [software firms] that play in the fashion industry and deal with style, color, size and dimension," she said, noting that Acushnet chose Intentia after looking at other vendors including SAP, Oracle, Bond, JD Edwards, SSA, IMI and IFS. "We're an AS/400 shop, and Lawson - with their Java capability and open architecture - matched our skill set."

In addition, Nicholson added: "They have a lot of experience with global customers, and the package had been around since 1984. That's why it's so functionally rich. It has a logic to it. The concept is easy to understand."

Next month, Lawson is planning to release another M3 application called the Assortment Replenishment Planner. "It's especially focused on fashion companies who are somewhere between being a retail company [and a manufacturer]," said Gledhill. "These companies now have to plan the management of those stores, what to push, what the assortment is going to be, how they are going to budget for it, and how they are going to replenish it. All that information is automatically integrated into the rest of the planning system, which then plans the supply chain back to the actual factories. ...We don't believe there's anybody in the market who can do this in a holistic, integrated way, and we're very, very excited."
The 2008 CUE conference will be held in Las Vegas, NV.
- Bonnie McCarthy
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Windsor Wins Big at Loss Prevention
Windsor, a California-based women's special occasion clothing retailer, has dramatically driven down its shrinkage level.

The family-owned business, which traces its origins back to 1937, saw its shrinkage levels start to rise steeply about 12 years ago when it started steadily expanding beyond the Southern California market. Merchandise theft wasn't a big issue for the 38-store chain until it spread its reach across the country into states such as Texas and Connecticut.

Windsor, which operates stores in 12 states, primarily in malls and lifestyle shopping centers, faced shrinkage levels as high as 10 percent to 13 percent of sales in some of its new stores that were thousands of miles from the watchful eye of headquarters management. As Leon Zekaria, president of the company for the past 16 years, put it: "It was destroying the profitability of those stores."

The problem also was driving up the $50 million chain's average shrinkage rate into the range of 2.5 percent of sales rather than the 1.7 percent level that is generally accepted as the retail industry average.

To fight the problem, the company started working with Fontana, CA-based P&L Solutions, a consulting firm that specializes in retail loss prevention. P&L founders Bill Petropoulos and Kevin Lynch helped Windsor address the problem with a strong focus on training store managers in loss prevention, and raising awareness about the problem across the chain.

"It became one of our big company missions," Zekaria said.
Before working with P&L Solutions, Windsor channeled most of its loss prevention energy into apprehending thieves. Now its focus is on prevention, Zekaria said.

Conquering a big shrinkage problem is a gradual process, but by the late 1990s, Windsor had reduced its loss levels down to 1.5 percent of sales chain-wide, and even lower at some stores. The firm is experiencing $400,000 to $500,000 annually in cost savings, thanks to its emphasis on loss prevention, and this amounts to a fraction of the consulting fees it pays P&L Solutions, Zekaria said.

Plus, stores sales have grown by 5 percent on average in the past seven or eight years - something that wouldn't have been possible if Windsor had not gotten a handle on its shrinkage problem, he added.

P&L Solutions consultants still travel to Windsor's stores regularly to evaluate its loss prevention programs, focusing first and foremost on ensuring that store managers understand the issue and are effectively communicating with sales associates about it.

"We continue to put a big emphasis on believing in and empowering our management team to make the right decisions with personnel," Zekaria concluded. "We recognize that high shrink often is a symptom of other problems in the company, and that we have to weed out people without integrity and focus on hiring people who embrace our culture of customer awareness."
- Kathleen DesMarteau
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