Discussion about Radio Frequency Identification (RFID) for tracking products usually revolves around big, established brands and retailers. Until recently, smaller companies’ adoption of RFID technology was hindered by its perceived high cost of entry. That has changed. As the technology matured, costs have come down, and industry use cases have demonstrated that a positive return on investment (ROI) is achievable for small- to mid-sized companies, as well.
In fact, one small apparel brand, headquartered in Clemson, South Carolina, recently began RFID tagging its signature t-shirts — at the request of a major retail customer. In the process, Southern Fried Cotton (SFC) proved that SKU-level RFID product identification delivers the same game-changing benefits for a small enterprise as it does for companies operating on a larger scale. As a result, SFC has successfully turned one customer’s request into a major growth opportunity, which delivered significant ROI in just eight months.
Growing through change
Since its inception in 2012, Southern Fried Cotton has doubled its retail operations, added a wholesale division, and increased from 30 to 350 retail customers. Growing so quickly, the company had trouble keeping up with inventory management and order accuracy. So, when a major retailer asked SFC to uniquely identify each piece of apparel shipped, they partnered with Avery Dennison and GS1 US to deploy an Electronic Product Code (EPC®)-enabled item-level RFID tagging solution. What began as an imperative to address a retail customer’s needs became a much more integral component in the company’s overall growth strategy.
Phasing in RFID
Prior to implementing RFID tagging, SFC warehouse employees would receive an order, pick-and-pack, and turn orders around by highlighting what had been picked and packed on paper. Manual reckoning and paper-based records were used for invoicing. This manual system was not ideal — in two years, SFC was levied tens of thousands of dollars in chargebacks from inaccurate shipments.
SFC learned that RFID technology solutions are scalable, and could be tailored to their needs. A simple solution was phased in to optimize RFID benefits and minimize friction. This approach enabled SFC to move forward with “digestible” investments.
Now, SFC creates and produces RFID labels on-site and on-demand. They pick shirts labeled with RFID tags and use an onsite RFID reader to read the GS1 identifiers encoded in the tags — telling them exactly what shirts are picked and how many are in a stack. As new efficiencies were realized, SFC moved to a carton audit solution, which allowed them to pack and verify carton-pack accuracy —reading the identification of all shirts inside the box, while automating each carton’s Advance Ship Notice (ASN) documents.
Accuracy improvements benefit overall business
SFC focused on utilizing RFID tags to speed up order fulfillments while significantly improving accuracy of shipment packs to better serve its retail customers.
Today, the shipping manager places each box in the RFID tag reader, and with one click, the box contents — all of the t-shirts’ identification numbers — are listed within seconds. Printed reports are easily translatable into the Electronic Data Interchange (EDI) system. For retailers using EDI transactions, the reader lists of the shirts’ identifiers form the basis of the ASN.
While barcodes require line-of-sight reading, RFID can wirelessly identify products on the warehouse shelf, in the shipping box, on the shipping dock or on the retail floor. With the benefit of serialization, SFC now has much better SKU-level inventory visibility and the capability to know where their products are at any time.
Since replacing paper-based systems with GS1 Standards-based barcodes and RFID tags, SFC can now conduct business with large retailers that require RFID tagging and can quickly fulfill custom orders and accurately deliver merchandise to all of its 350 buyers.SFC’s order accuracy, once a significant and costly problem, now tops 99.54 percent and its chargebacks were reduced by 98.8 percent.
Future-proofing for omnichannel growth
One of the biggest challenges for brands is speed-to-market, especially with increasing demand for customized products — a significant part of Southern Fried Cotton’s business.The use of barcodes, RFID and other interoperable GS1 Standards allowsSFC to successfully compete in any channel, from traditional brick-and-mortar retail to e-commerce.
Southern Fried Cotton plans to continue to leverage RFID technology to strengthen its omnichannel and online presence through unique digital identity —creating significant potential to build brand awareness and drive more traffic to its online store.
Southern Fried Cotton’s experience yielded some pointers for other small to mid-sized companies looking to deploy RFID solutions. For example, simple, scalable RFID solutions are possible and beneficial. SFC was able to keep its cost of entry down by budgeting for a deployment plan that fit the company’s unique needs and taking one scalable step at a time. The solution is adaptable enough to grow along with the brand.
Sometimes small changes can make a big impact; a prudent start can be made by tackling the low-hanging fruit first to find short-term wins before moving on to enable other product categories.
There is little doubt that more and more retailers are going to require products to be supplied with RFID technology, so small or mid-sized companies and those that are new to wholesale operations should implement RFID tagging early and use it from the start. The investment is returned in retail customer satisfaction, reduced chargebacks, improved order accuracy and highly refined, data-driven, real-time inventory visibility. Growing pains and technology adoption scuffles aside, RFID item-level identification has proven that it will pay off in the long run.
Susan Pichoff is Senior Director of Community Engagement, GS1 US.