Soma Rides RFID to 95 Percent Inventory Accuracy

You've just found the perfect lace bra and you want the matching panties, but you can't find them in your size. Also, you're not sure if the fit of the bra is correct, and you'd like some guidance, but there's no one available to help you, because the associates are busy helping other customers search for garments in the appropriate size, which may no longer be in inventory, or which previous customers have not returned to their correct spots. You don't want the bra without the panties, and you don't have any more time to wait, so you put the bra back where you found it — or maybe you just set it down wherever you are, one more "lost" SKU in a sea of very small, widely varied items — and leave without making a purchase.

This is a nightmare scenario for any retailer, and one that Soma Intimates is working to avoid. Launched in 2004 as part of the Chico's FAS portfolio, Soma is focused on providing beautiful, sensual intimate apparel, as well as warm personalized customer service, and, like most retailers, it is striving to keep its customers coming back by better serving their needs. That requires a good handle on inventory and a deepening engagement with store associates.

At Soma, associates previously did not have the insight into inventory that they needed. The retailer had been conducting inventory counts infrequently, and when it did, the process was costly and disruptive to the daily business, said Ken Silay, former director, technology research and innovation. Also, with relatively few physical inventory counts, accuracy could, and often did, steadily decline over the months until the next inventory count.

Accordingly, confidence in store inventory numbers declined. Because intimate apparel is heavily style-, size- and color- oriented, keeping a full assortment always available on the sales floor is extremely labor intensive, said Silay. Soma's replenishment process was difficult in large part because sales associates lacked visibility into inventory both on the floor and in the back room. The contents of shipments received were a mystery until each box was opened, which added to the challenge of finding what customers wanted in a timely manner. To compound the problem, sales associates were losing valuable time searching for inventory when they could have been helping customers, he said.

To get a handle on its inventory accuracy and visibility challenges, Soma turned to Tyco Retail Solutions' TrueVUE solution, embarking on an RFID pilot project in 13 out of its 250+ Soma stores. The goal was to achieve an accurate item-level inventory foundation. From there, Soma would be better able to achieve visibility from the manufacturer to the store, and from the sales associate to the customer.

The solution focused on a variety of inventory management processes including weekly cycle counting, store receiving, daily sales-floor replenishment and product location assistance for replenishment and customer service.

At each of the stores in the program, readers have been placed at the back and front of the store. Tags are read in the backroom when merchandise arrives — eliminating the need to open boxes to identify their contents — read again after merchandise moves to the sales floor, and read a third time at point of sale, and quantities are adjusted accordingly in the system. Both store personnel and company management can view inventory levels to determine what items need to be reordered or replenished on the sales floor.

Item-level RFID is providing sales associates with accurate, real-time inventory information in one place, which enables them to better manage Soma's deep merchandise assortment, drive increased sales and, with more confidence in inventory accuracy, ensure shopper satisfaction.

By incorporating RFID reads into backend systems weekly, rather than monthly or bi-annually, Chico's FAS, Inc. can improve the flow of inventory from the distribution center to the store and streamline the replenishment process.

Soma has improved inventory accuracy to 95 percent, including full-store inventory count, and the increased visibility into daily shipment receipts has reduced out-of-stocks, said Silay.

That customer looking for the matching panties? Well, now that's not a problem. Soma is also using the technology to quickly find products in the store that customers are unable to locate, or to track down merchandise requested from another Soma store. With a high level of visibility into inventory in each store, Soma is achieving a much higher level of customer satisfaction — and higher sales.
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