Radio Frequency Identification (RFID) based on Electronic Product Code (EPC) tracks the status of apparels right from the manufacturing point till point of sale. RFID is being considered to have a significant impact in the apparel segment by helping to identify the location and condition of the merchandise. This helps companies to optimize business processes and reduce operational costs. But the question is how far is it successful in the apparel segment? How much does it help in picking information, sharing, receiving, and replenishing other processes?
For ages, using bar codes for product specification was considered a normal practice in the apparel industry. This method was less expensive and was a monopoly in the apparel segment. Notwithstanding its cost-effectiveness, using bar codes had its own demerits. It was time-consuming and more labor-intensive. Using RFID, retailers were able to have a better understanding of their customers and their behavior. It also facilitated enhanced operational efficiency, accuracy in information, and better visibility in the supply chain operations. All these helped the retailers to provide better customer service. These merits of RFID made the retailers overlook the cost factor involved in the process. The long-term benefits, performance, and the resulting better demand have motivated retailers to adopt RFID.
RFID in Apparel Industry:
Huge volumes of apparels are shipped by manufacturers. Ongoing expenses incurred in conducting manual inventory of the apparels, managing out-of-stock items, and restricting theft are in excess. Item level RFID tracking comes to the aid of manufacturers and retailers. As retail suppliers are from diverse geographical regions, mix and match of sources, and suppliers create ripples across the supply chain. Possibilities exist that inventories are often miscounted or lost. Retailers are hard-pressed in making proactive business decisions.
To tackle these issues retailers opt to adopt RFID process which helps them in tracking inventories, thereby providing visibility into what is selling, where and when. RFID tags include data with a wide range of information and applications. For instance; RFID tags in apparels contain information regarding the size, color, and style. Sales staff can read the RFID tags of the apparels on the store racks, and at the point of sale. Knowing that a specific item is available in his store when a customer walks into his shop helps the retailer to ensure better customer service, and enhance his profits. From the customers point of view also, this gives him a pleasant shopping experience, motivating them for multiple visits. RFID proves more beneficial for specialty retailers who design their own apparels, source, and sell them. They see considerable saving of time which normally happens when they conduct inventory checking.
Trends for 2012:
With the advent of globalization, retailers are facing significant competition. Failure to understand their customers and market invariably means a business failure. Discreet retailers are rewarded for their long term outlook in business, their maturity with varying consumer preferences, and for their ability to balance short and long term opportunities.
Market and customer choices keep evolving continuously. Retailers need to keep abreast of the market conditions, and fashion trends, and have their store racks filled accordingly. With fashion trends changing in a wink, and apparel; having a short life cycle, retailers need to think and act quickly. RFID enables them to fulfill these requirements.
More growth is on the cards for RFID processes during 2012. Retailers are eager to acquire visibility and tracking of their inventory. ABI research states that global sales of RFID systems in apparel companies are expected to reach $125 million by 2014. It further estimates that item level tracking in supply chain management will exceed 37% growth. Cloud computing will have a major influence in the RFID market. Data can be sent and accessed from anywhere, with any method, and with the limits preferred to be imposed.
Apparel retailer Macy's has added RFID applications to a few of their locations. Based on its success, during 2012 and 2013, the retailer has further planned to deploy item level RFID tags and readers in all stores; nationwide for inventory and cycle counting.
Challenges:
The main essential for the success of RFID in the apparel market is creating an awareness regarding the same. Lack of awareness regarding its benefits, and high product pricing restrains retailers from adopting it. As apparel industry mainly focuses on minimizing its expenditures to maximize its profits, the impact is even more. Limited computational capacity, lack of adequate resources, and inefficient data management are few other issues that hinder everyday acceptance of this technology.
Trends in RFID though are likely to take time to materialize, and gives a positive signal for the future. Government initiatives and introducing intelligent readers will propel the demand for adopting RFID practices by apparel retailers. RFID practices in the apparel segment, though still at a nascent stage, promises a prominence over bar codes, and will enhance global footprint.
References:
1) Rfidjournal.com
2) Airesearch.com
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