Lord & Taylor faced an all-too-common retail problem: you can't sell what you don't display. Keeping the display floor properly stocked was particularly challenging in the shoe department of its flagship Fifth Avenue store in New York. Although sales associates worked diligently to restock the floor, they couldn't keep up with the daily retail activity. As a result, dozens of display samples went missing and the retailer lost out on opportunities for sales.
The problem lay in the bar-code system the retailer was using to manage its shoe displays. Among other things, the bar code line-of-sight requirement meant associates had to physically touch every shoe to read its bar code, making inventory a slow and labor-intensive process.
"We carry a tremendous number of sizes and styles in a wide range of colors. We had to pick up every shoe on the floor, turn it so the bar code could be seen, scan it, and upload the data into inventory," said Rosemary Ryan, Lord & Taylor's regional operations director, in a prepared statement. "It took two to four people, all working about six to eight hours, just to do a complete scan." As a result, associates were only able to conduct a complete display inventory once a week.
Lord & Taylor's business team began looking for an alternative solution for managing inventory and quickly homed in on radio-frequency identification (RFID). It started meeting with RFID vendors, eventually selecting Zebra for a one-day proof-of-concept test followed by a larger-scale pilot.
To prepare for the pilot, associates placed an EPC Gen 2 passive ultra-high-frequency RFID tag directly on each pair of shoes on the sales floor. The RFID tags were then "associated" with the UPC bar codes from the retailer's data files, providing full information on the vendor, color, price, and so on.
For the pilot, shoe department associates used Zebra's MC3190-Z RFID handheld readers to wirelessly collect information from the display shoes' RFID tags, creating a baseline inventory record. As new shoe styles arrived, a pair of each style and color was removed from inventory to be sampled, tagged, and commissioned for display before being placed on the floor.
Each day before the store opened, one or two associates walked the floor with the handheld readers to inventory the shoes. Once the inventory was complete, a "missing sample" report was printed to identify all shoes missing from the sales floor. Associates were then able to locate and replace missing samples.
The pilot quickly demonstrated to Lord & Taylor the benefits of using RFID for inventory management. A scan of the display floor, which could take a full workday to accomplish before RFID, could now be done by one or two people in about 60 minutes, resulting in a 75-percent labor savings. In addition, by using RFID, the retailer's shoe department could maintain daily display sample accuracy of at least 95 percent.
The tailored reporting enabled by Zebra's RFID software solution platform was also a big time saver. Previously, data collected via the bar-code scans had to be sent to the data center for processing. The reports then took a full day to get back to the department. In addition, the old reports required that associates manually determine which shoes were missing from the floor. Now, reports can be generated from a PC in the department, so they are immediately available and show exactly what is missing from the sales floor.
As a result of its success with the RFID system in New York City, Lord & Taylor has rolled out the solution to all 48 of its stores within the United States. It has also begun a pilot rollout at Hudson's Bay, its sister store in Canada.