From Manolos to Guccis, a European shoe retailer hopes to stomp out theft and kick-start sales by putting RFID tags on every pair of high-end shoes it sells. RENO, Europe's second-largest shoe retailer, plans to roll out RFID technology at 700 stores in six countries by the end of May. The company is using new digital radio-frequency (NDRF) technology.
"Not only should NDRF goods tagging help us to effectively reduce losses, it should also further improve the shopping experience for the customer," says Hans-Werner Königs, RENO's divisional manager of organization and goods control. "There are many advantages to effective goods tagging. After all, every item that's stolen has a direct effect on a company's operating result."
Checkpoint Systems is working with RENO on the source tagging program. According to Checkpoint, RFID tags are integrated directly into the shoes, so that shoes can be displayed in pairs and in boxes for customers to select themselves, without the danger of theft.
RENO also has plans to further optimize both its market presence and its operational processes. "To be successful in the shoe retail trade, the goods have to be presented in the right way. As well as displaying shoes in pairs and in boxes, an open shop construction is also particularly important," says Königs. Improvements in the business process include simpler deactivation of the tagged goods at the point of sale. That will speed up the cashier transaction as well as eliminate the risk that a customer will leave the store with a tag that's accidentally been left activated, thereby triggering a false alarm.
"RENO's decision for radio-frequency source tagging is a further step toward a uniform standard in security technology," says Ulrich Schäfer, vice president and general manager at NCE, a unit of Checkpoint Systems. "For retailers, radio-frequency source tagging is the best option for reducing the costs of shrinkage. At the same time, they are able to create a customer-friendly shopping atmosphere, which will help to boost sales."
By the end of May, the system will be rolled out at stores in Germany, Austria, Switzerland, Slovakia, Czech Republic, and Hungary. In the future, the millions of tags required by RENO will be provided via CheckNet, Checkpoint's service and tagging platform. The wafer-thin tags, designed especially for shoes, will be supplied to production locations in the Far East.
"From a strategic point of view, as any other retailer, we 'dream' of fully automatic goods and date tracking—from the supplier to the branch. What's more, we'd like to make work processes as simple as possible for our staff working in the branches," says Königs.
Several other retailers are chasing the RFID dream as well. Marks & Spencer, another European retailer, is aggressively pursuing an expansion of item-level tagging for its apparel lines. Japanese retailer Mitsukoshi has turned to RFID to increase sales at its stores in Tokyo, where the technology helps customers find the right size shoe. The technology is used at seven locations across the country, and the retailer reports that sales have increased by 13 percent since the tagging program began.
South Korean auto manufacturer Hyundai/Kia Motors wants to know where its automotive parts are, and the company is turning to RFID for the answers. Last month, Hyundai/Kia began using the technology to track auto parts from more than 200 suppliers.
Glovis, the Korea-based third-party service provider in charge of supply chain management for the automaker's parts, has begun receiving RFID-tagged boxes of parts and will track them as they move through the supply chain—from delivery to the distribution center, through repacking and shipping to an overseas DC, to final delivery to the Hyundai/Kia Motors factory.
With partner support from the South Korean Ministry of Commerce, Industry and Energy, approximately 130,000 RFID tags will be applied to parts boxes and packaging cases for exportation to Hyundai/Kia Motors' factory in Alabama during the project's first phase. During phase two, 20 million RFID tags from UPM Raflatac will be used annually to track all boxes and containers of automotive parts through the supply chain.
UPM Raflatac, which is supplying the tags, recently announced that it is doubling tag production capacity at its Finland plant. Company execs expect to be able to produce several hundred million tags annually at both the Finnish plant and one in the United States.