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La Chapelle Deployed Century's RFID Technology to Solve the Retail Inventory Problem
The retail inventory problem is shrinkage. Loss of inventory can occur at any stage of the supply chain, from manufacturing to transportation, and most commonly, at the storefront. This issue isn't cheap—it costs retailers an estimated $49 billion each year. For the average retail brand, the value of stolen products is the equivalent of 2 percent of total sales revenue.
The National Retail Federation's (NRF) annual study on shrinkage confirms that brands need end-to-end visibility and oversight from the moment a piece of apparel, jewelry or other retail product is manufactured. NRF states that, in the last year, the theft occurred for these reasons and with these frequencies:
Shoplifting: 38 percent
Employee and internal theft: 34.5 percent
Vendor fraud, errors and other reasons: 27.5 percent
Retailers Need Inventory Oversight
In order to protect your revenue and brand reputation, your organization needs to gain total control over your inventory at every stage of the supply chain. RFID technology enables your logistics center to develop remote control. Today's technology provides retailers with a wide array of options, including embedding RFID clothing tags into items at the factory or adding RFID apparel hard tags for anti-theft measures in the store. While shrinkage is real and costly, your company can effectively solve its part of the $49 billion problems.
Why Retailers Are Going Omni
From the perspective of customers, omnichannel retail appears seamless because they don't notice a difference in experience between your stores, your mobile app and your e-commerce website. By definition, omnichannel retail seamlessly blends your locations and technologies into a single customer experience. This could mean arming your sales associates with tablets to answer customer questions about sizes in-stock, or it may require developing the logistics power capable of fulfilling online customer orders at stores for local pickup.
A recent article in the Harvard Business Review states "there is significant economic value to be gained from... fusing the shopping experience across channels." With RFID technology, Auburn research has found an average uptick in inventory accuracy to 95 percent from the average baseline of 60 to 65 percent. Total inventory visibility doesn't just prevent shrinkage—it also delivers a customer experience that feels completely integrated.
Are You Fighting the Counterfeit Retail Supply Issue?
By all accounts, the global counterfeit problem is getting much worse. Today's customers are savvy and highly conscious of product quality. Not only is it challenging to win back the trust of former customers, but your average dissatisfied buyer will also tell nine to 15 friends about a negative experience. The visibility you gain with end-to-end RFID protects your customers from manufacturers, vendors and transportation personnel who may attempt to pull a bait-and-switch with counterfeit products.
Why La Chapelle Adopted RFID
For Chinese Brand La Chapelle, using Century's RFID technology protects their brand integrity at every stage of the retail supply chain, from the factory to their 1,500 stores in China. By sewing Century's RFID fabric label tag (CE34100) into apparel, the brand's logistic center is empowered to track inventory throughout manufacturing, product testing, delivery and sales.
In La Chapelle's case, RFID technologies have significantly reduced lost revenue. In addition to real-time updates, they've gained efficiency, watched shrinkage dwindle at every stage of the process and unlocked a real-time product count.
One analysis of a major U.S. apparel brand found it took just 4.5 months to earn back its initial investment in RFID. This ROI included labor savings of nearly 190 hours per month at each RFID-equipped store and fewer out-of-stock items. Ultimately, the brand scored a 14-percent increase in sales.
In the retail industry, everyone benefits from the total inventory oversight enabled by RFID tech. Your logistics center will make better real-time decisions, and your revenues stand to increase due to smarter distribution and happier customers, who will be thrilled with the quality of your omnichannel experience.