News

American Apparel sees big benefits from RFID

August 2, 2011

RFID technology is demonstrating its worth to retailers. A post on LP Magazine cites an RFID pilot program conducted by American Apparel, first reported in the RFID Journal. According to the story, American Apparel launched a fifty-store pilot program last year using RFID-embedded hangtags to all items consigned to RFID-enabled stores.

The results provided some clear evidence for the value of implementing RFID for inventory and supply chain management.

"The ROI on RFID-enabled stores is no more than six months. Stores that are using the RFID system have proven to reduce shrink, improve stock levels and reduce [employee] turnover," American Apparel's VP of technology Stacey Shulman said in the article.

According to the report, 100 percent of the RFID stores also outperformed the non-users in revenue. Monthly comparable store sales showed RFID stores averaged a plus 6 percent, compared to a plus 3 percent for stores not using RFID.

LP Magazine said the pilot program included some applications meant to test RFID for uses other than inventory and supply chain management. According to the post, the operating software used in the pilot is able to tell if merchandise is located on the selling floor or in the stock room. This allows store associates to monitor quantities available on the floor for customers.

Additionally, the RFID technology reduced internal shrinkage as well. Overall, in stores where RFID was used in conjunction with electronic article surveillance (EAS) for external theft, total shrinkage was reduced by as much as 75 percent.

Due to the success of the pilot program, the post says American Apparel is expanding the program to an additional 50 stores.

American Apparel is based in Los Angeles and has 258 stores in twenty countries.