Larger RFID effect than expected at Computer City
Inventory management with Shop Protect that use RFID – Radio Frequency Identification – has reduced the differences in status by 80% at the Nordic electronics retailer Computer City. At the same time status counts faster and more accurately. The result is that the overall benefits in time and money is much higher than expected.
Computer City will – based on the very positive results from the one-year pilot project in its Glostrup Store – also introduce RFID tagging in the chain’s other 9 shops. And thus reap the full benefits of the new technology.
Scan several hundred items at a time
RFID is an electronic tagging – tag – that can be scanned / read via radio waves. A more advanced labeling than the barcode, a hand scanner wirelessly reads hundreds of tagged items with one click. They do not need to be scanned one by one as the EAN. On the other hand, the label is more expensive per product.
-“We quickly found out that the RFID tag on the goods provides a unique opportunity to identify every item and follow its history. And the exact inventory management has been the key to reducing shrinkage”, says Michael Hansen, IT manager at Computer City.
Stocktaking in minutes
- “Every morning we count all items in stock and store. This is done with a quick and simple scanning. One click and a whole storage rack are counted. Without counting errors.
- If the count indicates a deviation, we can now trace the item and error. The record shows exactly the product that was missing. For example, PC from NN serial xx and RFID No. yy.
- The system shows where, when and who has moved the item with the missing RFID. If it is from the warehouse, at the register or …”
- “If goods are missing because of internal differences or shoplifting, we can track it and respond. We have expanded the RFID system by integrating it with video surveillance. Thus we have a video clip that shows when the RFID tag passes scanners, and we can see who it is. If the item simply has been misplaced, the scan will also reveal it.
- This means that we know exactly what is the cause and can react, so that it will not happen again. When shoplifting happens, we also have a 100% documentation for the product, serial number, etc. – And a picture of the thief as evidence to the police”.
Lack of inspection deadlines
-“The temptation can be too big if employees sense that there is no control of anything. Here we have 100% control of all products. Every day. And our employees know this. Previously it could take up to three months – at the next stocktaking before shrinkage was found. And that is why a dishonest employee could believe that there was free rein”.
Focus on efficiency and cost savings
The system is called Shop Protect, and the RFID ‘label is used for inventory management, production and retail among other things to keep track of items and values and theft.
“Companies have, especially in this time, focus on cost savings and efficiency improvements, and RFID is the next step in the process,” says CEO Michael Jensen, 2Trace, who delivered Shop Protect solution to, amongst others, Computer City. He adds: “Shrinkage Reduction and saved time is probably the greatest economic gains. But a 100% management of the inventory also means better client service. You are never in doubt whether you have the product that the client wants to buy”.
Shop Protect is designed specifically for retail chains and is an advanced integration of the three systems: Storage, video, and security solution. The core is 2Trace’s RFID Warehouse Management solution. Its flexible and scalable structure makes it useful in all industries and sizes of chains.
At the start of RFID, ComputerCity calculated that savings and efficiency improvements could repay the investment within 24 months. But the effect has been greater, so ROI is down to only 18 months.
“We could work out what it meant not to have to pay seven employees to count goods for an entire Sunday, three times a year,” says Michael Hansen, Computer City. He adds: “When the ROI is better, it is because Shop Protect has a much greater effect on shrinkage and provides better working routines.”
Computer City expects that the system will be relatively quick to implement, now that they know the software and the routines.
Efficiency improvements and cost savings by RFID in stores does not end here. Computer City can for example use the label to manage price tags and information on the electronic shelf labels. By placing a reader on the shelf it can retrieve information from the RFID and show it to customers. And if prices or other information are changed, this can easily be controlled from the back room.
A future perspective is to intensify cooperation with suppliers. Computer City has a supplier portal as part of their Shop Protect solution, allowing suppliers to login and follow the sales and warehouse status of their RFID-tagged goods.
The product is tagged!
Each item will be marked / tagged with its own RFID ID. As a car has its own license plate. The product, for example a laptop is thereby an individual, recognizable laptop, and not only among all of the same type in the warehouse.
The radio-borne ID number can be monitored electronically. At goods delivery area a scanner detects that a product with an RFID tag passes. This starts the product’s history in the storage system.
A new PC has arrived and placed on the shelf. The stock count carried out daily shows that it remains on its shelf. When the PC at some point is moved from the warehouse to the store the scanner placed on the door detects this movement. Just like in the warehouse, there are daily scans of all goods in the store – At Computer City it takes 15-20 minutes to get all the way around and count the 2,000 goods.
The RFID system detects that the PC is on the sale shelf, as it should be. The final stage is when the customer has paid for the PC and is about to carry it out of the store. A scanner in the door detects that the PC is now leaving the store.
The special feature of RFID is that all steps are recorded and can be followed. The entire history is stored and available.