ISA Boutique's RFID solution does more than inventory management

China retailer, ISA Boutique's adoption of RFID has seen a quick return on investment through efficient management of inventory as well as providing insight into consumer behavior.
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China’s ISA Boutique is installing a RFID inventory management system at one of its stores, after determining that the technology provided valuable data following an initial installation at another location. The RFID readers and antennas, enables asset tracking of its fine jewelry and to know not only what is stocked within the cabinets, but also when a particular piece is removed from the cabinet and returned—and how often—thereby providing analytics into consumer behavior.

ISA Boutique operates seven stores in Hong Kong and two in Macau, where it sells clothing, leather goods, eye wear, jewelry and watches. In 2012, the retailer began working with its point-of-sale (POS) software provider, to create an RFID inventory management system, as well as for tracking consumer behavior and the products they seem to prefer. They outfitted each of the store’s jewelry display cabinets with a single 16-port RFID reader and a total of 16 ultra-thin RFID antennas—one for each of the reader’s port. The antennas were situated on the cabinet’s shelving on which trays filled with jewelry are placed.

ISA Boutique replaced its traditional price tags with EPC Gen 2 ultrahigh-frequency (UHF) RFID labels, attaching the RFID version to each item via the tag’s loop antenna. The system employs RFID tags provided by a variety of vendors, and the store has attached those tags to hundreds of jewelry items, including rings, pendants and earrings, as well as to eyewear. Each tag’s unique ID number is linked to the specific item’s stock-keeping unit (SKU) in a Smart Shelve software, hosted on ISA Boutique’s server. It is then stored on a tray that is placed within a display cabinet during store hours.

According to the company, the reader antenna is designed to provide a very tight read zone. If an item is lifted more than 12 inches above the antenna (the read range can be adjusted by raising or lowering the power setting) or moved 3 inches to the side, the shelf antenna will no longer detect its tag, and the reader data will thus indicate that the piece has been removed from the cabinet. The glass of the cabinet top also acts as a shield, so that if an item is placed on the glass counter above the antenna, its tag will not be read. This asset tracking feature is especially important for ISA Boutique, as the retailer wants to know each time an item is moved from the shelf tray to be sampled by a customer, and also the exact time that it was returned to the tray. The antenna is 6 millimeters (0.2 inch) thick, and is available in a variety of lengths and widths.

The store has also installed a reader with an integrated antenna at the cash register, in order to record when a piece of jewelry is purchased. The item’s tag is interrogated during the sales transaction, thereby enabling the store to identify which merchandise needs to be reordered to replenish inventory.

As each item’s tag ID is being captured by a cabinet’s reader, its location is noted in the Smart Shelve software, which can be configured to issue a security alert to management—via text message or e-mail—in the event that an item is removed and the POS software does not indicate it as having been sold. In addition, the store is using a handheld reader to conduct nightly inventory checks in the backroom and other areas.

ISA Boutique has recouped its investment through higher sales, based on fewer out-of-stocks and has also gained valuable information on consumer behaviour with RFID. For example, if a piece of jewelry is often removed from the cabinet, but is only rarely purchased, management may decide the price is too high for most customers. If no one requests to see a piece of jewelry at all, it may be that it is not properly displayed, or there may be another issue making it undesirable to shoppers.

ISA Boutique is installing this RFID inventory management system at another of its Hong Kong stores this summer, and is also expanding the technology to include watches, handbags and clothing, by attaching EPC UHF tags to those items as well. The company plans to continue rolling out the solution with each new store renovation or acquisition.

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