RFID In Retail Neco Can Vice President - Partner ATTEVO Inc.

What is RFID? Radio-Frequency ID Valuable business and technology tool Provides REAL TIME data capture Can replace existing technologies like the bar code Radio-Frequency ID Valuable business and technology tool Provides REAL TIME data capture Can replace existing technologies like the bar code

How Does RFID work? Existing Data Collection System An RFID system is a reader and a tag communicating over the air at a certain frequency. An RFID system is a reader and a tag communicating over the air at a certain frequency.

Why Implement RFID? RFID technology gives us the ability to identify the location of each and every item without having to see it physically offering tremendous insight into inventory. The results Ability to provide the right product in the right place at the right time due to almost perfect data integrity. The benefits Significant increases in: Cost Savings Competitive Advantage Customer Satisfaction Security

RFID Applications- Retail Supply Chain Retail Applications Vendor Applications Logistics Applications Receiving Applications Store Inventory Applications Customer Service Applications

Retail Applications –RFID Vision for a Retailer Factory Freight forwarder/ consolidator De- consolidator Distribution Centers LogisticsStores 4. Distribution Center 3. Transport Cargo Security Cargo Tracking 1. Creating a Data Carrier Pallet & “Container” tags RFID tags are shipped to Manufacturers To attach to merchandise RFID IN THE RETAIL SUPPLY CHAIN 2. Manufacturers Encoded data stays with product during lifecycle Tags are attached to merchandise items 5. Retail Store

Vendor Applications Apply RFID tag to unit RFID tag sewn into unit RFID tag within current hang tags

Logistics Applications Carton Units Pallet Container See What’s Inside Without Opening!

Existing Data Collection System Receiving Applications Multiple tags Read and write Unit or container level No orientation issues 100% vendor audit for quantity

DOCK 4 8 ft. 10 ft. Existing Data Collection System Shipping Applications Doorway coverage Identifies units, cartons, pallets Identifies forklift Removes operator error

Store Inventory Applications Back Room Monitor Increments, Decrements Shelf Inventory Shelf Units Area Stor e Store visibility at the unit level Keep correct sizes stocked Take inventory

Scanning Backroom

Customer Service Applications Store Shelf Denim Shelf Units Area Store Search for specific size:..Sales floor, Up stock, Backroom Audible indicator when select unit is scanned Reduction in Lost Sales!

Customer Service

Restocking

…And The Rest of The Benefits üMass scan at checkout üLoyalty cards üReturns üOrder on internet pick up at the store üCustomer family sizes üWish list data üCredit cards üPossible elimination of bulky sensormatic tag üEnable EAS on more units Allow identification of loss at unit level

Business Case RFID Pilot ROI Proof of Technology Executive Ownership As-Is and To-Be Process

Retailer 1 - Pilot Results DC to Store Shipping and Receiving AccuracyDC to Store Shipping and Receiving Accuracy 96% accuracy from allocation to pick 97% accuracy from picking to shipping (see graph)96% accuracy from allocation to pick 97% accuracy from picking to shipping (see graph) 100% tracking from warehouse to store100% tracking from warehouse to store

Retailer 1 - Pilot Results Store Inventory Accuracy Over 99.6% store inventory accuracy “Nearly Perfect Sales Floor Inventory” Replenishment reports are generated every hour Identified SKUs needed for floor as soon as the cartons received to maintain perfect inventory levels on sales floor Over 50% of the replenishment flow - back door to sales floor

Retailer 1 - Pilot Results Khaki Sales Denim Sales Khaki Sales to Denim Sales ComparisonKhaki Sales to Denim Sales Comparison Tracked the sales of select Khaki SKUs to determine sales trends for each storeTracked the sales of select Khaki SKUs to determine sales trends for each store Khaki did not have RFID tags in any store including pilotKhaki did not have RFID tags in any store including pilot Denim Sales Activity -As a result of nearly perfect data integrity and timely sales floor replenishment, initial Data Indicates over 5% increase in Adult denim sales when compared to control stores.

Retailer 1 - Pilot Results Mens Women's Sales Floor vs. Backroom Stock LevelsSales Floor vs. Backroom Stock Levels Weekly audits in the control stores - floor vs. backroomWeekly audits in the control stores - floor vs. backroom Average 12% of Adult Denim SKUs are out-of- stock on sales floor but available at backroom in the control stores - as high as 85% by styleAverage 12% of Adult Denim SKUs are out-of- stock on sales floor but available at backroom in the control stores - as high as 85% by style In some cases, multiple audits indicate the same SKU is out-of-stock on the sales floor but available in the backroom for 21 consecutive daysIn some cases, multiple audits indicate the same SKU is out-of-stock on the sales floor but available in the backroom for 21 consecutive days During same time period the pilot store maintain perfect sales floor inventoryDuring same time period the pilot store maintain perfect sales floor inventory

Retailer 2 - Pilot Results Denim OnlyDenim Only RFID Tags attached at vendor and SKUs assigned at DC receivingRFID Tags attached at vendor and SKUs assigned at DC receiving Simple SKU-RFID relationshipSimple SKU-RFID relationship Stores know only what they should haveStores know only what they should have No changes on legacy systemsNo changes on legacy systems Tracking vendor compliance, DC accuracy and store replenishmentTracking vendor compliance, DC accuracy and store replenishment Payback justification - seven additional unit sales per month per storePayback justification - seven additional unit sales per month per store Pilot stores are showing additional 13 unit sales per store per weekPilot stores are showing additional 13 unit sales per store per week Store accuracy is over 98%Store accuracy is over 98%

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