RFID Talk Blog

Why RFID should be a slam dunk for Champs Sports

Earlier this year I blogged about my experience buying a pair of shoes at a Clark’s shoe store in Massachusetts. At the time I didn’t think I’d come across an example that screamed for item level RFID more than the need for Clark’s to have better visibility into its back room inventory.

The folks at Champs Sports may have trumped my experience at Clark’s. Shopping for a birthday gift for a teenage nephew recently, I came across a Derrick Rose t-shirt, who so happens to be my nephew’s favorite basketball player. The perfect gift!

Out-of-stocks seem to be a major issue at the Champs Sports retail chain

To my dismay, the six shirts remaining on the sales floor were all size XXL. That’s right — no small, no medium, no large, or no extra large. By not deploying item level apparel tagging, one of the largest mall-based specialty athletic footwear and apparel retailers in North America is missing a major selling opportunity.

The particular shirt I was interested in retailed for $30. So figuring that four customers were turned away that day because their size was not available, that’s $120 in missed revenues for that shirt — for one store.

Intrigued by this, I began to check other shirts as well (this is where the RFID geek in me shines!). Again, I came across another style shirt that only had XXL in stock. So, add another $120 or so in lost revenues.

I am sure that this problem is not unique to the store in Braintree, Mass., where I was shopping. According to the Champs Sports web site, the retail chain operates 552 stores in the U.S. and Canada.

Assuming that the chain’s inventory visibility is poor chain-wide, and that the out-of-stock issue is commonplace across all stores, some simple math suggests that the retailer lost $66,240 in revenue from one SKU. I was unable to find out how many SKUs Champs stocks, but the store is notorious for its large selection of wildly popular sports shirts and apparel items.

If the Derrick Rose out-of-stock problem was repeated at just 10 other stores (remember, I found two without even trying), the lost sales total jumps to more than $660,000 chain-wide. Increase the out-of-stock issue to a 100-store problem and you’re potentially looking at $6.6 million in lost revenues.

Here’s the scary part: if the out-of-stock issue is so rampant for t-shirts that sell for about $30, imagine the lost revenue on the sneaker side of the equation, where some brands at Champs retail for as much as $250 a pair.

There is widespread belief that specialty stores like Champs and Clark’s are the next big adopters of item level tagging. Let’s hope that is the case.

Click here to view RFID 24-7′s previous coverage on item level tagging in the apparel sector.

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