Moving from RFID proof of concept to large-scale rollout takes careful planning. In my experience, when implementing a project across multiple store locations nationwide or worldwide, it’s an important to consider different factors that may not have been part of the original pilot. Here are the five most important factors to keep in mind:
Factor #1: Store Locations & Store Formats: Most likely, all of your stores are not the same, and may vary widely by geography. Some are large format, others small, depending upon retail concept, target market or urban/rural location. Different locations may have different local regulations, backroom capabilities and merchandising requirements. An urban location may not have the square footage to store large quantities (or multiple selling days) of inventory.
Planning Considerations: RFID system hardware should match variations in store design. For example, luxury concepts or open entrances may need to use overhead systems instead of pedestals at the point of exit. Within each region, you may also find infrastructure variations because of electrical and construction codes, as well as operating requirements. Operating hours may also vary — while some retail outlets may maintain standard store hours, others may remain open 24/7. The bottom line is that when it comes to RFID, one size simply doesn’t fit all. One example that comes to mind is a rollout I managed in Europe. We quickly uncovered significant variations between Western and Eastern European regions, including local laws that regulated the frequencies RFID could use. We also needed to accommodate the fact that third-party service providers (including electrical and general contractors) were often certified to work in some regions, but not others. Understanding these challenges and planning for them upfront proved to be a lifesaver.
Factor #2 Connectivity: As an extension to factor #1, based on differences in geography and infrastructure, you may not have the same levels of connectivity across store locations. As a result, you won’t be able to count on data being sent to a central system on a regular schedule.
Planning Considerations: Based on the scope of the rollout, you might consider a hybrid architecture (utilizing a combination of local data collection, centralized servers and cloud-based instances) that can accommodate different levels of connectivity. My experience has been that this is more common than expected and, when it happens, you may need to place local PCs/appliances in sites with low/no connectivity and consider procedures that will maximize integration with the system of record.
Factor #3: Store Operations: Store operations processes can vary widely from store to store, due to local regulations, how much latitude store managers are given and the different types of stores they operate.
Planning Considerations: Some retail chains encourage store managers to be entrepreneurial and allow them to work around formalized corporate processes. This may include being able to order more merchandise that sells better in their specific store. Or managers may be given more latitude driving replenishment for faster moving merchandise. Even the fact that many urban store locations have smaller backrooms may require that they be able to replenish more quickly to avoid out of stocks. As such, different business rules may be needed for different stores.
I recently managed a retailer’s rollout in Belgium and encountered a local law that restricted when promoted merchandise could be put on the floor prior to the sale, and how much needed to be on the floor when the promotion began. Other regions had their own restrictions, so we needed to take these factors into account for replenishment and markdown processes. Bottom line: It’s important to address variances in store operations before putting process automation in place – you may be automating a process that is completely different in the real world than how it is documented on paper.
Factor #4 Employee Culture: Because of culture differences, what works in one area doesn’t necessarily work in another. So certain types of technology or processes may be embraced — or avoided.
Planning Considerations: This is another area where interviewing store managers beforehand can help you anticipate and plan for regional variations. At the same retailer, it’s not uncommon to encounter multiple approaches to inventory management. For example, at a recent project, stores were supposed to perform replenishment at a certain time of day and then cycle count. The next day their cycle counting replenishment was updated. But some managers found that if they did a full cycle count, their replenishment list could be reduced. So they came up with a process whereby as merchandise moved from one location to another, they would do mini cycle counts. The next day their replenishment lists were much smaller and more manageable. Knowing this enabled us to design a solution that accommodated these different approaches.
Factor #5 Change Management: RFID data continually uncovers new information, so what works at the beginning of the enterprise rollout, doesn’t always work at the completion of the project.
Planning Considerations: RFID provides retailers with real-time inventory, logistics and consumer data, allowing them to access information they never had before. Once RFID data starts informing daily reports and systems of record, it starts affecting decisions at the store and corporate level. As a result, RFID rollouts are a continuous process that requires change management. So during the rollout, be prepared to adapt. Examine KPIs to see what is working and what isn’t. As the number of store implementations increase, perform pattern analysis to determine why some stores are more efficient than others. This analysis should help draw out discrepancies so you can apply change where and when needed. In one retailer’s case, we had begun RFID rollouts at smaller stores that carried up to 15,000 items, and later began working with larger retail outlets, which may have had 400,000 items. That’s a huge difference and it became clear that the receiving process for this larger class of stores had to be simplified. We adjusted the process, and things proceeded more smoothly.
There are, of course, other factors in planning an RFID project. But if you plan for these, you’ll have fewer surprises along the way – and more successful enterprise rollouts.
Sarabjeet Chhatwal is Senior Director of Professional Services at OATSystems, a division of Checkpoint Systems. He has been involved in 100+ RFID retail and manufacturing deployments over the last decade. Sarabjeet was the project lead for the retail industry’s first bulk encoding RFID solution at a vertically integrated European retailer