Karstadt Deploys Item-Level RFID

Karstadt is improving inventory management through the use of RFID.

When Karstadt, Düsseldorf, Germany, was ready to jump into an item-level RFID (radio-frequency identification) program to manage its apparel category, the chain opted for a flexible Gen 2 solution that promises to deliver more accurate inventory management, improve merchandise visibility and streamline shipment reporting capabilities.

Kardstadt is known for the advanced technology it deploys across its 86 department stores and 32 sporting-goods stores, but it always remains mindful of embarking on disciplined, pragmatic projects. When it planned to move RFID down to an item level, it avoided conventional, yet complex, high-cost solutions, and instead chose the Sensormatic iREAD RFID platform from ADT Security Services, a division of Tyco International, Boca Raton, Fla. The solution, which is based on the EPCglobal Gen 2 standard, will support global interoperability and allow the company to simplify the installation and data distribution of the system across its enterprise.

The chain tested the solution in its 30,000-sq.-meter Düsseldorf store in October. The retailer installed tag readers at the store’s point of receiving; between the back room and front of the store; on shelves; within mobile inventory-management devices; and at the point of sale. Next, the chain added RFID tags to its private-label Goood Jeans line, including jeans, jean jackets, shirts and sweaters.

As RFID-tagged merchandise enters the store, managers can stay abreast of where individual items are located within the store in real time, as well as which styles and sizes are selling best. With real-time access to inventory levels, managers can also instantly order merchandise and avoid out-of-stock scenarios.

“Initial deployment was easier and ongoing operating costs are lower [than other Gen 2 systems] since there is minimal hardware to power and maintain,” said Rainer Jilke, Karstadt’s RFID manager and departmental head of process organization purchasing. “We expect to quickly move toward a positive ROI.”

Karstadt expects the system to speed up inventory management, improve inventory accuracy and visibility in stock levels, and automate reporting. Each benefit will improve efficiencies and operating margins, and enhance the customer shopping experience.

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