15.12.2020
More and more fashion brand suppliers are relying on the benefits of RFID. Among the 30 largest European suppliers in this area, more than two-thirds are already using the technology.
In the fall of 2020, the trade magazine TextilWirtschaft published the ranking of the largest European fashion brand suppliers by sales (based on the year 2019 or the corresponding fiscal year). It is striking that a large proportion of the top-ranked brands use RFID. What is particularly remarkable, however, is that the majority of the companies in this field that use RFID technology have also increased their sales compared to the previous year, in some cases significantly - in other words, they have been more successful than average.
First place in the ranking is occupied by Inditex from Spain. With brands such as Zara, Massimo Dutti, Bershka, Pull & Bear and others, the company generated 28.3 billion euros, around 8.2 percent more than in the previous year. Inditex has been using RFID for several years and has equipped all Zara logistics centers and hundreds of stores with RFID technology. For Pablo Isla, CEO of Inditex, the implementation of RFID is "one of the biggest changes in the way we do business - the most successful investment in the company's history." For Isla, it is also clear that the group's investments in stores, logistics and technology have been the basis for the good sales results.
This certainly makes Inditex one of the pioneers in fashion retailing. But numerous other brand suppliers such as Adidas, Bestseller, Burberry, C&A, Calzedonia, H&M, Hermès, Kering, LPP, LVMH, Mango, Marks & Spencer, Moncler, Mulliez, OTB, Pentland, Prada and Tommy Hilfiger have also been using RFID to process crucial information in their business operations, and some of them have been doing so for longer than Inditex.
The sports retailer Decathlon, which belongs to the French family-owned company Mulliez, and the Polish group LPP (Reserved, Tallinder, etc.) answer the question of whether RFID has made a positive contribution to the companies' sales development with a clear "yes". LPP from Gdansk had even proclaimed 2019 as the RFID year for the group brand Reserved. The group increased sales by 12.6 percent. The situation is similar at Decathlon. In Germany, the French brand was able to increase its sales by 26 percent.
RFID technology enables each item of clothing to be individually identified using radio frequency waves. The corresponding information is stored on a chip, the RFID tag. Retail companies that use RFID can thus not only permanently evaluate inventory information from the stores, but also optimize their entire logistics chain. This has concrete implications for the fashion customer, or as Nike CEO, Mike Parker, said in August 2019: "RFID is quickly becoming the most precise tool in our arsenal to meet the specific needs of an individual consumer at exactly the right time." Put another way: The secret to success is having the merchandise you need in the right place and available at all times - unless the collection is sold out everywhere.
Certainly, RFID is not solely responsible for the success and sales increases of the most successful European fashion brand suppliers, but in the competition for customers willing to buy, RFID-supported inventory management obviously occupies a key position in the fashion business. After all, customers buy where they want and only when the goods are really available. This is precisely why omnichannel commerce is now an important driver for the use of RFID.
