Gina Tricot’s CEO on how RFID and other new technologies are transforming retail
Hard work to implement new systems pays off, according to Ted Boman.
By JOHAN MAGNUSSON
October 12, 2022
Last year, a McKinsey insight article, named RFID’s renaissance in retail, stated that with advances in readability, range, and cost, RFID stands poised to address today’s need for more data-driven, more accurate, and more customer-driven shopping experiences. ”We believe radio-frequency identification (RFID) has the power to unlock up to 5 percent top-line growth from better stockout management and shrinkage reduction as well as to achieve a 10–15 percent reduction in inventory-related labor hours,” McKinsey stated.
Aiming to create an ”ultra-modern, omni-focused retail destination” — to use Gina Tricot CEO Ted Boman’s own words — for its new concept store in central Stockholm, the retailer adjusted the RFID system they work with to fit its business model.
— We integrate our RFID tags already in production and collaborate with an RFID reader supplier, he explains. Therefore, because of this development, we can now integrate our omni and AI allocation systems. By implementing RFID in all our garments, we, first of all, made it easier for our staff to do the regular inventory check. However, RFID also gives great side effects when it comes to developing omnichannel integration. By having an almost real-time updated inventory in our stores we now can connect our online directly to our stores’ inventory. By knowing the inventory levels with high certainty, we are able to keep our customer promise and can now launch online services such as Reserve in store or Buy online and the product is ready to be picked up by the customer in one of our stores within an hour.
What did you learn from it?
— There are many new internal processes that need to be adjusted due to the new technology. Such new processes can be how to ensure that online orders that are to be collected at Store are not included in the store’s sellable inventory or how to identify shipping deviations before unpacking deliveries. I’d recommend setting up a test shop where staff can train. This helps the rollout process later, you will quickly find differences in how the system is used in practice compared to theory. And RFID is not a one-off, it needs continuous development both in hard wear and tech development to improve efficiency, says Boman. He adds:
— We have also done projects with NFC for tagging product information such as sustainability data on a certain garment.
In general, how do you think that tech solutions should be used in retail?
— I think our stores will become integrated and part of our online warehouse solutions. Here we will provide services such as Buy online and getting home delivery from a store the same day — or, even better, within an hour or two. There are also great sustainability gains in this process, where we will move inventory more frequently from one store to a store that has a higher demand or into a customer online order. This will lower the risks of inventory getting obsolete and make our stores part of the online infrastructure, says Boman, continuing,
— We believe a lot in the meeting between our retail staff and our customers — the touch point where the customer can get service and support. For us, if tech can free more time for our staff or provide them with tools that allow them to focus even more on the customer meeting, we feel that tech adds to the brand and the experience of purchasing at us. I think we will see more and more shopping start online but finalized in a retail space. When looking ahead, I see stores that focus a lot on service both in-store but also in terms of packing products and communicating with customers through different social platforms. Stores will be an online extension and vice versa.
You have a younger target group, what’s important to think about when reaching out to them?
— Corporate transparency supported by digital platform services will be anticipated. Platforms where the customer easily can find data and information about the product, production footprint or services like opening hours or topics such as integrity policies, will be expected and a business standard.
Speaking of production footprint, Gina Tricot will be one of the first to collaborate with Coloreel’s embroidery technology this December.
— It will give the customer customization options and add personal value to our products. At the same time, it’s a much more sustainable embroidery alternative with Coloreel’s new colouring technology.
— Radio-frequency identification (RFID) has ”the power to unlock up to 5 per cent top-line growth from better stockout management and shrinkage reduction as well as to achieve a 10–15 per cent reduction in inventory-related labour hours”. (McKinsey)
— The RFID technology gives great side effects for developing omnichannel integration — having an almost real-time updated inventory in the stores makes it possible to connect the online store directly to the store’s inventory.
— When implementing new technologies in retail, setting up a test shop where staff can train helps the rollout process later and you will quickly find differences in how the system is used in practice compared to theory.