Rolling out the use of radio frequency identification (RFID) tags at River Island boosted sales and massively increased the accuracy of stock counts, a conference was told.
Martin Goldstein, head of procurement at River Island, said stock accuracy rose from 72% to 97% after the company started using RFID tags on most products.
Speaking at ProcureCon Indirect in Copenhagen, he said 10 years ago RFID tags cost $10 each but now they were less than 10 pence.
He said previously they carried out a stock count once a year and it would take a day.
But following an 18-month trial they rolled out tags to all garments. Counts now take place on a weekly basis – taking one to three hours – and sales have increased by 5%.
“Within six to eight weeks we had more accuracy and an increase in sales,” he said.
Goldstein said stolen goods got replenished more quickly and stock-keeping units “critically out of stock” were down by 11%.
He said suppliers now put tags on items while “tagging parties” had taken place in stores to attach them.
Goldstein said technology had an important role because “some retail lines have a shelf life of two weeks”.
But procurement professionals had to be wary of going too fast with technology.
“You mustn’t put in technology for technology’s sake and you mustn’t put too much into a business at once. You need to prioritise,” he said.
He said procurement needed to partner with other functions. “We are people who are experts in the business and can help you [stakeholders] achieve your goals, and work to achieve goals together,” he said.