- The men’s shoe manufacturer used a retailer’s RFID mandate as a catalyst to implement an inventory management system that identifies each product as it is placed in and removed from the warehouse.
- Using RFID4U technology, Carrucci has achieved the inventory accuracy needed to enable online purchases through its website.
When Carrucci Shoes began requiring retailers that sell its products to adopt RFID technology last year, the company faced a choice: either tag goods en route to the retailer and simply bear the associated costs, or use the technology to its own internal advantage.
The shoe brand has chosen the latter option and uses the RFID tags it integrates into each packaged pair of shoes to automate the receipt and shipping of its goods.
The data from the RFID4U solution, known as TagMatik’s Wedge, not only helps ensure the right products are delivered to customers, the retailers, but also enables Carrucci to achieve the high inventory accuracy required for e-commerce sales. The solution is designed as a low-cost application that is free to download for up to 500 scans and features a “Success Center” for live chat and ticket-based support.
Since the RFID system went into operation in May, the shoemaker has been able to reduce labor costs, increase inventory visibility for e-commerce sales and ensure that errors no longer occur when shipping goods to customers, says Janice Hu, operations manager at King Windsor Group, the parent company of Carrucci Shoes.
Men’s shoes and casual shoes worldwide
Founded in Los Angeles nearly 20 years ago, Carrucci makes men’s and casual shoes, including leather boots, loafers and sneakers, and sells its products in department stores and boutiques around the world.
Last year, Carrucci was required to require all merchandise to be tagged with an RFID tag containing a unique ID by May 2024. For the retailer (Walmart and Macy’s are retailers with similar regulations), RFID-tagged merchandise can be automatically identified upon receipt and more easily tracked through the store when stored in back rooms, sales floors or at the point of sale.
To meet retailers’ needs, some companies simply attach the tags to products destined for those specific stores (which require RFID). Carrucci has taken a different approach: The company uses the technology for its own warehousing, as well as for receiving and shipping notifications.
Solve inventory problems
Long before the mandate was passed, Carrucci was struggling with inventory management challenges. Although the company always tried to maintain inventory accuracy, it was labor-intensive.
In fact, it could take employees half a day to complete an inventory in the warehouse to complete just one or two shoe styles. As a result, a complete inventory was never taken in the facility.
Additionally, the company has pushed online sales, making inventory accuracy even more important. To sell goods directly to customers, Carrucci wanted to be sure that product was available and ready to ship from the Los Angeles warehouse.
“We needed to make sure our inventory was always correct. When a customer purchases a product (whether they’re a wholesale customer or a retailer), we want to make sure the item is always available when we say it’s available,” Hu said.
Recognizing an opportunity in a mandate
When Carrucci Shoes was tasked with meeting RFID requirements, the company turned to RFID reader manufacturers and tag suppliers. However, it soon became official that without a complete RFID solution, the EPC tag data captured could not be meaningfully utilized.
“The numbers don’t really mean anything to us, we needed a human-readable format,” said Hu. They turned to RFID4U for the complete solution.
Hu praises the system as being cost-effective and easy to implement. “As a small company, we don’t have to pay high monthly subscription fees,” she said. They also needed a solution that would provide data relevant to the inventory data software they already used.
With the resulting RFID solution, “we can customize the format we use,” she said, including SKU numbers for shoe style, color and size in the warehouse.
Setting up the solution with RFID4U
Between January and May of this year, the company labeled its products in the warehouse with one label per carton. The company then began capturing label reads by walking through the warehouse with a handheld reader.
The company found that using the portable TSL reader, its employees could take an inventory of goods in its warehouse in just 10 minutes.
Next, officials began looking for other applications that might be useful. “We realized that RFID could do more than just inventory counts, so we started using it for inbound and outbound shipments to check quantities,” Hu explained.
How it works
Now that the system is fully operational, products are being labeled at the production site.
When Carrucci places an order from manufacturing, the company sends the corresponding Avery Dennison tags to the factory. As the new products are packed into shoe boxes, the RFID tags are attached to each one and the unique ID encoded on the tag is linked to the product SKU.
When products arrive at Carrucci’s Los Angeles warehouse, employees use the handheld reader to receive them, eliminating the need to open each box and check to see what products are inside.
As new orders come in from stores, Carrucci employees prepare boxes for shipping and use the handheld reader again to create an automated record of the goods shipped. If an error occurs during the packing process, the technology can identify the error before the goods are sent to the store.
Find the missing pair of shoes
Recently, Hu said, the system caught one such error when a particular pair of shoes could not be found. By putting the RFID reader into search mode, they were able to walk around the area until the reader captured the tag ID and led them to the shoes in question. They discovered that the pair had been accidentally packed in the wrong box.
“They know that picking and packing is all human work, so sometimes mistakes can happen,” Hu said.
Ultimately, uncovering such errors saves employees time and prevents chargebacks from retailers. And with more accurate inventory, Carrucci can handle its e-commerce sales more securely.
Reducing the cancellation rate
“Without inventory accuracy, the ERP system may show a product as in stock when it is not,” Hu explains. Although the company offered e-commerce sales before adopting RFID, the order cancellation rate was high because a pair of shoes offered for purchase online was not actually available in the warehouse. “If we don’t have it at the end of the day, the order will be canceled,” Hu says. That means not only lost sales, but also a drop in customer satisfaction.
Today, the company has a low cancellation rate in its e-commerce sales and a high accuracy in order fulfillment to retailers.
RFID4U considers Carrucci a pioneer in the use of the technology, and interest in its possibilities is growing, says Archit Dua, the company’s senior director of strategic accounts.
This growing interest is due in part to the general retail regulations that apparel and private label brands must comply with. In fact, these regulations are the first time many companies have been exposed to the technology.
“It is still a small percentage that does not want to simply attach and send RFID tags,” said Dua, but rather takes the initiative to introduce RFID within the company. “We are currently seeing a major upward trend here.”
Going beyond the introductions
Last year, there was a race to comply with the regulations, with companies feeling the pressure to simply label and attach the labels to goods before the regulatory deadline expired.
“But now many companies have met the requirements and the question is what can they achieve with the technology,” said Dua, pointing to the pressures retailers are facing more than ever: labor costs, fast order fulfillment, chargebacks from retailers for errors and high logistics costs.
“The shipping costs alone – a wrong delivery is so expensive these days. Not only do you have to reship the product to the customer, but in some cases the supplier pays for the loss of product sales,” she said.
RFID extension
RFID4U’s goal is to accelerate the adoption of the technology, whether it’s for small businesses or Fortune 500 companies.
In the meantime, Carrucci plans to continue exploring what’s possible with the technology now that every product is tagged. In the future, Hu said, Carrucci may expand the use of RFID to make tag reading even more automated.
The company has begun exploring fixed RFID readers, such as portals that could be installed in doorways or loading gates. “We are still conducting our research on that,” Hu said.
