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RFID in the
Intimates Category A Perfect Fit
January 11, 2006
Reproduction by any method or unauthorized
circulation is prohibited without prior approval
from KSA
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Todays Objectives

• What is RFID?
• Why the excitement about RFID?
• How will this impact Intimates?
• Who is using RFID?
• Which applications have high impact?

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What is RFID?
Tags
Serialized Product Codes
Readers
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Why the buzz?

• Verify contents without opening the carton
• Rapid inventory counts ensure proper assortments
  on sales floor
• Cleaner merchandise presentation
• Higher sell through rates
• Cross-selling opportunities
• Loss prevention

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Why use RFID with Intimates?
ATTRACTIVENESS FOR ITEM LEVEL RFID
HIGH TRIAL-TO-PURCHASE RATIO
DIFFICULT TO LOCATE
SHORT WINDOW TO 1ST MARKDOWN
HIGH SHRINK
SEVERAL VARIATIONS
DESIGNER JEANS
VERY HIGH
VERY HIGH
INTIMATES
WOMENS SWEATERS
HIGH
MENS SUITS
HIGH
BASIC JEANS
MODERATE
SOCKS
LOW
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How might you be impacted?
RFID Migration Path by Retail Format
Pallet Level Tagging
Case Level Tagging
Item Level Tagging
Discounter
Department Store
Specialty
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Case Study 1 Marks Spencer
Program Details
Findings to Date

• Every garment in 6 apparel departments across 53
  stores
• Men suits, jackets, pants
• Women intimates, suits jackets, skirts pants
• Tags integrated into existing barcode label
• MS supplying labels to suppliers for application
  at source
• Tags not being read at POS
• Labels advise consumers intelligent label for
  stock control use
• MS piloting a shirt program across the supply
  chain to improve item availability

• Inventory counts can be completed in less than
  15 of current time
• Associates have grown accustomed to using the
  RFID hardware
• Consumer response has been very positive with no
  privacy backlash
• Most consumers opt to remove tags at home rather
  than wait for cashier to remove at POS

We have had a very good reaction from
customers. They hardly notice the tags but have
mentioned improvements in product availability.
Our suppliers do not have to invest in any RFID
hardware at all. They just have to attach the
label to the garment as usual it is just that we
will give them a more sophisticated label.
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Case Study 2 Levis
Program Details
Findings to Date

• Every garment in upscale Santa Fe mall store
• 3 month pilot
• Items bound for Santa Fe store get diverted and
  tagged at DC
• Tags integrated into price labels
• Reading tags at DC at point of departure and upon
  arrival at store
• Full inventory taken daily
• Automatic reading of tags and decrementing of
  inventory at POS terminal

• In-stock levels have risen to 99 from 80
• Expedited receiving of incoming shipments
• Daily inventory counts (30 minutes) instead of
  lengthy monthly manual count
• Reading 300 garments per minute
• Absolutely no adverse consumer response to item
  level RFID
• Store associates quickly learned how to use RFID

We have been pretty aggressive. Were excited
and encouraged by some of the early results we
are seeing. There is substantial value in
accurate inventory. We expect substantial
return at the item level. Well get very little
return from case and pallet tagging. David
Bergen, CIO
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Your RFID checklist
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MARSHALL KAY [phone] mskay_at_kurtsalmon.co
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