Case Study: Tracking Inventory of Goods in Sports Retail Store with RFID Software
(RFID World Canada) As the major sporting goods store in a busy ski and resort area, Mammoth Outdoor Sports (Mammoth) was challenged to accurately track the high volume of inventory flowing in and out of their retail stores. With three locations to operate, seasonal offsite locations, rapid seasonal merchandise turnovers, equipment rentals plus an active e-commerce site, Mammoth staffers had almost no time for cycle counts, and even less time for order reconciliation. Their physical inventory and POS system were substantially off. “Inventory was very difficult to control because we buy our gear from many different sources and the merchandising at each of the stores is unique,” says Phil Hertzog, co-owner of Mammoth.
Mammoth, a three-store chain operating as Mammoth Sports and Value Sports, came to Truecount seeking ways to use RFID (radio frequency identification) technology to bring their inventory under control and cut losses. In March 2012, Truecount finalized the installation of Truecount’s comprehensive solution software, from printing and commissioning of the tags to cycle counts and Point of Sale. All of the item-level RFID hardware, software, integration, networking and other components required to enable maximum visibility and near-perfect inventory management. Truecount teams tagged all items above the $3.00 price point, from skis, snowboards and boots to clothing, gloves, goggles and other gear. Very quickly, sales rose. In tracking inventory deviation, Truecount found that before deploying item-level RFID, Mammoth had been working with data that varied 30% or more.
According to Zander Livingston, Truecount’s CEO, Mammoth exhibited the typical retail challenges that Truecount was developed to solve. “Inventory accuracy was so distorted that there was no way it could be solved with bar codes or any technology other than RFID,” Livingston remarked. “Item-level RFID consistently proves its value within the retail sector. RFID is the fastest, easiest and most accurate way to count, delivering the highly accurate data and visibility required for effective decision-making relevant to re-ordering and demand forecasting.”
Livingston adds that Mammoth uses its storefront as a stockroom and distribution center for their online sales channel, maintaining large quantities of merchandise ‘in stock’ which are also available to retail customers. Mammoth receives its extensive line of products from many diverse sources, including wholesalers, resellers and odd lots, as well as manufacturers. “It was a tangled mess when we came in,” says Livingston. “We handled it all, from source tagging to POS integration. Now, they can tag everything as it arrives and track items through the final sale.”
Stephen Hertzog, Phil’s brother and co-owner, agrees that the data captured by RFID, tracking individual items in all the different sizes, colors and styles, makes it easier for the staff to keep the showroom “perfect” so that consumers can always find what they are looking for both in the store, or online. “As a sports outfitter, we carry a huge amount of seasonal merchandise. There’s a short window of time for selling, so avoiding overstocks as well as out of stocks is vital for our bottom line,” he says. “We are benefitting substantially from RFID’s real-time inventory data.”
Accompanying the rapid merchandise turnover each season is a high employee turnover rate. “Everything was sell, sell, sell, so there was limited time to adequately train staff,” adds Phil. “There was also very little recourse for shrink. Truecount helped us identify areas of employee theft, and we purged the operation of several dishonest employees.”
Livingston pointed out that the Truecount interface is intuitive, with very little training required. As part of their services in implementing item-level RFID, Truecount provided full training and support for Mammoth staff, both on-site and off-site, along with consulting and strategy for tagging and auditing. Truecount also provided development and two-way integration to Mammoth’s POS system, RetailStar, to ensure the least amount of change to Mammoth’s current check-out process.
The results for Mammoth have been dramatic. The operation moved quickly from inventory distortion to total visibility, with the capability to execute full cycle counts for high demand items “at will” and to complete overall store audits in about one hour. In one store with 20,000 items, Mammoth was able to reduce inventory time from two days to 90 minutes. In their largest store, with 50,000 items, inventories that used to take a week or more can now be completed in 4-5 hours.
The real-time replenishment facilitated by Truecount RFID is also keeping stores properly stocked and customers happier. The RFID tag is also the security tag, so there is no need to place an Electronic Article Surveillance (EAS) tag on items In addition, Mammoth is finding that RFID saves valuable staff time at check-out, and is a tool that helps train employees for greater compliance and efficiency. Another side benefit directly related to shrink, Mammoth employees know with Truecount’s RFID system operating, the store owners are now able to closely monitor what happens to each item in inventory, and this has been a deterrent to dishonesty.
“Once Truecount put their solution in place at Mammoth, we gained unprecedented levels of control over inventory management and processes—something we could never have achieved before” say the owners of Mammoth Outdoor Sports. “Truecount elevated Mammoth’s overall efficiency to our next level of maturity as a retailer, and now we are opening new stores with greater confidence that our inventory is as accurate as possible.”
Mammoth is now considering a roll-out of Truecount RFID to 20 temporary units that the company sets up at ski and snowboard expos each fall.
Some more pictures from Mammoth Outdoor Sports: