Sporting Goods Retailer Deploys RFID Across Hundreds of Stores
In a single year, Brazil’s Centauro increased inventory accuracy, reduced stock levels and better served its omnichannel customers by launching a UHF RFID system that ensures shoppers are served online even during pandemic closures.
Apr 11, 2021 When Brazilian retailer Centauro committed to deploying radio frequency identification technology to boost inventory accuracy, the company employed a strategy of both heavy planning and ambitious speed. Centauro took the system live at its 211 stores by late 2019, as well as at two distribution centers, all within a span of only one year.
By the end of the deployment, the company was launching the system at many stores within a single day. That included the tagging of goods before they reached stores, as well as RFID training and testing for all store and DC employees, in order to ensure they were comfortable using the technology. The deployment includes a software-as-a-service (SaaS) solution from Mojix known as ytem (see RFID Brings Visibility to Quick-Serve Restaurants and Stores), along with UHF RFID readers from Technology Solutions Ltd. (TSL) and Impinj.
Since being taken live in late 2019, the technology has increased inventory accuracy to 99.9 percent, according to Centauro, thereby improving its supply chain efficiency and the experience for shoppers, both onsite and online. A return on investment (ROI) was achieved in less than a year, the company reports. The RFID system provides stores with inventory cycle counting and automated receiving data, while enabling sales personnel to search for and pick goods based on omnichannel purchases. In addition, the retailer uses Mojix retail analytics software to gain a view into sales and purchasing trends.
Centauro is Brazil’s largest sporting goods retailer. Based in São Paulo, it operates 211 retail stores and multiple distribution centers, with 8,000 employees. The company averages sales of more than 40 million items annually, including footwear, apparel, athletic equipment and accessories. The quest for an RFID solution took place before the COVID-19 pandemic began, the firm explains, as omnichannel trends already meant more goods were being purchased online and shipped from stores.
“Our main goal was to better serve our customers through a seamless omnichannel experience,” says Sergio Silva Jardim Filho, Centauro’s executive manager of growth and strategy. When purchasing a product online, he states, “The customer shouldn’t know whether it’s coming from a store or DC.” The company began looking into RFID, conducted a pilot in 2018 and decided to roll out the system at the end of that year. It took Centauro one year to fully implement the solution at every store.
“Our initial and most important goal was to make sure that every product we had was tagged,” Silva Jardim Filho says, before goods reached stores,
thereby ensuring tags would not need to be attached to new products upon arrival. Once items were leaving the DCs with tags applied, he says, the company would then implement the system. With that in mind, the retailer created a tagging bureau at one DC in March 2019, which was responsible for tagging every non-tagged item received from suppliers, as well as goods in stock.
The DC implementation was completed within three months. Then, from May to October, Centauro formed four teams, each comprising six employees responsible for visiting physical stores and tagging the additional items in stock. “We took three full days to tag the first stores,” Silva Jardim Filho recalls, “which was reduced by the end of the project to only one day.” This was possible, he adds, “because the DC was replenishing our stores with tagged items, reducing the operational effort.”
While Centauro tagged every in-store item, Mojix helped to integrate the software. When the system was deployed, it was initially used for inventory cycle counting by personnel at each store, first on a once-a-month basis, then weekly. Eventually, the stores began reading tags as products were received. Some suppliers apply UHF RFID tags to products at the point of manufacture, while others do not do this. As each carton of goods arrives at Centauro’s DCs, they pass through a portal using a fixed Impinj reader and Acura antennas to capture tag reads. Any items not tagged are routed to a tagging station, while goods already tagged can be expedited for shipment to stores.
Centauro is using passive UHF RFID tags supplied by CCRR, with Impinj M6 or R6 chips, though the company plans to transition to R700 chips by July. Once shipments of tagged goods arrive at a store, workers employ a handheld TSL reader to capture every tag ID number. The collected data is being stored in the ytem software, and is forwarded to Centauro’s SAP software to update inventory data at each site, with stock counts further updating the information. The RFID-based counts enable Centauro to place replenishment orders.
Approximately four or five times daily, each store receives orders for goods purchased online that need to be shipped to customers. Employees then use the ytem software on the handheld reader to view all items that need to be picked and packed, and they can also utilize the device to search for goods. The software updates the inventory as the products are packed for shipping. The technology’s use has been scaling up since the system was taken live, says Tiago Michels Munhoz, Centauro’s project-management specialist. “We are evolving the way we use the technology,” he states.
One of the first steps toward a successful deployment, Munhoz explains, is to ensure that employees know how to use a new technology. To that end, the company has a training and media center that provided a tour of the solution for regional store managers, and it also rolled out videos and printed materials so personnel at every location could view how it works. The company provided a test to ensure that the workers understood the system. “We built that training with Mojix’s help,” Munhoz says, to ensure that the technology would be readily used at each site.
Tags are currently being applied to footwear, apparel and equipment, the company reports, though it opted not to apply tags to food items, such as protein bars, supplements and balls, since these are challenging to tag. Centauro employs 40 million tags per year, Silva Jardim Filho says. Since the system was taken live, he states, “Our main benefit has been the ability to increase omnichannel sales and increase in-store productivity.”
Because its inventory data is now more accurate, Munhoz notes, Centauro is able to purchase fewer products, which means it has less inventory in stock. Although the pandemic had not yet begun when the system was launched, it was soon tested by the arrival of COVID-19, since stores were closed and sales then took place via omnichannel purchasing. Staff members at stores have since been able to fulfill orders placed online, he says, using the RFID solution to achieve inventory accuracy.
In the future, Munhoz says, the company may consider expanding the RFID technology’s use for loss-prevention and point-of-sale (POS) purposes. Centauro conducted a pilot of a smart dressing room, he adds, with the technology providing a real-time view into which products were carried into or left behind in the room. “At the end of the day,” he reports, “we were able to digitalize the store,” since the solution enables the company to know which products were moved, which customers tried them on and which garments they did not buy.
In planning the deployment, the company observed systems deployed at other retailer sites, such as Macy’s and Lululemon (see Macy’s to RFID-Tag 100 Percent of Items and RFID Brings Lululemon’s Inventory Accuracy to 98 Percent). “I think we have reached what they have done,” says Silva Jardim Filho, and in some cases have surpassed it. The SaaS platform provides a real-time view into inventory and analytics.
“We are constantly working on enhancing the dashboards,” says Yanine Arellano, Mojix’s sales director for Latin America. “We also will be launching a new set of supply chain dashboards,” to be leveraged by Centauro. The planning and the SaaS nature of the software made the deployment speed possible, according to Silva Jardim Filho. “We used a super-fast approach to launching the technology,” he states. “At first, it would take three days to tag a store, and it was later only a day or so.” That speed was enabled, in part, by ensuring tags were applied at the DCs.
Since the system’s launch, Silva Jardim Filho reports, inventory accuracy has greatly increased. This, he says, has improved Centauro’s ability to serve customers from stores, reduced out-of-stocks, and optimized in-store
execution and shipping. In the future, the technology could also be used for other in-store purposes, such as loss prevention and POS. “We hope to keep on improving our use cases,” he states, “and to one day be able to digitalize everything that happens at the stores.”
Centauro says it achieved an ROI within less than a year. In addition, the company has acquired Fisia Comércio de Produtos Esportivos, Brazil’s distributor for all Nike products, and it intends to use RFID technology to improve the distribution of those products in the future. No date for this has yet been determined, however.
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