Saks Incorporated has long established itself as a world-renowned retail icon, known for its unwavering dedication to providing customers with an extraordinary product selection and exceptional service. The company is constantly focused on delivering customers the ultimate fashion discovery experience in accordance with its tagline “Saks: Style. Assured.”
To deliver on its motto, Saks saw the need to optimize processes and increase stock visibility to shoppers in the massive eighth floor shoe department of the company’s flagship New York City store. The department is 15,000 square feet large with some 3,000 models of high fashion women’s shoes on display. It also boasts a full service restaurant and lays claim to its own zip code (10022-SHOE).
Between 5,000 and 15,000 pairs of shoes arrive each and every week at the eighth floor shoe department. Here, those with a passion for fashion can view the 3,000 pairs of women’s footwear options on display, shop privately in the VIP room and even have shoes repaired on site.In addition, another 1,000 pairs of shoes are on display in their respective departments.
With 4,000 shoes on display throughout the store and luxury price points that can reach $4,000 per pair, Saks knew it was imperative that every shoe be represented on the selling floor at all times. Shoes cannot be discovered or sold if they are tucked away in the stockroom or missing from display.
Saks wanted to maximize the number and availability of display shoes to customers, but found their existing manual process too time intensive. The amount of resources required also hindered the retailer’s ability to provide the extraordinary high level of service customers had come to expect.
The velocity and volume of shoes flowing into the store was deeming it nearly impossible to meet display compliance goals. Saks needed a better way to inventory the shoe display and validate compliance to back stock shoes and turned to an innovative solution to solve this problem.
If the shoe fits
In late 2012, Saks launch an innovative RFID project from Tyco Retail Solutions to address its inventory management and merchandising challenges. The goal was to move from a 65% compliance rate to nearly 100%. With Tyco’s TrueVUE Inventory Visibility platform and Display Execution application, Saks was able to tag every display shoe with an RFID label, and easily inventory the shoes on display each day. The application then generates a replenishment report for all back stock shoes missing a display style on the selling floor. Within a few months, Saks was able to reduce the number of missing shoe display styles and could represent a larger percentage of its footwear assortment on the selling floor. Saks was able to hits its compliance target, and display compliance rates have increased from 65% to nearly 100% since the project was implemented.
Due to the successful implementation, Saks has been able to dramatically reduce the number of missing shoe display styles and can now represent a larger percentage of the available shoe designs on the selling floor. This gave customers more shoes to discover and explore, thereby increasing sales chances without affecting the quality of customer service delivered.
RFID: Not a fleeting trend
Fast forward a few months and the initiative has already started to bear fruit. The RFID initiative to improve inventory visibility and merchandising has drawn rave reviews and generated an overall increase in sales, improved display compliance rates, reduced labor costs, and helped to fully optimize the customer experience.
Previously, the process to inventory the shoe department and validate display shoes took one week and multiple store associates to complete. Following the project, Saks associates can now complete this critical task in just 20 minutes and do so daily to keep up with the pace of new shipments. This has led to improved customer service as associates are no longer tied up with inventory tasks and are able to spend more time showing customers the latest in footwear fashion.
In addition to reducing labor costs, display compliance rates reached nearly 100%. As a result, Saks has seen an increase in sales given all shoe styles and colors are accurately represented on the selling floor and ready for purchase.
“At Saks Fifth Avenue our mission is to inspire customer confidence and style with every Saks shopping experience, one that makes people look and feel their best. Our flagship women’s footwear department in New York City exemplifies this commitment. With Tyco Retail Solutions we have proved the value of RFID technology for inventory management and merchandising and will continue to leverage the technology to improve sales, optimize merchandise and deliver on our mission,” says Ed Stagman, SVP Store Operations, Saks.