The Gold Standard
Borsheims is a 62,000-sq.-ft. jewelry and gift store with an inventory of up to 100,000 items – some costing as much as $1 million. After adopting a new RFID technology developed specifically to track item-level movements of jewelry, watches and related goods, Borsheims was able to do what had previously seemed impossible.
According to Borsheims CFO Erin Limas, the TJS ZeroShrink tracking software was initially tested on the most expensive items in the watch category during the 2011 holiday selling season. The technology completely eliminated shrink on the tagged high-value items and reduced the time and labor it took to do manual inventory counts. The system paid for itself almost instantly.
“After Christmas 2011, without any shrink on the tagged items, we were sold,” says Limas.
ZeroShrink RFID consists of inventory tracking software, RFID scanners and tags. The tags can be read near metal and are small enough to be put on jewelry items.
“The system is designed to help jewelers, both retailers and wholesalers, keep track of the items in their inventory on a daily basis and cost effectively,” says TJS CMO Johnny Hazboun. “To do that manually is very time consuming and requires a lot of trust.”
A return on investment with ZeroShrink “can come as quickly as within a month,” he notes. “If a jeweler has an average shrink of 2 percent on $1 million worth of merchandise, the technology pays for itself very quickly.”
Ease of use
Located in the Regency Court mall in Omaha, Neb., Borsheims has hosted as many as 27,000 customers on a single promotional weekend. Before implementing ZeroShrink, Borsheims “did as most jewelers do,” Limas says. “Store associates conducted daily stock counts of goods moved into and out of vaults during off-hours, and did the more expensive, labor-intensive, time-consuming cycle counts of its inventory multiple times a year for some SKUs and once a year for less-expensive SKUs.”
Borsheims management had looked at RFID more than 10 years ago when it was being tested in retail environments like Target and Walmart. At that time, however, RFID jewelry tags were expensive, experienced inconsistent read rates and small items often had to be hand-turned to scan, which made RFID investments impractical.
“ZeroShrink is different,” says Limas. “It solves those problems. The reads are swift and accurate. Plus, we are using multiple scanners to count a lot of inventory in a very short time.”
“I can’t stress enough how amazingly easy it is to reconcile with this,” she says. “We are not spending research hours trying to figure out what happened to a particular piece of jewelry. We know in a 24-hour period if something is missing, and it’s much easier to reconcile within 24 hours than after weeks or months have gone by.”
The store, which Limas says has had “zero” shrinkage on tagged items since the process began in 2011, now has tags on 1,000 of its highest-value watch and jewelry items and is aiming to tag about 5,000 pieces in the near future.
Store employees affix a unique RFID tag to each item and then enter that tag number into the RFID software system, enabling the ZeroShrink RFID software to track item movements. The tags have to be decommissioned manually once an item has been sold.
TJS has a variety of tags, including varieties that can be embedded within a retailer’s paper label. Borsheims is using two types: reusable cotton thread tags for its high-value watches, and smaller, ultrasonic and steam clean-proof label tags that fit as an inlay on most jewelry barcode labels.
“The smaller RFID label tags ... are single-use tags so there’s an added cost,” Limas says, “but we are now at the point where we can display our smaller jewelry items without the visibility of RFID tags.
“That’s important because our customers can still see our beautiful jewelry while we enjoy all the security and inventory management benefits of RFID.”
Borsheims is continuing to expand deployment, “and because we have a lot of employees, we think we can do multiple scans and keep the counting and reconciliation process down to no more than 15 minutes a day,” Limas says.
The RFID software is being integrated with the store’s POS system; while that is taking place, sales associates process sales through the POS while recording the RFID transaction, and then decommission the tags.
Minimizing data transfer delays
Borsheims sales associates carry the Volaré Scanner, a wireless handheld reader for inventory counts. As trays of watches or jewelry are removed from or returned to the vault, associates wave the Volaré over each tray, capturing each unique ID number. Tags on items in a display case can also be read by opening the cabinet and waving the scanner over the items.
A small USB Desktop Scanner is used for scanning and decommissioning the tags at POS stations. At the end of the day, employees connect the readers to the PC running the ZeroShrink software, uploading the data to an inventory database containing detailed information on each piece of jewelry.
Borsheims is now testing a ZeroShrink RFID scanner concealed within a jewelry display pad. The simple leather tray can help gather item and sales associate data to give Borsheims a measure of how much shown jewelry is also sold — a show-to-sale ratio.
Because the system has eliminated the need for cycle counts on the tagged items, “we’re now spending more time cycle counting items that weren’t getting touched as often as we liked,” Limas says.
Unlike with barcodes, “RFID scanning streams hundreds of records per minute,” Hazboun says. “An independent processor dedicated to handling RFID transactions minimizes data transfer delays.”
Given all that, Limas says that “the greatest value to date from using the system has been in the security it has provided. Since we began [using] this system, I haven’t had a single unaccounted piece on any of the jewelry items we’ve RFID tagged.”