Technology from BT helps improve clothing stock

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Case study

Marks and Spencer

Technology from BT helps improve clothing stock availability and enhance customer service

BT has been awarded prime contractor status to manage the deployment and operation of an Auto-ID solution using intelligent labels to help maximise

Marks and Spencer’s garment availability

Database to cope with extensive network of Marks and Spencer global suppliers

Provision of fast, efficient and reliable hardware for Marks and Spencer stores

Provision of BT Auto-ID platform hosted at Marks and Spencer Data Centre

Systems integration between the BT Auto-ID platform and Marks and Spencer systems

Interface with Paxar Corporation, the chosen provider of intelligent labels for

Marks and Spencer

Day-to-day management and support of the BT Auto-ID platform and in-store systems

As prime contractor BT Auto-ID Services provides a single interface to Marks and Spencer to achieve a co-ordinated RFID solution

Executive summary

In order to improve the availability of size and colour variants of its garments, Marks and Spencer looked into the use of Radio

Frequency Identification (RFID) technology with the introduction of an intelligent label attached to garments. Having proven the concept in pilot projects, Marks and Spencer decided to extend the trial and sought an implementation partner.

BT – represented by its specialist BT Auto-ID

Services division – was selected as the prime contactor. The BT managed service solution includes database creation, hardware sourcing and provision as well as bespoke application development and systems integration. Implementation commenced in

April 2005 and is currently being trialled in over 40 stores, covering six merchandise departments, including men’s formal wear and ladies suits, skirts and trousers.

Intelligent labelling utilising RFID technology is helping to enable Marks and

Spencer to improve the effectiveness of stock distribution and merchandising, increasing the range of garment sizes and colours available in its stores. This is improving customer satisfaction and increasing sales, further contributing to the resurgence of Marks and Spencer’s clothing business. BT development, management and support services ensure that the solution is always available, eliminate hassle and save cost for Marks and Spencer.

“BT has the global presence and the necessary scale and authority to work with us on this RFID project. What is more,

BT shares our future vision for this technology.”

James Stafford

Head of Clothing RFID

Marks and Spencer

Case study

Marks and Spencer

“The first benefit we saw was a significant improvement in the availability across the whole of the suit department. This had a very positive impact on customer service.”

Sacha Berendji

Regional Manager

Marks and Spencer

Marketplace

Marks and Spencer (M&S) is one of the most iconic chain stores in the UK. It is the country’s largest clothing retailer by turnover, as well as being a multi-billion pound food retailer and supplier of homeware. Founded in 1884, the company enjoys an enviable reputation in the hearts of the British people and is fully committed to its values – Quality, Value, Service,

Innovation and Trust. The group has over

400 stores throughout the UK providing nearly 12.5 million square feet of retail space. In addition it has wholly owned stores in Ireland and Hong Kong and almost

200 stores managed under franchise arrangements in 30 territories.

The group’s share price has been underperforming for several years but in 2006 the company appears to have turned the corner. This resurgence has been helped by improved performance in clothing with many analysts saying that the company is on the way to re-establishing its fashion credentials.

Business opportunity

A key challenge for any retailer in today’s busy and competitive High Street is having the right stock available at the right place at the right time. Whilst point of sale systems tell the retailer what has been sold, the systems do not necessarily provide an accurate assessment of what remains on a particular shop floor – a real challenge in a large clothing store. Ideally, like other retailers, Marks and Spencer needs to ensure all available size and colour variations of a product are on display in store at all times.

To meet this challenge, Marks and Spencer started to look into the use of Radio

Frequency Identification (RFID) technology through the introduction of an intelligent label attached to garments. James Stafford,

Head of RFID at Marks and Spencer, explains: “The intelligent label contains a small microchip but it has no battery and so is a completely passive device.”

Stock can be verified by passing a handheld scanner (or reader) close to the clothing. The scanner works by transmitting a very low power radio wave to the intelligent label and the label responds by reflecting back a unique number to the scanner. This number is transmitted back to the central database for use with stock control systems.

Early proof of concept RFID implementations enabled stores to quickly and easily count the stock in the store and correct the inventory figures. The allocation and replenishment systems can then accurately top up the stock based on sales and sales forecast from the central warehouses. With measurable success in these pilots, Marks and Spencer decided to go beyond the trial into a large-scale project and seek an implementation partner. It issued a request for proposal (RFP) and after a thorough review of the responses selected

BT – represented by its specialist BT Auto-ID

Services division – as its prime contractor.

Case study

Marks and Spencer

BT solution

The decision to select BT was founded on

BT’s credentials and experience of RFID implementations. James Stafford says: “BT has the global presence and the necessary scale and authority to work with us on this

RFID project. What is more, BT shares our future vision for this technology.”

Other key factors in the decision were BT’s approach to working in partnership with

Marks and Spencer, and the capability of the BT Auto-ID platform and application to cope with the scale and variation of Marks and Spencer merchandise. The BT managed service is a fully scalable and affordable solution, designed to deal with the very large volume of data that can be created in major retail RFID implementations.

Implementation commenced in April 2005 and involved trialling the solution in over 40 stores in Spring 2006, covering six merchandise departments, including men’s formal wear and ladies suits, skirts and trousers. BT’s responsibilities as prime contractor include:

• The creation and maintenance of a database to cope with Marks and Spencer’s extensive network of global suppliers

• The sourcing and provision of fast, efficient and reliable hardware for Marks and Spencer stores

• Provision and management of the BT

Auto-ID platform to be hosted at the

Marks and Spencer Data Centre

• Bespoke application development and systems integration services to interconnect the Auto-ID platform with

Marks and Spencer enterprise systems

• Interface with Paxar Corporation, one of the global leader in ticket and tag manufacturing, and the chosen provider of intelligent labels for Marks and Spencer

• The day-to-day management and support of the BT Auto-ID platform and in-store systems to enable real time collection and processing of data

The BT solution has inbuilt monitoring and should the system detect a software fault an automatic alert is generated to the Marks and Spencer internal helpdesk. This desk advises BT of the issue and BT can remotely analyse and, in many cases, resolve the problem. Hardware faults are dealt with by an engineering visit or, if not critical, a postal faulty item replacement service.

Why BT?

• BT’s competence, experience and vision with respect to

RFID technology

• The scalability and flexibility of the BT Auto-ID platform, which is an affordable solution with a managed service wrap

• National and global reach

Results

Intelligent RFID labelling is enabling Marks and Spencer to help improve the effectiveness of stock distribution and merchandising, increasing the range of garment sizes and colours available in its stores. The results are very evident as Sacha Berendji, Regional

Manager at Marks and Spencer, says: “The first benefit we saw was a significant improvement in the availability across the whole of the suit department. This had a very positive impact on customer service.”

Although restricted to six departments the solution is focused on those ranges that have the most variants and so extends to a high proportion of Marks and Spencer’s clothing sales. Such has been the success that the impact of this project can mean only one thing – improved customer satisfaction, further contributing to the resurgence of

Marks and Spencer’s clothing business.

This was a complex implementation and as might be expected with leading-edge technology some teething problems were encountered during the rollout. The most significant issue was that of contention between the mobile readers. If readers are too close together they can interfere with each other. This is not always obvious to the users as they may, for example, be on different floors of the building. This interference can affect the accuracy of the count, reducing it from 100 per cent to perhaps 70 per cent, and possibly causing excess stock to be delivered to the store..

Having identified this issue BT engaged technology specialists from its Adastral Park research and development centre. Working with the manufacturer of the readers it has designed a simple and ingenious solution.

The solution enables synchronisation of two or more readers, so that at any one time only one of them is able to receive a signal.

As these bursts of operation are at very short intervals they do not affect the scanning process, but remove the potential for contention.

This project is a prime example of innovation at its best. In fact, Marks and

Spencer is convinced that retailers around the world will closely watch this hugely influential project. It also positions BT at the forefront of the Auto-ID market in the UK.

Case study

Marks and Spencer

Technology blueprint

Each size and colour variant of Marks and

Spencer clothing has a unique product code

(UPC) and each year there are typically

600,000 such identities in the supply chain.

Every RFID tag has a unique identity and at the label printing stage (mostly carried out on the premises of garment manufacturers) the identity of each RFID tag is associated with the UPC of the garment to which it will be attached. With multiple orders for each

UPC the system needs to be able to capture and process some 500 million unique RFID identities each year. BT also manages the interface to Paxar Corporation to enable the

Auto-ID platform and Marks and Spencer stock systems to be constantly updated with

RFID tag and UPC identity data for newly manufactured garments.

Each store has one or more mobile base stations comprising a hand-held reader communicating via Bluetooth with a mobile

PC, which needs to be within a range of 50 metres of the reader. When garments are scanned the unique identity of the RFID tag is captured and transmitted to the PC. The reader provides both an audible and visual indication of a successful scan and the PC displays a count of merchandise. The data is then transmitted over the in-store wireless

LAN to the Auto ID platform for onward feed to Marks and Spencer’s stock management system through a Microsoft

BizTalk server interface.

Main BT products and services

• BT Auto-ID Services Mobile

Asset Management – employing RFID technology, consultancy and data management.

Offices worldwide

The services described in this publication are subject to availability and may be modified from time to time. Services and equipment are provided subject to British Telecommunications plc’s respective standard conditions of contract. Nothing in this publication forms any part of any contract.

© British Telecommunications plc 2006.

Registered office: 81 Newgate Street, London EC1A 7AJ

Registered in England No: 1800000

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