When the largest beauty franchise network in the world decided it was time to move to an RFID-based supply-chain management system that provided item-level traceability from end to end, Avery Dennison’s beauty-specific RAIN RFID inlays was the clear choice. Here’s how Avery Dennison and RAIN RFID helped Grupo Boticário to almost eliminate stockouts and increase its revenue in the industry’s first RFID deployment in Brazil.
The Right Time
Grupo Boticàrio is the second-largest cosmetics company in Brazil and the largest beauty franchise network in the world – selling makeup, fragrances, skincare products, and more. The company operates a complex supply chain including branded retail stores, online channels, direct sales, and partnerships with other retailers. Founded in 1977, Grupo Boticário is present in 12 countries and growing fast. It produces some 335 million items annually and ships 100,000 items daily, supplying inventory to about 9,000 points of sale in Brazil and abroad.
These figures explain pretty well why the time was right to move to an RFID-based supply-chain management system. Selecting Avery Dennison to supply the RFID tags was an easy choice for Grupo Boticário and global consultants EY as, according to Fabiano Negrao, executive director with EY Brazil, “they [Avery Dennison] … understood beauty and had designed products specifically for beauty packaging.” Due to the tags’ superior quality, EY and Grupo Boticário chose AD-456u8 tags for metallic products, AD-301r6 tags for general-purpose tagging, and AD-160u7 tags for liquids and typical cosmetics packaging.
Instant improvements
To pilot test in-store visibility, RAIN tags were attached to individual items, with tagging being done at one of Grupo Boticário’s distribution centers. Cartons with tagged items were shipped to two retail stores, and two wholesale stores selling products to the company’s direct-sales representatives. At the stores, the RAIN RFID system was applied to improve shipment receipt, shelf replenishment, inventory counting, checkout, and demand planning.
Store employees experienced immediate improvements: Received shipments could check-in all items in a carton with a click of a scanner outside the box, rather than opening the carton and checking in each item one by one. Inventory could be counted in a fraction of the time compared to the legacy barcode system, and with greater accuracy. As a result, demand planners received better information that enabled them to order the right products for replenishment and to better forecast sales.
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The pilot’s outcomes exceeded expectations. Stockouts were reduced by up to 97 percent at participating stores. Identification of “hidden stockouts”—stockouts identified that were missed with the legacy system increased by more than half. Inventory-related labor hours came down by 14 percent, thanks to faster processes. And probably best of all, revenue at stores equipped with RFID was noticeably higher than at stores without it. For Bob Pernice, Avery Dennison’s Global Director of Market Development, these results were a confirmation — and less than a surprise: “The beauty industry is discovering what the apparel industry already knows—that item-level RFID tagging dramatically increases inventory accuracy and subsequent turnover. Further, it can help make beauty supply chains more efficient, secure, and sustainable.” Encouraged by the pilot’s results, Grupo Boticário has begun to roll out RAIN RFID across one of its store brands and will further explore RAIN RFID for other supply chain and retail use cases.
Discover more case studies to reach your goals, plus the latest in major markets, trends, and more in the fourth “What is RAIN RFID?” eBook where this use case was originally published.
About Avery Dennison
As the world’s largest RAIN RFID partner, Avery Dennison RFID solutions bridge the physical and digital world by providing physical items with a unique digital identity. Our solutions enable advanced efficiency, reliability, and accuracy across our customers’ global supply chains. Through our network of converters, service bureaus and in-plant printing solutions we provide a fast, streamlined, and flexible service, from product development and encoding to finished tickets, tags and labels. Meeting the needs for multiple segments from apparel, beauty and food to logistics, pharmaceutical, automotive, aviation & more.
Following the acquisition of Smartrac in February 2020, the combined RFID business boasts the broadest product portfolio in the market, with 1750+ patents and applications and a strong focus on sustainability. We are the only company to hold ARC certification for quality, with a global manufacturing footprint across China, Malaysia, Europe, U.S, and Latin America.