The Fashion Retailer

Ramir De Porrata-Doria is based in Barcelona. In 1992 he majored in Telecommunications Engineering from the Technical University of Catalonia (UPC). In 2000, he majored in Economics and Business Sciences, at the University of Barcelona. In 1997 he finished his Ph.D. in Electrical Engineering. He specialized in radiofrequency technologies, remote sensing, and radar.

Ramir is today CEO and co-founder of Keonn.  In the past he has worked in multinational companies like Ericsson and Ricoh, in a management consulting firm and in a start-up of renewable energies, always assuming management positions.

The Fashion Retailer (TFR): What is Keonn Technologies?

Ramir De Porrata-Doria (RPD): Keonn is a young and rapidly growing company that provides the most complete, seamless and advanced solution based on RFID technology to improve the customer shopping experience at retail stores, and to increase the sales of retailers.

Keonn product portfolio comprises RFID encoding systems (based on printers or encoding stations), RFID inventory systems (handheld readers, RFID robots and smart shelves), RFID interactive systems (recommendation systems, interactive fitting rooms and smart mirrors), fast point of sale systems, and RFID loss prevention systems (overhead, floor mats and pedestals). 

Keonn also provides a cloud-based software platform for managing remotely Keonn products and for collecting relevant customer behaviour data that retailers use for business intelligence purposes.

TFR: What is the entrepreneurial story that inspired the launch of the company?

RPD: Keonn’s founders are Rafael Pous and me. Rafael and me have known each other since 1993, when Rafael started his job as a professor in Electrical Engineering at the Technical University of Catalonia, and I was finishing my Ph.D. in radar remote sensing.

We met again 10 years ago, when RFID was still at its infancy, and it was not clear what its future might be. Despite this uncertainty, we thought that RFID would play an important role in the retail business, and after doing some market analysis, we realized that there were no RFID products in the market conceived for retail. As a result, retailers and system integrators faced big difficulties in deploying RFID solutions at retail stores: the solutions were not performing well or were too expensive. We saw this market gap as an opportunity, and we decided to launch Keonn.

TFR: What are the main challenges in the fashion retail industry in relation to your solution? Initially, RFID was an expensive way to have visibility of the inventory. Nowadays, its application goes beyond traceability and is key for different usages such as reducing shrinkage, counterfeits or enabling omnichannel. Could you explain how companies are taking profit of RFID?

RPD: The retail market is undergoing a shift. In the future, retail stores will be interactive spaces that make the customer experience more agile, pleasant, interactive and fun. We are seeing this shift today; as part of this process, many retailers are either already implementing omnichannel sales or they’re in the process. One of the primary obstacles to the store of the future is inventory inaccuracy. The average retailer’s inventory accuracy is only 65% to 75%. Retailers are increasingly turning to RFID to help.

But how retailers are implementing omnichannel makes a real difference. The lack of accurate inventory drives retailers to implement costly and inefficient practices. Most are putting stock threshold algorithms in their software, carrying lots of extra stock, and using many other techniques that don’t really work as well as they should.

Using RFID can boost inventory accuracy up into the high 90s. This improved inventory accuracy delivers many benefits: out of stock reductions of 50%, sales uplifts of up to 5.5%, fewer markdowns, and reduced stock holding. Omnichannel programs see improved pick times, initial fill rates and on-time shipments.

Additionaly, many retailers are incorporating different forms of digital technology to draw attention to products or drive people to shop in stores instead of online.

RFID is a key enabler of interactive systems that enhance the customer experience and help increase sales, cross-selling and conversion rates. For instance, RFID enables interactive recommenders and smart mirrors that detect the product approached by the customer and provide product information and matching items, smart fitting rooms that allow the shopper to request another size or colour without leaving the fitting room, self-checkout systems that avoid queuing at the point of sales, etc.

TFR: What is RFID or how does it work?

RPD: Radiofrequency identification (RFID) is a technology that uses electromagnetic waves to obtain a unique identifier from each object (the EPC – Electronic Product Code, or the “license plate” of the object), distinguishing it from any other object, even those that are identical to it, without the need of line of sight visibility.

An RFID tag is an identity sensor, comprised of a small antenna connected to a chip. The objects that have an RFID tag attached are identified by means of a reader. The RFID reader is connected to an antenna, through which it sends electromagnetic signals that interrogate the surrounding space. The energy of the electromagnetic wave activates the RFID tag, and the tag responds with its EPC code. At the end of the process, the RFID reader obtains an inventory of all the surrounding objects, in a time frame of seconds.

In essence, RFID is an identification technology much faster and efficient than barcodes, that opens a whole new world of possibilities.

TFR: Do you think that the implementation of RFID is a matter of size of the company or type of customer segment? (e.g. luxury companies, as they have higher margins, are implementing RFID; or grocery retailers need RFID because their high inventory turns and high volumes of inventories).

RPD: RFID can be embraced by any retailer, regardless of the company size and type of customer segment.

But it is true that different segments of retailers need different RFID solutions. For instance, grocery retailers are adopting RFID to better manage expiry of fresh food and reduce waste, whereas fashion retailers are adopting RFID to improve stock availability, display compliance and customer experience. It is therefore important to provide the right RFID solution to each retailer.

Even in the same segment, some retailers requiere a different solution than other retailers. For instance, some high end fashion retailers require an RFID solution for finding very quickly a specific product in the backroom in order to bring it to the customer and close the sale, whereas other fashion retailers with higher product turnover require an RFID solution for restocking and replenishing products quickly in order to avoid stock-outs at the sales floor.

Therefore, there is no universal RFID solution. It is important to understand what are the main business challenges of each retailer before proposing the right RFID solution to that retailer.

TFR: Could you briefly explain a couple of business cases, in fashion if possible, where Keonn participated? What was the need of your client and how did you solve it?

RPD: One fashion retailer wanted to create a new concept of retail stores, where customers would select and try on items, but would not take them. The products would be shipped to the customer’s home instead. These stores needed to have the minimum necessary stock, and therefore, it was essential to control with very high accuracy the inventory. Keonn supplied the RFID encoding solution, the overhead real-time inventory system and smart mirrors for the fitting rooms.

In another case, the main problem of a fashion retailer was that when customers requested a specific size of a product, the store associates took a long time to find it in the backroom and bring it to the customer. Keonn supplied smart shelves for the backroom, handheld readers for the sales floor, and smartphones for the store associates. Now, when a customer wants a product, the store associate scans it with the smartphone, and the Keonn application shows the exact location of that item in the backroom. As a result, the store associate can quickly find the product and take it to the customer, increasing sales and enhancing the customer experience.

TFR: Regarding RoboShop project, could you what is it and what are the benefits for retailers?

RPD: In the RoboShop project we are creating an RFID robot for obtaining automatically the inventory of a given space, for instance, a retail store or a low-ceiling warehouse, and with a very high inventory accuracy.

Additionally, this RFID robot also locates each tagged item in 3 dimensions (x, y and z). This information can then be processed to generate a 3 dimension planogram of the items inside a space.

The information generated by the RFID robot can be used to help customers finding the products they are looking for, to help employees detecting misplaced items, to accelerate picking and return management, etc.  

TFR: Retail is changing fast, some call it retail apocalypse, but I feel it´s a matter of adapting to changes and to online shopping. What is your feeling regarding the next 5-10 years in the fashion industry?

RPD: Retail stores will coexist with online shopping, in the same way that bank branches coexist with online banking.

But retail stores will change. The next generation of stores will be interactive and intelligent spaces that will make the customer shopping experience more agile, pleasant and fun.

These stores will harmonize physical and virtual retail experiences, providing tangible, enjoyable, physical experiences, with more exciting, intense and social ways for customers to get every ounce of value from their leisure time.

Today, it’s less about selling things than it is about the experience of buying those things. It’s about creating a bridge between the physical and the digital, and today’s consumers will accept nothing less.

The future of retail will not be physical or digital. It will be both. It will be phygital. 

TFR: As a start-up, what do you think are the key success factors that brings you to compete against big players?

RPD: Focus, speed, innovation and partnerships.

Focus because Keonn’s only business is RFID for retail. We do nothing else. This gives us an advantage compared to bigger players that need to cover several markets.

Speed because being a young company we take decisions very fast. If a retailer has a specific need that cannot be covered by the current solutions available in the market, we are able to take the decision to develop a solution for that retailer immediately.

Innovation because Keonn’s culture is based on continuous innovation. We developed the first RFID floor mat, the first RFID robot and the first industrialized RFID fitting room system.

And last but not least, partnerships with more than 200 system integrators scattered all over the world, who are trained in our RFID solutions, and who sell them, install them and maintain them in their respective territories.