The Nexus of Forces in Action – Use-Case 18: Smart Retail Distribution



Optimization of logistics of customer goods in urban areas, in particular in city centers.

Primary Industry Sectors

Retail, transport

Business Value

Transport garments from distribution centers to retail shops in the city center with security and efficiency.

Key Business Functions

Distribution center management, retail mechanization management, apparel stock tracking, apparel stock security audit.

Primary Actors

Retail delivery driver

Secondary Actors

Garment designer, manufacturer, retail environment designer

Machine Actors

Apparel-embedded RFID tag, apparel sales forecast behavior analytics, traffic management real-time and forecasting, mobile distribution work instructions app, GPS, social networks, cloud (private, public, hybrid, community)

Key Technologies

IoT, mobile, cloud, big data, social

Main Scenarios


Each garment manufactured is RFID-tagged with all the information required for distribution and retail operations such as receipt, display, and selling. RFID tagging enables the garments to be identified by sensors on the mobile phones of people located at the distribution centers and the retail shops and the mobile phone of the retail delivery driver (small van driver). Before transportation, the electronic transportation document is downloaded to the driver’s phone, against which tagged items are checked as they are loaded. After transportation, the electronic transportation document is transferred to the retail shop, anticipating the contents of the van, and enabling the billing from the manufacturer to the retail shop and from the logistics operator to the manufacturer.


During transport, an RFID tag attached at the van is read on entry to a limited traffic zone, using short-range communication between the van and sensors located on fixed points at the city center. Forecasts based on big data analysis of roads and traffic provide a cloud-based service to the mobile of the driver for more efficient routing.

Additionally, sharing sensor data that is related enables the forecasts to consider the neighboring vans entering the area and suggest specific social interactions for more efficient planning, such as access to specific parking lots according to priority, predefined delivery time, and urgency. A series of anti-counterfeiting techniques are applied in case of deviation from the planned journey and assigned destination. For example, unexpected opening of back doors, missing goods, or entry to unauthorized area/exit from authorized area will be interpreted by the on-board system and reported as an incident to the manufacturer.

Key Data

Master Data

EPC, asset RFID tag specification, authorized transport record, usage rules for transport (e.g., unauthorized access, unauthorized geo-location, mobile device, and RFID tag sync), compliance rules for auditing stock

Current Observations Data

Current location of asset RFID tag, current alerts of abnormal usage patterns

Historical Data

Planned and actual asset RFID tag locations, compliance history

Query Data

Predefined delivery time and urgency progress report, service-level performance, location of nearest stock

Action Taken Data

Stock location finder recommendation, lost stock reporting, replacement stock order

Real Business Examples

American Apparel

“Now with RFID chips, American Apparel makes its own rules, a strategy that has helped the clothing retailer grow to over 250 outlets throughout the United States, Europe, and Asia. This trend-setting approach extends from how goods are sourced – the company is vertically integrated in that it owns its sewing, design, and dyeing facilities – to the use of advanced technology to ensure American Apparel’s full range of merchandise is available to customers in a timely manner. One of the first retailers to adopt item-level RFID, American Apparel continues to expand its use of this technology to increase efficiency at the retail end of the supply chain.”

“RFID tags are attached to each garment at the company’s factories. Stationary tag readers at the Los Angeles distribution center and within individual RFID-enabled stores date and track the merchandise from shipping through purchase, with stops along the way for receiving, reconciling receipt information with advance shipment notification, storing inventory updates, and determining which items will move to the sales floor and which will be stored. A final read before garments are moved to the floor ensures that complete and correct inventory will be displayed. The RFID application used by American Apparel interfaces with the company’s software for ERP, inventory management, and point-of-sale processes to further streamline all aspects of operation. Once the company installs RFID gates in store doorways, these tags will also act as theft-detection devices.”

(Source: the Dhruv Grewal and Michael Levy book on Marketing, available from inkling.)

Additional Considerations

Existing Interoperability Standards

See Use-Case 20: Safe Mobility.

Comments on Context

Stock location tracking and security, compliance.


Use of RFID tags and integrator devices.