Tegu Uses Smart Fixtures to Build Sales

The construction-toy company has installed RFID-enabled display cases at stores, enabling it to track which products are sold, automatically bill the retailer accordingly and order replacements.
By Claire Swedberg
Jun 21, 2016

Tegu, a toy company headquartered in Honduras and the United States, is deploying ultrahigh-frequency (UHF) RFID-enabled fixtures for displaying and selling its magnetic and wooden building blocks on consignment. With RFID technology provided by Seeonic built into its fixtures, Tegu can account for its remote consignment inventory while ensuring that every participating store is adequately stocked. The result, according to the company, is that Tegu can now sell three times more stock-keeping units (SKUs) at those stores than it had been able to in the past.

Tegu was founded in 2007 by Chris and Will Haughey, a pair of brothers who wanted to launch a company that could have a positive social impact on Honduras (the company's name is derived from that country's capital, Tegucigalpa). Tegu's wooden and magnetic construction toys are typically sold at independent specialty shops. Such stores lack a large budget for purchasing inventory, and may thus offer only a limited number of products (on average, six to eight SKUs at a time). What's more, they may not always reorder products after those items are sold.

Tegu's smart fixture contains a Seeonic SightWare RFID reader that performs daily inventory counts of all RFID-tagged products on display.
"Often, a store is being run by the owner who is managing inventory as well," says Kevin Sergo, Tegu's e-commerce associate and project lead. At times, he adds, a Tegu sales representative will call a store and be told, "It's so great that you called. I needed to reorder three weeks ago" but didn't have the chance.

To enable a store or other locations frequented by children—such as daycare centers and museums—to offer a larger selection of products, Tegu developed a consignment program known as Special Retail Initiative (SRI), so that small stores or businesses could offer a greater number of its products without the risk of purchasing a large amount of inventory that may not sell quickly. To manage inventory at each fixture, Tegu incorporates Seeonic's RFID/IoT Solution platform into its fixtures. The Seeonic platform consists of an ultra-low-energy SightWare UHF RFID reader and EYE antennas, an RFID tag attached to each toy's packaging, and Seeniq cloud-based software to manage the remote devices and perform inventory analytics based on the collected read data.

Approximately two years ago (initially without the benefit of RFID), Tegu installed its own branded SRI fixtures at five stores, in order to determine if providing more products for sale at those stores would lead to greater sales—something that would benefit both Tegu and the retailers. At that time, the company required participating stores to count the products on the shelves, and to send it a spreadsheet indicating what had been sold. Tegu could then bill the retailer after the sale was completed. The fixtures proved to increase stores' sales by two to five times the previous sales levels.

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