The	  RFID	  Tipping	  Point	  Presented bySession sponsored by
#CCSeries13About	  CCS	  2013	  ü 9 Webinars, 4 Daysü Sessions covering Mobile,Social, Store Ops,X-Channel, and moreü F...
#CCSeries13Follow	  The	  Webcast	  On	  Twi:er	  #CCSeries13	  @ConnectConsumer	  @RTouchPoints	  
#CCSeries13About	  Retail	  TouchPoints	  ü Launched in 2007ü More than 25,000 subscribersü Provide executives with rel...
#CCSeries13BrightTALK	  
#CCSeries13Today’s	  Panelists	  Brian HumePresidentMartec International, Inc.MODERATORAlicia FiorlettaAssociate EditorRet...
MARTEC InternationalRFID and Its Potential Impact OnInventory Management andMerchandisingBrian Hume22nd May 2013+44 1823 3...
MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.• ...
MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.• ...
MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.Ca...
MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.Su...
MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.• ...
MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.In...
MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.In...
MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.In...
MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.Is...
MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.Lo...
MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.Pl...
MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.• ...
MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.• ...
MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.• ...
MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.Ef...
MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.Ma...
MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.• ...
#CCSeries13Q&A	  
#CCSeries13Q&A	  	  //	  	  Panelists	  Brian HumePresidentMartec International, Inc.MODERATORAlicia FiorlettaAssociate Ed...
#CCSeries13Cabelas:	  Adding	  Context	  To	  Next	  GeneraDon	  MarkeDng	  Today, 2 PM ET / 11 AM PTThank	  You	  	  For	...
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The RFID Tipping Point

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After implementing RFID, Macy’s has reduced its inventory accuracy deterioration to 3%-5% from 30%. American Apparel has cut the time it take associates to count items on the sales floor to 2 hours from 6 hours. “This is technology that has proven effective in our testing, and we believe now is the right time to roll out RFID aggressively," said Tom Cole, Chief Administrative Officer of Macy's, Inc. In this session, industry experts will discuss the fact that 2013 could be the year of the perfect storm of RFID implementations: technology costs have dropped significantly; and more companies are proving that RFID creates inventory efficiencies, improves loss prevention and saves money.

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The RFID Tipping Point

  1. 1. The  RFID  Tipping  Point  Presented bySession sponsored by
  2. 2. #CCSeries13About  CCS  2013  ü 9 Webinars, 4 Daysü Sessions covering Mobile,Social, Store Ops,X-Channel, and moreü Featuring industryanalysts and consultantsü Free for Retail executiveswww.retailtouchpoints.com/connected-consumer-2013
  3. 3. #CCSeries13Follow  The  Webcast  On  Twi:er  #CCSeries13  @ConnectConsumer  @RTouchPoints  
  4. 4. #CCSeries13About  Retail  TouchPoints  ü Launched in 2007ü More than 25,000 subscribersü Provide executives with relevant,insightful contentü Free Resources such as White Papers,E-book, Webinars, Research andPodcastswww.RetailTouchPoints.com
  5. 5. #CCSeries13BrightTALK  
  6. 6. #CCSeries13Today’s  Panelists  Brian HumePresidentMartec International, Inc.MODERATORAlicia FiorlettaAssociate EditorRetail TouchPoints
  7. 7. MARTEC InternationalRFID and Its Potential Impact OnInventory Management andMerchandisingBrian Hume22nd May 2013+44 1823 333469www.martec-international.com
  8. 8. MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.•  To give an overview of merchandise and inventorymanagement in an omni-channel world•  To show the potential for RFID to help improveinventory management and sales success•  To examine where RFID makes the most sense inretail todayObjectives of This Session
  9. 9. MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.•  How many of you have an RFID project and would youclassify it as either:•  A live project progressing to full implementation?•  A pilot or test project?•  No project yet?Poll Question 1
  10. 10. MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.Category  Management  v  Merchandise  Management    Category  Management   Merchandise  Management  •  Most  products  sell  year  round  •  Change  perhaps  10%  of  the  product        range  a  year  •  Low  risk  merchandise  •  Typically,  low  markdown  %  sales  •  Large  part  of  product  range  changes  every  season  (70%)  •  Seasons  may  be  long  (26  weeks)  or  short  (6-­‐8  weeks)  •  Risk  merchandise  •  High  markdown  %  sales  •  Grocery  (Supermarket,  Convenience,  Hypermarket)  •  DIY  •  Chain  drug  stores  •  Electrical  •  Department  stores  •  Fashion  retailers  (Not  just  apparel)  •  Forecas]ng  based  on  ]me  series  •  Replenishment  for  year  round  goods  •  Alloca]on  for  new  items  and  promo]onal  li^s  •  Forecas]ng  based  on  par]cipa]on  and  seasonal  profiles  derived  from  plan  or  LY  •  Mostly  100%  alloca]on  for  short  seasons  •  Depending  on  country,  heavier  use  of  pre-­‐alloca]on  and  cross-­‐docking  •  May  use  replenishment  for,  say,  first  16  weeks  of  long  seasons  
  11. 11. MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.Summary  of  the  Merchandise  Management  Process  PRE-­‐SEASON   IN-­‐SEASON  Planning(Merchandise andAssortment)InitialAllocationsPerformanceReviewPost-SeasonSummaryReplenishmentRevisedSalesForecastClearancePOST-­‐SEASON  
  12. 12. MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.•  Stock counting•  Inventory location – where is it?•  Inventory data accuracy, receiving•  Store replenishment•  Loss prevention•  Planogram compliance•  Omni-channel, especially click and collectMerchandising Areas Where RFID Can Make An Impact
  13. 13. MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.Inventory Accuracy – Stock CountingInventory counting is as exciting as watching paint dryCounting often introduces as many errors as it fixesWhere multiple locations are involved they may not all get countedThe potential for RFID is to reduce count time and substantially increase countaccuracyAlso it’s easier to recode incorrectly coded product•  Is product unfamiliar to associates incorrectly identified?•  Is product in multiple locations in the warehouse all counted?•  Is product in multiple locations on the sales floor? Do all locations getcounted?•  What happens if items arrive at the warehouse incorrectly coded?
  14. 14. MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.Inventory Accuracy – Where Is It?54% of out of stock issues on the store sales floor are due to store operationalproblemsMany sales are lost because inventory is in the stock room not on the floorThe potential for RFID is to have greater visibility of exactly where in the supplychain the inventory really is, thereby enabling expeditingNo sales recorded in store when buyers expected sales:•  Did the warehouse dispatch it?•  Did the store physically receive it or is it still in transit?•  Did the store do the receiving process?•  Is the item on the sales floor or on the dock/in the store stock room?
  15. 15. MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.Inventory Accuracy – Receiving and Cross DockingAuto-scanning warehouse receipts (and perhaps store receipts too) can identifysupplier size/color mix errors much more quickly, potentially allowing morerectification time.If you 100% pre-allocate you may be incurring avoidable markdowns if you don’tdetect and rectify at receiving time.•  Is what you ordered what arrived in the DC?•  Supplier accuracy is generally much worse on products involving size/color/fit, especially fashion•  Receipts can be 100% pre-allocated for cross docking, partially pre-allocated or post allocated.•  Depending on supply chain speed, pre-allocations may getdispatched to stores before errors are identified
  16. 16. MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.IssueWhen a shelf is empty, do you let thestore associates zero the store’ssystem inventory?What’s the risk that they didn’t checkback areas accurately or check otherlocations in store?If your daily or weekly sales history is5,4,6,5,3,0,0,0 at what point do youphysically check inventory?If the store has book stock, it may nowbe shrinkAt an annual physical inventory, howmany times did a zero stock on aseasonal item get increased?A good guide to weaknesses in storeproceduresStore ReplenishmentRFID potentially makes re-counting and checking other locations such as stockrooms much easier and more likely to happenLost sales in grocery is about 8-9% sales. In fashion, it’s more like 20%. Theavoidable lost sales potential can be very significant.
  17. 17. MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.Loss Prevention•  Many retailers protect high value items with security tags ofvarious sorts•  Invest in sensors to check that tags have been de-activatedbefore shoppers leave the store•  Cost means these tags have to be recycled continuously andthey are fitted and removed by hand in storeUse of RFID built into a seamless process can usethe same tag for loss prevention and inventorymanagement purposes, saving cost and reducingthe store labor burden.This approach can then be extended into customerservice applications after sale, e.g. keeping theservice history of an item in the item itself.
  18. 18. MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.Planogram ComplianceDid the planogram get set correctly?
  19. 19. MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.•  A Martec study in the UK found the equivalent of 40 to 50 specialty storesclosing per week due to the way that online sales are cannibalizing stores•  The same study found that total online sales could grow to be 20% to 40% ofchain sales depending on sector and that at least half of this would be clickand collect•  These factors mean that some consumers will have to go further to get to astore•  Consumers, when they place a click and collect order, need to be really surethat the item will be there when they get there. In other words, inventoryaccuracy will be paramount, especially if the store on hand for an item is inlow single figures.•  As online sales share grows, this will become more critical.Omni-Channel Considerations
  20. 20. MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.•  Historically well known applications in palletand container tracking, asset management,e.g. food trays, pallets, shop fixturesMoving to item level product tagging:•  Higher value items, e.g. shoes, suits, wheresize, color and fit are key dimensions•  Items where the value of individual loss is high•  Macy’s, Wal-Mart, Zara in fashion/apparel orshoes•  M&S in UK rolled out across clothing•  C&A Germany just gone from 6 to 25 storesfor fashionRFID Deployment in Retail
  21. 21. MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.•  How many of you have managed to justify an RFIDproject with an acceptable return on investment?•  Yes•  No•  Have not had the opportunityPoll Question 2
  22. 22. MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.Effective use of RFID has the potential to:•  Reduce labor costs or release labor to improve customer service•  Improve sales (or reduce lost sales):•  Use all the inventory you have all the time•  Reduce out of stocks through data accuracy, ability to expedite becauseof supply chain visibility – you know where inventory is at a more granularlevel•  Improve allocations and send the right inventory to the right store moreoften (very important if you cross-dock in volume)•  Improve replenishment through improved visibility•  Get the inventory on the sales floor faster•  Improve sales through improved planogram compliance•  Reduce inventory losses or at least the cost of loss prevention•  Reduced markdowns through more accurate allocations, more time instore, less time in transit (waiting)Where’s the Payback?
  23. 23. MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.Martec’s Retail FocusProcessDevelopbest practice retailprocessesPeopleEquip yourpeople with the skillsthey needTechnologySelect and implementretail technology
  24. 24. MARTEC International©Helping retailers do business more effectively. Helping vendors sell to and partner with retailers.•  This session focused on merchandising and inventory managementconsiderations and largely ignored RFID technology and the technicalaspects.•  You can learn the basics of RFID technology, and how to takeadvantage of it in operations like the supply chain, asset tracking, andaccess control, in our Retail Development Academy’s RFIDEssentials interactive e-learning course. To find out more about thisonline training, go here:Learn More?http://www.martec-international.com/products/187/rfid-essentialsOr for questions contact Brian Hume at:brian_hume@martec-international.com
  25. 25. #CCSeries13Q&A  
  26. 26. #CCSeries13Q&A    //    Panelists  Brian HumePresidentMartec International, Inc.MODERATORAlicia FiorlettaAssociate EditorRetail TouchPoints
  27. 27. #CCSeries13Cabelas:  Adding  Context  To  Next  GeneraDon  MarkeDng  Today, 2 PM ET / 11 AM PTThank  You    For  Joining  Us  www.retailtouchpoints.com/connected-consumer-2013The next Connected Consumer Series session…

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