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Optimizing Omnichannel Results with RFID

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This presentation explores omnichannel fulfillment models, including the use of RFID to improve conversion rates, maximize inventory utilization, and ultimately deliver a better shopping experience.

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Optimizing Omnichannel Results with RFID

  1. 1. May 2012August 2013 Optimizing Omnichannel Results with RFID Featured Speakers: Bill Toney, VendorNet, Inc. Larry Arnstein, Impinj, Inc. August 2013
  2. 2. August 2013 Bill Toney Senior Vice President, Omnichannel Solutions Larry Arnstein Vice President, Business Development Optimizing Omnichannel Results with RFID • Omnichannel optimization via RFID • RFID in retail today • RFID deployment options • Store Performance Simulator • Q&A Today’s Agenda
  3. 3. August 2013 RFID Overview • Why is RFID Being Adopted in Retail? – Buying cycles are moving to real-time with mobile – Industry modeling has proven a 3% - 5% monthly inventory distortion at the SKU level with retail apparel – Impacts in-store sales & customer satisfaction – The ROI is broad once PI is fixed • Stores, E-Com, Supply Chain & Loss Prevention • What are the Technology Advantages? – You can count 40,000 units/hour vs. 250 units/hour with barcode – Serialized GTIN generates exact SKU depth
  4. 4. August 2013 RFID Omnichannel Optimization Curve 0 2 4 6 8 10 12 14 1 2 3 4 5 6 7 8 9 10 11 12 Standard RFID InternalRateofReturn Time
  5. 5. August 2013 Demand versus Assortment 19% 81% Retail Assortment Across Channels Same Different 51% 32% 17% Consumer Demand Research online; buy instore Research online; view in-store, buy online View in-store; buy online Source: CSCMP Supply Chain Quarterly 6/12Source: Accenture 3/13
  6. 6. August 2013 Omnichannel Paradigm Stores Call Center Direct Mobile Ship-from Store Intelligent Commerce Care In-Store Pickup Personalization Regional Fulfillment Cross Border Trade Associate Ordering Returns
  7. 7. August 2013 59% would still purchase companion items if out-of-stock item secured* 43% shop competitors when 1 item is out-of-stock* 10-40% incremental ecommerce revenue *Source: Cross-Channel Brand Interaction: 2012 Consumer Preferences; Demandware and Sterling Eliminate Stock Outs with Ship-From Store
  8. 8. August 2013 Key Omnichannel Opportunities with RFID Ship-From Store • Reduced Safety Stock Levels – Increased revenue with more ATP inventory – Optimize working capital • Improved Fill Rates on Initial Pick Process – In-store labor optimization with improved PI accuracy – Customer satisfaction increase with items with low SKU depth • Enable Broader Same Day Delivery Models • Revenue increases with delivery model • Strategic enabler with emerging faster delivery competitive landscape • Customer satisfaction impacts
  9. 9. August 2013 43% online shoppers use in-store pickup* 37% purchase additional items* 33% of consumers would drive more than 25 miles to pickup in-store Immediate Availability and No Shipping With In-Store Pickup *Source: Forrester Research
  10. 10. August 2013 Considerations for Executing In-Store Pickup • In-store Inventory Accuracy is Critical • Accuracy • Real-time update • Item and Store Participation and Rewards for Field Management • Merchandise selection • Store qualification • Thoughtful Pickup Location • Customer ease • Attachments • Training and Store Operations • Established protocols and training • Incentive plans
  11. 11. August 2013 Key Omnichannel Opportunities with RFID In-Store Pickup • Broader ATP Inventory Assortment with ISPU • Increase revenue by improving ATP inventory levels - Potential large impact here depending on SKU depth • Largest impact is “Shallow” SKUs per store • Improved Fill Rates and Faster Picks • In-store labor optimization with improved PI accuracy • Enables emerging location services model for both ISPU/CRM • Customer satisfaction with ISPU
  12. 12. August 2013 2+% incremental enterprise sales are captured sales from Associate Ordering Systems (AOS)** 40-70% of consumers leave stores without buying everything they came for 70% of those “lost sale” consumers shop a competitor to find item **Source: Cross-Channel Brand Interaction: 2012 Consumer Preferences; Demandware and Sterling Stock Outs Happen In-Store Too
  13. 13. August 2013 Considerations For Executing AOS • Realign Measurement and Rewards for Field Management • Store Managers • DM • RVP • Refocus and Train Store Associates • Up-front training • Daily huddles • Technology is Straightforward • Tablets • Kiosk • Fixed stations
  14. 14. August 2013 RFID in Retail Today
  15. 15. August 2013 Retail Adoption Retail is going through huge transformative changes. Retailers taking bold steps, catalyzed by the need to provide full omni- channel integration, a differentiated customer experience, and improved margins. RFID is a core foundation. -- Bill McBeath, ChainLink Research 470 1,176 1,853 2,660 3,400 4,485 6,353 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Global Passive UHF EPC RFIDTag Units Source: VDC Research
  16. 16. August 2013 Products People Want Inventory Optimization Omnichannel Store Availability Perfect Shopping Experience RFID in Retail
  17. 17. August 2013 “We've spent the last 153 years building warehouses, we just called them stores.” “We're extremely excited about the accuracy that this [RFID] is going to bring to our business, because having the exact volume - exact quantity of product in the stores when we think we have it - will be a huge sales driver.” Robert Harrison Chief Omnichannel Officer Peter Sachse Chief Stores Officer
  18. 18. August 2013 RFID Essentials 2. Read them in the store 1. Apply & encode tags at the source
  19. 19. August 2013 Handhelds Most Popular Deployment Model • Easy to deploy • Frequent cycle counting
  20. 20. August 2013 Hands Free American Apparel • First full chain deployment hand held solution • Moving to hands-free solution • Full-time inventory visibility
  21. 21. August 2013 Overhead Solution • Centerpoint – Back to front visibility – Large tag populations • Continuous Monitoring – Cumulative inventory • Perimeter Visibility and Security – Small tag populations • Tag Locationing
  22. 22. August 2013 Basic Inventory Management Revenue 3% - 8% increase Operating Profit 12% - 40% increase Inventory counting >95% faster Inventory accuracy >95% sustained On-shelf availability 5% - 10% better Frozen out-of-stock Eliminated Selling from back stock 75% reduction Internal theft 50% reduction Buffer stock limits Reduced Associate Utilization Increased Omnichannel Optimized
  23. 23. August 2013 How can you estimate the value of improved execution? Operations v. Planning A Thought Experiment Perfect Operations OOSOOS Imperfect Operations OOS OOS OOS Due to Planning Due to Execution XS S M L XL
  24. 24. August 2013 Impinj Store Performance Simulator Try it for free at http://sps.impinj.com
  25. 25. August 2013 About Impinj Impinj & our partner network deploy RFID solutions for retailers & brand owners globally Encoding Software/Services RFID Readers ChipsRFID Tag Chips RFID Readers & Antennas Platform for Gen2 RFID Solutions >180 Patents Issued & PendingApplication Interfaces
  26. 26. August 2013 What is Omnichannel Really? “Omnichannel is most importantly about creating a compelling, integrated customer experience that spans all the customer’s interactions with Saks – regardless of it being in- store, online or in any other way. ” Saks Direct President, Michael Burgess
  27. 27. August 2013 Bill Toney Senior Vice President, Omnichannel Solutions btoney@vendornet.com Larry Arnstein Vice President, Business Development larry.arnstein@impinj.com Questions & Answers

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