Latest on RFID from University of Arkansas

After attending the RFID seminar at the University of Arkansas, I realized we still have a long way to go. I knew that going into it, but I had hoped for some new revelations. The process of RFID inventory tracking can play a key role in ensuring inventory accuracy in the demand chain. And as we all know, more accurate inventory counts can lead to more accurate inventory levels or "right stocking" your inventory investment.

Some key takeaways from the meeting are that apparel is ripe for RFID. Dillard's is doing some pilots with their jean category suppliers that are providing great results. This category doesn't have the overwhelming problems that exist for categories that use metals or liquids in packaging for their products. Canned soups and sodas probably won't happen anytime soon at the item level and it is difficult at the case or pallet level too.

However, the potential value proposition for RFID is enormous if we can get past the challenges. Some of the value points floating around were the following:

• Analyze and Fix Chain Inadequacies
• Repair Problems Early in Cycle
• Real Time Visibility
• Enable Exception Management
• Addl. Transparency throughout Supply Chain by
  - Tracking Merchandise
  - Reducing Shrinkage
  - Processing Claims Easier
  - Providing Targeted Recall Measures
  - Improving Global Piracy Protection
• Improve Efficiency in Supply Chain
  - Improve Decision Making
  - Reduce Time to Receive Goods
  - Optimize Inventory Management
  - Decrease Warehouse Costs
  - Automatic Monitoring
  - Allow Event Driven Notifications
• Full EPC Inventory Management Systems
  - Integrate with business process is key
  - Deliver excellent customer service
  - Location management
• Improved Speed to shelf
  - Precise execution on promotions
  - Accurate data (33% increase in promotion sales)
  - Reduce OOS
  - Increase sales

So why should a supplier invest in RFID? Try these benefits and see if there is a big enough ROI for you to make the investment.

• Enhance sales via information prompting
• Improvement in execution
• Customer Satisfaction which leads to brand loyalty
• Increased Supply Chain visibility of inventory provides enhanced execution
• Supply Chain and sales floor visibility in real time
• Improved level of execution
• Decreased sales floor OOS (out-of-stocks)
• Efficient inventory levels
• Recall and claims process
• Decreased expenses
• Decreased shrink
• Decreased out of date products (fresh inventory)

Someone also mentioned that OOS (out-of-stocks) account for 2% lost sales in the retail industry. I actually thought it was more. But if you multiply the 2% by the total retail sales from Q42006 through Q32007 of $3,884,752,000,000 or $3.9 trillion * (total retail sales less e-commerce sales) that accounts for $77,695,000,000 or $77 billion dollars in lost sales for those 4 quarters. That sounds like a pretty large benefit to me if you can see that in your demand chain. This is where an integrated Demand Signal Repository, like Velocity (www.retailvelocity.com), could help you get the real-time visibility that you need to insure you "right stock" every shelf.

* http://www.census.gov/mrts/www/data/html/07Q3.html

Category Management Collaboration Gap Narrowing

Here are some excerpts from an interesting article on Category Management from cpgmatters.com Category Management newsletter.

http://www.cpgmatters.com/categorymanagement0108.html

“Leave your brand shoes at the door,” advised Bill Bean, Director of Global Shopper Marketing Insights & Trade Research for Colgate-Palmolive. “Talk about the category, not the brand. Once that happens, just about everything magical happens.”

Barry Thomas, Director of Global Category Management for the Coca Cola, Co. added, “Move beyond the category to the entire aisle. Any work you do in the aisle has to be in context of the retailer’s view of category management.”

Thomas and Bean were participants in an all-star panel discussion at a category management conference recently in Bonita Springs, Fla. The event was produced by the Institute for International Research (IIR) with support from CPG CatNet, the trade association. CPGmatters was the official media sponsor of the event.

Added Wal-Mart’s Mertes, “In our experience there are different methods of category management. A lot of it is intentional. Companies A, B and C may offer opinions that are based on different key performance metrics. One emphasizes consumer insight; one profitability; another presents a turn model. So the buyer has to decide. We don’t get mad, we get challenged.” Mertes continued, “In chilled juices, Tropicana versus Minute Maid will present different approaches that serve their interests. But Wal-Mart 101 is ‘never run out.’ We also know we can’t run out of Sunny Delight on weekends, despite what either model says.”

Join the Velocity Team at the Walton College of Business RFID Lab

COME JOIN US!!!

Item-Level RFID: Future Direction - Current Status Seminar

Item-Level RFID Forum with initial focus on Apparel & Footwear Hosted by the University of Arkansas Fayetteville, Arkansas

Co-Sponsored by Dillard's Procter & Gamble

Date: January 30-31, 2008

What can RFID do for Item-Level merchandise, demand signal repositories (DSR) and category management? How does RFID improve processes and accuracy? How can RFID data be integrated with Retail Link and EDI 852 POS data?

Many of these questions will be answered as Dr. Bill Hardgrave presents the results of the University of Arkansas' Apparel and Footwear Item level tagging RFID research project conducted on behalf of VICS and CSCMP.

The two-day event starts with lab demonstrations at the world-class Sam M. Walton College of Business Information Technology Research Institute. Day two consists of research results, case studies and white papers.Stay on top of the future trends and attend this hands-on forum. This ground-breaking research is just the beginning of improving inventory management.

http://cscmp.org/events/rfid/index.asp

Expect Slight Sales Results Shift from Year Ago

The hottest gift in 2007 seemed to be the gift card. Wal-Mart had a slight snafu when people tried to redeem but eventually worked it out.

What does this mean to the Velocity user? It means that same store sales results compared from 2007 to 2006 week to week may show significant differences. Gift cards may not be used until weeks or even months after their purchase. When analyzing Wal-Mart's Retail Link, EDI 852, Target's Partners OnLine, Lowe's Vendor Dart, Kmart's (or Sear's) Workbench or other POS data sources, keep in mind that this shift is occurring.

Consumer RFID Education Website Published by EPCGlobal

EPCglobal has developed this consumer-oriented website to enable consumers to understand what is behind RFID and EPC and how the technology helps companies, institutions and organisations make their lives easier and safer.

http://www.discoverrfid.org/

Category Management Newsletter

Check out our new ad in CPG Matters on-line Newsletter which focuses on the latest and greatest in the world of category management.

http://www.cpgmatters.com/010308.html

Welcome to the Velocity Blog!

Welcome to our new blog!!

Within this blog, we hope to keep our Velocity community informed on all the latest and greatest new related to the retail supplier world. We will post articles and links to interesting sites along with our knowledge of recent changes to retailer POS data feeds. Our goal is to insure that your Demand Signal Repository (DSR) or POS data warehouse is fully up to current retail data standards.

We welcome comments from anyone involved with category management, sales, account management, demand chain management, customer service and in-store merchandising management.

If you would like to learn more about our expertise and solutions, you can find us at http://www.retailvelocity.com/ or email us at sales@vmtsoftware.com.

Happy 2008!
The Velocity team at Vendor Managed Technologies, Inc.

www.retailvelocity.com