Omnichannel  And  IoT:    The  Perfect  RFID  Storm  

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About  Holiday  CCS  2014  

ü 7 Webinars, 4 Days

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Ops, X-Channel, Loyalty,

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analysts and consultants

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BrightTALK  

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Today’s  Panelists  

Richard Mader Director Emeritus, ARTS

Debbie Hauss Editor-in-Chief Retail TouchPoints

MODERATOR

John-Pierre Kamel Principle,   RFID Sherpas

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What  Does  RFID  Look  Like?  

•  Usually  involves  a  handheld  reader  

•  Rapid  cycle  counts  of  inventory  

•  Number  of  counts  depends  on  product  category,  Use  Cases  

•  Does  not  need  to  update  inventory…but  should  for  best  results  

Photo  Source:    Motorola  

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RFID  SoluCon  Components  

Paper  Ticket   Adhesive  Label   Hard  Tag   Sewn-­‐In  Label  

RFID  Readers  

RFID    Tags  

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A  Quick  Recap  Of  Item  Level  RFID  in  Recent  Years  

•  Item  level  projects  picking  up  steam  

•  TesWng  new  categories,  focused  on  replenishment  

•  Department  Store  focus  

2008  -­‐  2010  

•  Omni-­‐Channel  is  a  driver  of  RFID  adopWon  

•  Display  compliance  drives  fast  ROI  

•  Expansion  beyond  replenishment  into  jewelry    

2010  -­‐  2012  

•  Round  Rock  Patent  issues  resolved  

•  Companies  open  up  about  successes  

•  Expansion  into  Fashion  

•  Luxury  segment  growth  

•  UpWck  in  European  deployments  (e.g.  Asda,  Decathlon,  M&S)  

2013  -­‐  2014  

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2008-­‐2012  

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2008-­‐2012  

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2013-­‐2014  

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2013-­‐2014  

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“ImplementaWon  of  this  next-­‐generaWon  technology  is  one  of  the  most  significant  changes  ever  in  how  the  Group’s  stores  operate.”        Pablo  Isla          Chairman  &  CEO  July  2014  

2013-­‐2014  

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Latest  News  from  Macy’s  (2014)  

•  RFID-­‐enabled  departments  outperformed  controls  by  10%  from  09-­‐2013  to  05-­‐2014    

•  Advanced  program  beyond  Replenishment  and  into  several  Fashion  categories  

•  Timely  replenishment  of  the  sales  floor  is  now  an  objecWve,  in  addiWon  to  inventory  update  

•  The  ability  to  make  single  unit  SKUs  available  to  online  shoppers  has  been  a  big  win  in  Omni-­‐channel  

•  Decreased  the  number  of  undisplayed  SCCs  in  the  Footwear  and  Luggage  to  under  5%,  compared  to  25-­‐30%  pre-­‐RFID  

 

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RFID’s  Appeal  To  Retailers  

•  Margin  contribuWon  from  increased  Full  Price    Sell-­‐Through  

•  Margin  contribuWon  from  higher  Unit  Sales  •  Reduced  shrink  (internal  &  external)  •  Labor  producWvity  improvements  •  Less  working  capital  Wed  up  in  Inventory  •  Repurposing  of  Loss  PrevenWon  budget  dollars  •  Aligns  with  Omni-­‐Channel,  Mobility  iniWaWves    

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RFID  in  Retail  

•  Long  Wme  coming,  since  late  1990’s  •  Cost  vs.  Benefit  – Shortage  – Out  of  stock  

•  Other  prioriWes  •  Y2K  •  E-­‐commerce  

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The  Silver  Bullet  

Consumer  Centric  Retail    

And    

Omni  Channel  

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Omni  Channel  

Serving  the  customer  as  they  desire.  •  Features:  – Buy  on  line,  pickup  in  store  (44%  to  58%)  – Buy  in  one  store,  ship  from  another  (Urban  Ouji=ers)  

– Buy  items  in  store  plus  items  via  on-­‐line  device  in  store  and  pay  one  sale  

– Fulfill  E-­‐commerce  order  from  stores.  

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Why  Omni  Channel  

•  John  Lewis  experienced  a  22.6%  increase  in  on-­‐line  sales  during  Christmas  2013.    AccounWng  for  31.8%  of  total  Christmas  sales  as  click  and  collect  orders  were  up  by  61.8%  over  previous  year.  (ComputerWorld.com)  

•  Macy  CEO  Terry  Lundgren  said  at  Goldman  Sachs  conference  this  month  that  they  can  ship  direct  to  customers  from  all  stores,  and  that  pick-­‐up  in  store  results  in  125%  of  intended  order.    (MarkeWng  Daily)  

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Omni  Channel  CriWcal  Success  factor  

•  Nearly  100%  accurate  item  level  inventory  •  Cannot  disappoint  the  Customer  – Drive  to  store  purchased  item  not  available  – Buy  on  line  never  receive  at  home  

•  It  can  happen  (THD  example)  •  Cost  of  buffer  stock  offsets  sales  gains    What  level  of  risk  are  you  willing  to  accept?  

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SKU  Inventory  Accuracy  

•  Industry  average  approximately  70%  – Thanks  to  Bar  codes  for  sales  recording.  

•  RFID  can  improve  to  95+%  – 98%  per  Checkpoint  – 27%  improvement  per  RFID  Research  Center  

Assume  100  customer  store  pick  ups,  RFID  changes    25  of  these                                  to  these      

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SKU  Inventory  Retain  Accuracy  

•  Physical  Inventory  – Auburn  University  20,000  items  per  hours  using  RFID  vs.  500  via  barcodes.  

•  Staff  Discipline  – Train  processes  – Monitor  to  enforce  

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Key  RFID  Use  Cases  

Within  The  Four  Walls  •  On-­‐Floor  Availability    

–  Display  Compliance  –  Reduce  Out-­‐of-­‐Shelf  

•  Asset  ProtecWon    

Outside  of  the  Four  Walls  •  Out-­‐of-­‐Stocks  •  Eliminate  Frozen  Inventory  •  Planning  and  AllocaWon        

•  Omni-­‐Channel  Support  •  InteracWve  Retail  •  Inventory  Accuracy  •  ReducWon/EliminaWon  of  

Manual  Stock  Counts  

•  AnW-­‐CounterfeiWng  •  AnW-­‐Diversion  •  Supply  Chain  Visibility  

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•  Increase  the  “universe  of  product”  you  can  make  available  across  all  channels    – Reduce  buffer  stock  as  low  as  possible  for  In-­‐Store  Pick-­‐up  and  Store-­‐to-­‐Store  transacWons  – Significantly  decrease  decline  rates  of  Fulfill-­‐from-­‐Store  transacWons,  thereby  decreasing  split  ships  and  extra  labor  of  searching  in  mulWple  stores  

Enhances  Omni-­‐Channel  

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Enhances  Omni-­‐Channel  

–  Increase  Store-­‐to-­‐Store  orders  by  ensuring  all  available  SKUs/SCC  are  displayed  for  sale,  even  if  it  is  a  onesie  

– Can  significantly  compress  the  window  between  purchase  and  pickup  

– Accuracy  enhances  mobility  capabiliWes  and  allows  for  more  efficient  locaWon  based  selling  and  alerWng  

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Internet  of  Things  (IoT)  

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IoT  Value  to  Retail  

•  1.76  Trillion  less  than  50%  realized  (Cisco)  •  OpportuniWes  – Omni  order  and  pay  anywhere  –  Intelligent  pricing  (Shelf  labels)  – Product  movement  – Equipment  monitor  and  control  – Tailored  promoWons  – Customer  service  (Wi-­‐Fi  in  store)  

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Concerns  

•  Privacy  •  Mobile  and  RFID,  NFC  one  standard?  •  AcWve  Tags,    $2  vs.  $.05  •  Self  driving  cars  

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Things  I’d  Like  (TiL)  

•  Find  my  “stuff”  (Tile)  •  Clean  out  the  “Frig”  •  InstrucWons  for  use  

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Q&A  

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Q&A   Debbie Hauss Editor-in-Chief Retail TouchPoints

MODERATOR

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Today’s  Panelists  

Richard Mader Director Emeritus, ARTS

Debbie Hauss Editor-in-Chief Retail TouchPoints

MODERATOR

John-Pierre Kamel Principle,   RFID Sherpas

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Thank  You    For  Joining  Us  

The next session in this series…

10  Ways  To  Personalize    The  Holidays    12PM  ET  /    9AM  PT  

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