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Supply Chain

The BIG Show: NRF 2015 Blog, Day 3

Yesterday was the last full day of the National Retail Federation’s BIG Show, and GT Nexus was in New York covering all the latest in retail supply chain. By GT Nexus




Panel: Lessons Learned From 2014 Holiday Shopping
Moderated by Jordy Leiser of StellaService, Inc, the panel discussed data from this past holiday season, along with omnichannel fulfillment strategies.

Some interesting retailer survey data presented by Jordy Leiser:

  • Of the top 40 performers, order cutoff dates for guaranteed delivery by Christmas varied. The earliest date was December 12. The latest was December 23. The most popular cutoff date was December 19.
  • With cutoff dates of 12/22 and 12/19 respectively, 75% of Best Buy   deliveries arrived on time via standard shipping methods, while ALL of Lowe’s deliveries were shipped by standard methods. This means they heavily shipped from store, leveraging omnichannel inventory to fulfill orders.
  • 27% sent all their packages by standard methods, while 38% sent all packages by an expedited method. 73% shipped at least one package via an expedited method.

The panel discussion covered a range of topics, from technology to fulfillment. Some highlights:

  • Michael Lackman speaking about discounts during Cyberweek: “Companies who offered discounts did much better than ones who stuck to their price points.”
  • Kacey Sharrett on inventory: “We wanted to be fair to customers, and also make sure we have stock. Inventory availability was a priority. Our biggest days were right before Christmas.” She also expanded on her inventory focus later, saying retailers need to ask the questions: “Where does my inventory live?” and “Can I understand what inventory I have where to see if I can deliver to the customer on time?”
  • Toys “R” Us fulfilled well this year, offering a guaranteed cutoff date of December 23. They employed shipping from stores in more than 800 stores across the country.

Panel: Monetizing Consumer Demand with Predictive Analytics and Real-Time Inventory Visibility
Bob Carpenter of GS1 moderated a discussion about how retailers can not only get information about consumer trends, but also make better business and supply chain decisions. Panelists included Peter Longo of Macy’s, Eileen Dileo of Hudson’s Bay Company, and Ken Duane of PVH Corp. The discussion centered around 3 key points–the elements of omnichannel success, the role of technology in solving inventory problems, and the need for businesses to collaborate.

Omnichannel Success
Peter Longo: A few years ago omnichannel wasn’t a word. Multichannel was an idea, but unformed. Omnichannel as a concept is evolving. If you put the customer first, a lot of existing business processes do not satisfy the growing customer demand. Macy’s has spent the last few years trying to put together a single view of inventory. Three fundamental ways to achieve success are to have great product, common and similar pricing, and great marketing.

Eileen Dileo: Everyone is time-starved, everyone wants their inventory immediately. We need to be able to deliver that.

Ken Duane: 50% of PVH business is overseas. We split the world into 3 pieces – Asia, Europe, the Americas. We have supply chain hubs all over the world, and we plug into those places. We try to pay attention to the differences in those regions in their supply chain, and work with partners to meet goals.

The takeaway: The business who does fulfillment the fastest, smartest, and with the most accuracy will win.

Technology & Inventory
Peter Longo spoke about inventory accuracy. Inventory degradation occurs at about 2-3% a month. “You don’t want to make decisions based on bad data.” Macy’s used to focus on replenishment-based recycling of inventory. Moved focus to delivering, for customers, robust options to buy online and pick up in stores. By moving the inventory management around this idea, Macy’s has reduced $1B of inventory from stores. RFID technology is enabling a revolution in inventory. “We’ll never run out of ideas on how to use RFID,” said Longo. He introduced the concept of “pick to the last unit,” meaning that the last unit of a product in every store is easily locatable and sellable.

Ken Duane spoke about how there’s always a cost to technology, but sometimes you have to go all in. Such was the case with RFID for PVH. “You need to take costs from beginning to end, because there’s a huge margin improvement.” He also highlighted how even small suppliers are beginning to see RFID as a standard operating procedure. He noted that “you need to know where your inventory is at any time, in any part of your supply chain, all the time.”

Eileen Dileo, meanwhile, described a successful implementation of RFID for shoes in her stores, and extended the concept further up the supply chain: “I think the single view of inventory is one of the most important things that have worked for us. The world reacts differently in different parts. You can maximize inventory. But if you’re shut down because of a snow storm in Alberta, and you can use inventory from one store to fulfill another’s, [everyone wins.]”

The Need to Collaborate
Moderator Bob Carpenter made a strong statement: “There is a network effect for the industry to move forward. There is a need to collaborate.”

Ken Duane described the importance of partnerships: “The future will encourage us to work more closely together. We have to narrow down the noise out there.” He later added, “We’re partners. We work for win-wins. Or we look for common solutions. You have to talk about your issues. How can I be a better partner? If you don’t collaborate you have no shot.”

Peter Longo: “The age of I win, you lose [is over], as opposed to we both find ways to win.” “You are collaborating around an organizing agent that allows trade and commerce to go smoother.”

But perhaps the strongest call for collaboration and the need to operate as part of an ecosystem was made by Eileen Dileo at the end of the discussion, when she turned to face the audience directly. “To our suppliers and retail partners sitting out there–we need you. We cannot do this alone. We cannot do it in a silo.”


Key Perspectives on International Merchandizing
Some highlights from the session featuring Pierre-Antoine Perrot, COO of Petit Bateau, Anastasia Charbin, fashion marketing director at Lectra, and Alan Wragg, category technical director at Tesco.

  • By 2020 India, Brazil and China will account for 28% of apparel demand. Low levels of saturation = big room to grow.
  • No single dominating brand exists globally. Each country varies. Local brands continue to dominate in most markets. Vivarte, Mulliez are the top two in France. MS and Alda in the UK. TJX and Gap in US.
  • Irrational expectations lead to unsustainable business practices. Retailers have taught consumers to wait for discounts.
  • Average unit price from 2008 to 2013 has dropped.
  • Product has to be localized.

Final thoughts from Pierre-Antoine Perrot:
Internationalization is a great challenge to be in the right countries. Localization, with SKUs, seasons, etc. creates a great challenge. Process is key. In order to succeed in our international expansion we launched a transformation plan for the following stages:

  1. Develop: cut 4 to 6 weeks of lead time using PLM (collaborate with all suppliers and shops).
  2. Production: deployed planning and lean management (cut to less than 4 weeks).
  3. Delivery: a new international logistical network. Cut 3 to 30 days.
  4. Benefits: more time for designer, faster replenishment.

BIG !deas Session: “Rethinking” the Omnichannel Fulfillment Strategy
This morning Bruce Hicks, President and CEO of RTC Quarterion, Darryl Jenkins of TSC Stores Canada, and Joe Skorupa of RIS News led a discussion on a topic very near and dear to us at GT Nexus–how supply chain challenges are holding back retailers from delivering true omnichannel fulfillment.

The discussion started with the question, “How do you get very precise knowledge of your inventory?” Both Jenkins and Hicks highlighted the importance of assessing your current situation–figuring out what items go out of stock, what their margin impacts are, and what channels they’re needed in–before designing a solution. Big ticket items are usually high volume, low margins, and are frequently the most out of stock. High margin items, on the other hand, can generally absorb more shipping cost. Optimizing fulfillment means having visibility into your entire supply chain across the omnichannel.

Skorupa asked the audience how many people feel their omnichannel fulfillment is where it needs to be, and only around 10 people in a room of 200 raised their hands. Jenkins responded to the idea of technology investment being high by mentioning how freeing up working capital is important. Paying vendors early with payment terms helps establish that. So does assortment tailoring.

Also discussed was back-end transparency, and the alerts and notifications that need to take place to achieve it. But technology doesn’t always get adopted. “There’s a lot of analysis paralaysis, across technology, operations, and management,” Hicks declared. “It’s an investment worth making. But I see so many retailers who are scared of being wrong, and do nothing. Analysis paralysis is not going to work. You need to take some chances.”

Best of NRF 2015: Top 10 Takeaways

1. Eye-Catching Booths

  • eBay showcased the Connected Store concept they deployed for Rebecca Minkoff late last year. The solution brings the power of digital to the physical world with a huge touchscreen wall that allows customers to send items directly to the fitting room. Once in the fitting room the experience continues with another touchscreen where shoppers can ask an associate to bring them another size or color, and even pay for their purchases.
  • Shelfbucks, a provider of beacon-based technologies, highlighted its work with Gamestop. The video game retailer is currently piloting Shelfbucks beacon-based marketing system in 30 stores in the Central Texas market. The unique solution features a pull rather than push interaction with shoppers. Customers that want to learn more about a certain product or receive promotional information can simply touch their mobile device to one of the many beacons in store and view the content directly on their smartphone or tablet.

2. Retail Rollouts

  • ThoughtWorks highlighted the new e-commerce engine they built for Mitchells’ website - the upscale retailer has built its reputation on customer service and is taking that experience into the digital world. One of the most interesting features of the website is the customer’s ability to interact with their personal stylist that they have built a relationship with in-store.
  • PCMS, an independent provider of enterprise and store-level software solutions to the retail industry, announced that Half Price Books has selected the VISION BeanStore POS system for its stores nationwide. PCMS is in the process of rolling out the system at all 117 Half Price Books stores.
  • Chico’s FAS is using MongoDB to customize product and application data on their in-store touchscreen, called “Tech Tables.” The touchscreen connects online and in-store channels to create a highly engaging shopping experience.
  • Stage Stores implemented Ingenico Group with Chase Paymentech point-to-point encryption for its 900 stores across the U.S.
  • Home Hardware, Canada’s largest dealer-owned hardware and furniture cooperative, completed an implementation of Shopatron‘s e-commerce fulfillment platform for in-store pickup. Customers can now order online for same-day in-store pickup or have products shipped directly to a local store for pickup.
  • Save Mart Supermarkets entered a multi-year agreement for Revionics’ SaaS-based Price Optimization Solution and its Advanced Analytics services, which include the Key Value Item Analysis and Store Cluster Analysis.

3. New Tech Deployments

  • HP announced its ElitePad Mobile Retail Solution which helps improve operational efficiency with a mobile solution driven by the HP ElitePad 1000 Windows-based tablet. With a durable case to help protect the tablet, the solution accepts a range of third-party payment entry devices, and easily connects to the HP Retail Expansion Dock for an instant fixed POS workspace.
  • Zebra Technologies’ Workforce Connect Voice allows retailers to extent their PBX features to mobile computers, turning them into powerful mobile desk phones that create a direct link between associates and customers.
  • Kronos Incorporated and Axsium Group jointly launched a retail store performance plug-in. Powered by Kronos Workforce Analytics application, the plug-in uncovers gaps in important areas that impact customer and employee satisfaction, and creates optimized associate schedules by balancing working hours, employee availability, and consumer demand.
  • Fujitsu Retail Mobile Solution provides a complete mobile platform that enables use of POS peripherals when the tablet device is docked and use as a mobile POS and payment terminal when undocked. It offers a new portfolio of ruggedized tablet devices with long battery life, smart-back facility for card payment, and docking and multi-charger stations.
  • EarthLink launched EarthLink Secure Storefront, a suite of managed security, network and IT services tailored for the rapidly-evolving retail environment. The solution helps retailers protect against threats, maintain PCI compliance, connect with mobile customers, and capture business intelligence to support revenue growth.
  • Panasonic introduced the Powershelf, a fully integrated retail merchandising solution to combine battery-free, wirelessly powered electronic shelf labels (ESLs), beacon activated mobile advertising capability, inventory and price management software and out-of-stock sensor technology.
  • SAP SE announced plans to launch the SAP Assortment Planning for Retail application, which will enable retailers to cluster stores using attributes then select and plan items per store cluster in order to maximize sales and profit.
  • Toshiba Global Commerce Solutions and Microsoft Corp. launched a combined solution to help retailers deliver customer experience through omnichannel customer engagements, delivering software and implementation services on the Microsoft Dynamics platform, as well as plans for the future global availability of a combined solution, TCxGravityTM, which will provide seamless brand experiences to build lasting loyalty.
  • Lexmark International debuted its new Digital Endcap solution that helps retailers increase the speed and accuracy of in-store signage execution, enabling them to move inventory, ensure proper brand representation and increase revenue.
  • Cloud-based distributed order management provider Shopatron announced its new pricing model based on a fixed monthly fee with unlimited order volumes and its “Allied to Win: Free Two-Year Pilot”, representing the first suite of omnnichannel ordermanagement solutions on a free trial basis.
  • Revionics’ Promotion Optimization solution was unveiled, which provides enhanced collaboration capabilities, highly visual planning modules and interactive “what-if” scenario simulation to optimize both the number and mix of promotional vehicles.
  • Verifone and Samsung announced a global partnership that will deliver advanced, Android-based mobile point of sale (mPOS) solutions to multi-lane and enterprise retailers.

4. Retail Tech Companies Join Forces

  • Demandware, a provider of enterprise cloud commerce solutions, announced that it has acquired Tomax, an enterprise cloud software company that provides an integrated solution for retail POS and store operations. The combination of forces will create a unified commerce platform, allowing retailers to deliver seamless experiences across all consumer touch points.
  • Tyco Retail Solutions, provider of retail performance and security solutions, reached an agreement with Creativesystems, a provider of RFID solutions. Together the companies will accelerate delivery of RFID-based inventory visibility applications for retailers globally.
  • The conference also served as an industry coming-out party for several companies. First, Oracle‘s acquisition of the MICROS Systems solutions for hospitality and retail, which will Oracle Retail’s functionality to include applications for brand compliance management, loss prevention, order management, order brokering, and workforce management, helping customers realize a more extensive - and more profitable - “commerce anywhere” business model. Second, following its recent acquisitions of QuantiSense and ShopVisible, Epicor Software Corporation presented its most extensive and inspired retail technology solutions lineup to date. The company will have a strong presence on the show floor this year with three booths - Epicor, Epicor | QuantiSense, and Epicor | ShopVisible – showcasing the Epicor Retail’s new and expanded range of retail solutions, as well as its extended omnichannel cloud offering powered by retail analytics. Lastly, Motorola Solutions’ Enterprise Business is now a part of Zebra Technologies, bringing together real-time asset visibility, rugged mobility and cloud technology to lead the way in Enterprise Asset Intelligence – changing the limits of what retailers can know about their business.

5. Retail Tech Companies Join Forces
Many companies and brands today have the same overarching problem: how to connect with fans of the growing business and make that sustainable. The NRF Big Show 2015 kicked off on Sunday with “Game Changer: Loyalty and Performance Lessons from Passionate Sports Fandom”. The sports industry has built its empire around loyal, passionate fans, as well as created engaging experiences to drive fan interaction. Through the use of big data, the various franchises and companies are able to not only deliver personalized experiences, but also leverage these insights for drive better on-field performance. “A lot of focus is set on how to bring the new generation into the mindset,” commented Oliver Bierhoff of the German National Team. “It must begin with leadership and be guided through the process – whatever atmosphere and philosophy is created by the leadership must be reinforced by the company as well as the families.”

6. Time Magazine Person of the Year at RetailROI SuperSaturday
The sixth annual SuperSaturday event presented by RetailROI raised $400,000 in charitable contributions and had standing-room-only attendance to see Katie Meyler, founder of More Than Me and the recipient of a recent Time Magazine’s Person of the Year cover story. Meyler was one of the courageous heroes honored for her efforts to battle Ebola in Liberia. When every organization left Liberia, Meyler stayed to provide support in the worst hit section of the capital city. Her appearance at SuperSaturday was her first appearance in the U.S. since becoming a “person of the year” and the night before her session she was greeted at the airport by a camera crew from NBC/TV and featured on the national newscast. In addition to Meyler the strong agenda featured speakers from Chico’s, Nordstrom, Hudson’s Bay Company, Sur La Table, Google, Gartner, Forrester and PwC.

7. Retailers Rock
The sixth Annual RIS News Rock n’ Roll Retail event saw over 200 retailers flood into the Hard Rock Café in Times Square to see their peers take to the stage. Three bands consisting of vendors and retailers rocked the venue all night long with classics spanning the 60’s to today. The annual NRF tradition offered retailers and solution providers alike the opportunity to let their hair down after working the show floor all day long.

8. Kohl’s Pilots Beacon Technology
IBM hosted a roundtable discussion featuring Kohl’s EVP of digital innovation Ratnakar Lavu. Lavu discussed the digital initiatives his team is currently developing and deploying including the use of beacon technology. The retailer is currently testing location-awareness technology in 22 stores in both tech-savvy and non-tech-savvy markets. Unlike some retailers that are using beacons to simply push offers to shoppers’ smart devices, Kohl’s is more concerned about creating an experience for the customer with a high level of personalization that make their most valuable customers feel like they are being treated differently. “We haven’t cracked the nut on beacons just yet,” Lavu says. “But one thing is for sure for us it is not just about the offer, it is the offer and the experience.”

9. Belk Grows Bottom Line with Effective Scheduling
Reflexis hosted a closed door session for analysts and journalists featuring the largest family owned department store in the U.S., Belk. Eric Bass, SVP of staffing and productivity discussed how the chain has leveraged Reflexis Labor Scheduling, Advanced Reporting, and Time and Attendance solutions to fuel bottom line growth. Before implementing the solutions Belk allowed their associates to build their own schedules based around personal preferences. Now associates must schedule their work hours with an eye on the store’s busiest hours. At least 80% of an associate’s schedule needs to align with store traffic patterns. Despite the fact that associates now have less control over their schedules, workers are reporting increased workplace satisfaction. Associates at Belk are commission-based and increasing staffing during the chain’s busiest hours is a win/win situation for both the retailer and its associates.

10. Exploring the Disconnect between Business and Data
Mobile devices to social networks, new payments to personalization – retailers are battling to keep up with the evolution of technology both in the store and in the hands of customers. Greg Buzek of IHL Group, Joe Skorupa of RIS News, Alan Outlaw of Toshiba Global Commerce, and Grant Shih from Carter’s shared insights and opinions on the roadmap through 2015 and how it aligns with research from the 12th Annual RIS News/IHL Group Store Systems Study. “The thing about IT is that flexibility and security don’t usually go hand-in-hand,” noted Alan Outlaw, VP of commerce technologies for Toshiba Global Commerce Solutions.

Source: Retail Info Systems News


The BIG Show: NRF 2015 Blog, Day1 | Day 2 | Day 3

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