Keeping Shelves Stocked at Retail Show
It was all about inventory
at this year’s Retail Systems 2002 and VICS Collaborative Commerce Show
and Conference, held at McCormick Place in Chicago. How to manage it, when to
replenish it, how to ensure customers find what they want when they want it. One
of the major problems retailers have is keeping their shelves filled with the
right product, especially when product is located in their back storerooms.
That’s why so many attendees
were discussing RFID and whether it could help solve this problem. RFID holds a
lot of promise. But retailers have several reasons why they are holding back on
implementation. Two reasons are cost and cultural changes that must occur
before retailers willingly and easily share data among their supply chain
partners. “It’s down to share versus sell,” said Rik
Schrader, vice president of business development and marketing and sales at
Aquitec. “There’s a history of competition that must be
overcome.”
Several executives
commented that RFID will change the retail world, assuming retailers can
cooperate. RFID tags and smart tags were frequently mentioned as a way to solve
the replenishment problem, providing retailers with real-time data of when a
product was removed or added to a shelf. However, retailers are reluctant to
spend the money necessary to implement such solutions. Even at a chip cost of
five cents, many thought the price too high to invest in this technology.
The Gap Inc., though, was
one company that spoke about its pilot RFID project in one of the conference
sessions. It tested smart tags on denim apparel throughout its supply chain.
Antennas were built into shelves at the stores. As items were removed, that
data was sent to a sales associate, who would replenish the shelf as needed,
noted Neco Can, director of project management at Gap.
It was an expensive pilot,
yet it yielded good results. In tests, the RFID system helped improve tracking
accuracy, boosting it to 99.9 percent. It also provided assistance at
point-of-sale operations through mass scanning at checkout, speeded returns
processing and facilitated in-store pickups of Internet orders. “It
provided real-time inventory tracking, said Bill Allen, eMarketing manager of
RFID systems at TI, one of the contractors of the pilot.
Another solution receiving
a lot of interest, but one that will also have to overcome the resistance to
data sharing, is UCCnet, developed by the Universal Product Code Council.
UCCnet is not a retail exchange. The perception that it is, though, is slowing
acceptance among retailers. As of the show, 101 retailers have signed on as
subscribers.
UCCnet is basically a
repository. Product data, such as weight, dimensions, size and color, are
entered by the manufacturer into this repository. It then structures these data
into a standard and consistent format for exchange between ordering systems. This
“data synchronization” ensures that all trading partners use
identical and accurate item information.
The benefits of the UCCnet
system are that it will reduce supply chain costs associated with errant
purchase orders, returned shipments, multiple item definitions, lost shelf time
and other logistics system errors. It eliminates multiple manual transcriptions
of the data required to support new item introductions because data are entered
into the system only once. Manufacturers can either load data into the system
directly or use an alliance partner. Any company can store its product
information, and then distribute that information simultaneously in near real
time to any number of trading partners that subscribe to UCCnet.
Wal-Mart is one of the
largest corporate supporters of this system. Said Randy Salley, vice president
of merchandising systems at Wal-Mart Stores Inc., “It’s all about
standards.” The company has 18,000 suppliers that it’s urging to
subscribe.
And, lastly, biometrics for
point-of-sale applications is emerging from pilot applications and into actual
use. Representatives of Indivos, one of the suppliers of this technology,
discussed several retail implementations, primarily in the northwest sections
of the country. Biometric POS systems are popular with retired shoppers, as
they don’t have to carry cash. Instead, they can select their purchases,
place their index finger in the finger scanner and pay for the purchases that
way. The system stores credit card information associated with the digitized
fingerprint in a secure format. Retailers like it because it reduces the number
of invalid charges.
— Leslie Langnau, senior technical editor
