Retail Information Services
Proprietary and Confidential
Presented by:
Philip CalderbankDirector Global Marketing RFID/SecurityRetail Information Services
INFORMATION SYSTEMS COMMITTEESpring 2007 Meetings
ISC Spring 2007 Meetings
Retail Information Services
Proprietary and Confidential
Agenda
• Overview AD Retail Information Services (RIS)• Business Drivers Supplier/Retailer• Supplier Benefits • Retail Benefits
– Uses– Case Studies
• Retail Information Services– Ticket Express – We do it for you– Starter Kit – Do it yourself
ISC Spring 2007 Meetings
Retail Information Services
Proprietary and Confidential
RFID in RetailRFID in Retail
+ =
•Focused on apparel and footwear industries
•Billions of price tickets, hang tags, woven / care / heat transfer labels every year
•More than 40 Service Bureaus / Ticket Centers worldwide
•Custom RFID item tags specifically developed for apparel applications
Avery Dennison Who are we ?
ISC Spring 2007 Meetings
Retail Information Services
Proprietary and Confidential
Avery Production FacilitiesHK – Germany - USA
Converted RFID Label
RFID Inlay
RIS Label Production
RFID Label ManufacturePrint & Convert
ISC Spring 2007 Meetings
Retail Information Services
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RFID a Major Time Saver
RFID avoids the need for line of sight and provides the ability to read multiple tags at the same time
Exit loading dock 5
READER
Track & Trace
Match ShipmentTo
Purchase Order
ISC Spring 2007 Meetings
Retail Information Services
Proprietary and Confidential
A Perfect World
Increased Revenues
Reduced Costs
IncreasedProfits
RIGHT PRODUCTRIGHT PLACE
RIGHT AMOUNT
SECURE ENVIRONMENTRIGHT TIME
€€€€
ISC Spring 2007 Meetings
Retail Information Services
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Avery Dennison’s RFID position
Chip Designand
Manufacturing
Label Converting
Inlay Assembly
Pre-programmed RFID tags (Service Bureau) / Printers /
Applicators
Antenna Design and
Manufacturing
Avery Dennison RFID Division
Avery Dennison - Retail Information Services
Other Converting/Printing Partners
Chip Partners
User (Factory / DC)
ISC Spring 2007 Meetings
Retail Information Services
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Business Case Economics
BusinessObjectives
Maximize Economic Value Added(Maximize Operating Income while Minimizing Capital Costs)
IncreaseRevenue
IncreaseRevenue
ReduceOperating Costs
ReduceOperating Costs
OptimizeAssets Employed
OptimizeAssets Employed
• Increased on-shelf availability
• Improved customer service
More responsive production
Reduced order cycle times
Automatic replenishment
Enhanced collaboration
• Eliminate manual physical inventory counts
• Increased shipping and receiving efficiency and accuracy
• Faster picking process in the warehouse
• Reduced number of unsaleable products (spoilage, seasonal & promotional items)
• Improved stock visibility and traceability
• Reduced inventory levels• Improved forecast
accuracy• Improved visibility
• Reduced warehousing requirements
• Improved productivity through JIT delivery and information sharing
RFID Benefits
RFID In Retail
Enhance Safety & Quality Control
Enhance Safety & Quality Control
• Reduced shrinkage• Enhanced responsiveness
to product recalls and food safety concerns
• Reduced exposure to public safety risks (e.g., hazardous materials)
• Better monitoring of cross-border shipments
• Increased visibility into recycling
RFID enabled Retail supply chain-
Right Product – Right Place – Right TimeIncrease Sales/Reduce Costs
ISC Spring 2007 Meetings
Retail Information Services
Proprietary and Confidential
Mobile Stock Taking
Permanent Inventory
Taking
Searching of Articles,Product Information
Cashing
RFID Retail
ISC Spring 2007 Meetings
Retail Information Services
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On-shelf availabilityBenefiting Retailer & Supplier
A Recent IGD survey showed that the grocery sector in the UK achieved 90% availability, and a 4% improvement would yield a 1% increase to the bottom line (1)
Reader
StoreReader
Improved on-shelf
Availability
An RFID solution provides accurate information about what’s in
storeaccurate information about back room
versus shelf the ability to improve handling / rotation
of fresh / perishable tighter control over theft / shrinkage
ISC Spring 2007 Meetings
Retail Information Services
Proprietary and Confidential
Out-of-stock / revenue opportunity management
• Minimizing out-of-stocks increases revenue potential
• Increasing visibility to sale data and inventory levels helps
– speed accurate on shelf replenishment
– Ensures Right Size – Right Style
• Sharing inventory and consumption data with suppliers for a more efficient supply chain
ISC Spring 2007 Meetings
Retail Information Services
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RFID Store Example
A
Receiving
B
Shelf inventory
C
Stocking
D
POS
EReplenishment
• Identify cartons via RFID handheld• Previously received ASN contains carton contents
• Once a day, store associates take full inventory of products on display
• Compare on-shelf “RFID inventory” to model stock and restock accordingly (see also Case 1)
• RFID reader at POS counter• Automatic generation of sales order / inventory reduction
• Automatic preparation of replenishment orders for OOS items
Sales Floor Back Room
ISC Spring 2007 Meetings
Retail Information Services
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Case studies illustrating these RFID benefits
1. Reduced out-of-stocks in store
2. Faster / better customer service
3. Backroom / in-store efficiencies
Case Studies
ISC Spring 2007 Meetings
Retail Information Services
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Reduce retail out-of-stocks
1. Take “RFID inventory” once a week
2. Compare to “system inventory” / planogram
3. Restock accordingly to ensure on-shelf availability
Benefits both Retailer and Brands
“It’s Retail 101 – if you restock according to your planogram every morning, your sales are going up. That’s why you plan an optimum shelf count in the first place”
VP IT, Retailer
CaseStudy 1
Marks & Spencer
ISC Spring 2007 Meetings
Retail Information Services
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Hardware
Cart-based RFID reader
RFID hang tags on garments
CaseStudy 1
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Retail Information Services
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Pilot Results …
Reduce retail out-of-stocks
CaseStudy 1CaseStudy 1CaseStudy 1
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Retail Information Services
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Case Study 2
Faster/better customerservice
ISC Spring 2007 Meetings
Retail Information Services
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Faster customer service
1. Back room and supplier DC inventory tagged with RFID
2. Store associates have handhelds that show inventory by size / style (in back room and DC)
3. RFID enables faster customer service – immediate response to inquiries and less time spent in back room
Footwear retail example (Japan)CaseStudy 2
ISC Spring 2007 Meetings
Retail Information Services
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Faster customer service
CaseStudy 2
ISC Spring 2007 Meetings
Retail Information Services
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RFID in Footwear Retail - Results
Without RFID With RFID• 1.8 pairs shown every 12
minutes• 3 pairs shown every 12 minutes
• Customers doubt accuracy of paper inventory book
• Customers more trusting when shown on computer
• Status quo; no sales lift • 10% lift during busy Oct-Dec holiday season
Source: Kurt Salmon Associates
ISC Spring 2007 Meetings
Retail Information Services
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Case Study 3
Backroom andIn-store efficiencies
ISC Spring 2007 Meetings
Retail Information Services
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Increased efficiencies at retail
1.Every single garment is tagged with RFID at DC
2.RFID read points in store e.g. at receiving, POS
3.Associates use handheld RFID readers
How can RFID save cost in a retail store?CaseStudy 3
ISC Spring 2007 Meetings
Retail Information Services
Proprietary and Confidential
Increased efficiencies at retail
How can RFID save cost in a retail store?
RESULTS• Speed up goods receiving – processing 650 items in
30min compared to 2 hours• Taking full store inventory in 45 minutes (one employee)
instead of two days (four employees)• Inventory accuracy: 80%99%
“Everybody claims that their inventory is accurate, but only with RFID do we really find out where we stand”
Retailer
CaseStudy 3
ISC Spring 2007 Meetings
Retail Information Services
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Item tagging Benefits
Supplier Benefits
2. RFID in Logistics = Reduced Cost of Logistics
• Checking product shipments against PO / less charge backs
• Real time visibility & order accuracy / less safety stocks• Less safety stocks /less warehousing/less handling• Identify Choke Points/speed up delivery
1. RFID in Store = Order Uplift
• Real time visibility = Improved Order Accuracy• Accurate Stock Counts = Correct Stock Replenishment• Right Product – Right Place – Right Time = Sales Increase
Sales
ISC Spring 2007 Meetings
Retail Information Services
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Service Bureau / Ticket Express™
US “Master” Customer
Factory /Contract
Manufacturer
Purchase Order
Ticket Center
Pre-printed tags /
tickets / carton labels
Via EDI/…• Ship to• UPC• Vendor• Barcode …
ISC Spring 2007 Meetings
Retail Information Services
Proprietary and Confidential
Changing Vendors
US “Master” Customer
Contract Manufacturer
1
Ticket Center
Via EDI/…• Ship to• UPC• Vendor• Barcode …
Contract Manufacturer
2
Purchase Order
Purchase Order
ISC Spring 2007 Meetings
Retail Information Services
Proprietary and Confidential
Two Implementation Models for RFID
Description
Implications
• Pre-programmed RFID labels ordered from 3rd party
• Labels pre-programmed, shipped to facility, held in inventory until applied to case/pallet
• Lower investment / technology risk (still requires reader and software investment)
• SKUs, labels must be pre-defined in advance, must stock SKU specific labels
• Facility invests in RFID programming equipment
• RFID labels programmed in the customer facility (plant or DC) either in batch or real-time
• Must invest in RFID programming equipment / have data management capabilities
• Only hold non-SKU specific label inventory
RFID Service Bureau In-house Programming
ISC Spring 2007 Meetings
Retail Information Services
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RFID Source Tagging - Overseas
RFID Service Bureau
/Ticket
Express*
RFID Supply Chain
Software
(In-house programmi
ng)*
(*) Simplified
USVendor
Service Bureau
Data incl. EPC
Asian Factory
RFID Labels
Vendor DC (US)
Retailer DC (US)
Cases/pallets
Retailer DC (US)
Vendor DC (US)
Cases/pallets
Asian Factory
USVendor
RFID Labels
RFID Supply Chain Software
• Label format• EPC generation• P/O management• ASN generation• …
ISC Spring 2007 Meetings
Retail Information Services
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Summary
RFID Source Tagging has a number of benefits for vendors• Improved supply chain visibility• Cost reduction• In order to implement RFID Source Tagging, vendors
need to consider …• Factories’ data management capabilities• Logistic process restrictions Pre-printed tags vs. in-house programming overseas
Start analyzing your processes and involve suppliers soon!
ISC Spring 2007 Meetings
Retail Information Services
Proprietary and Confidential
RFID Product Offering
RFID Ticket Express® (Pre-Printed/Pre-Programmed
RFID Labels)
“We can do it for you …” “We can enable you to do it yourself …”
RFID Starter Kit(RFID Printer + Blank RFID Labels)(1)
(1) Plus external reader (optional), software and installation support
Two easy RFID solutions from Avery Dennison RIS