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- Pages: 11
Application of RFID in Retail
Bangkok, May 11th 2006
Alan McNab, [email protected]
1
Bar Code Value Worked Backwards into the Supply Chain
Advanced Data Capture
4
Symbol’s Focus on Supply Chain Technologies - Yesterday
Mobile Kiosk MK1100
Rugged Mobile Computer MC9000G Forlklift Mounted Computer VRC8900
W-LAN Infrastructure WS 5000
Rugged Mobile Computer w/ WAN MC9000S
Rugged Mobile Computer MC9000K
of Flow
Mobile Computer PDT6100
Industrial Handheld Scanner LS3408 ER
Rugged Mobile Computer MC9000G
W-LAN Infrastructure WS 2000
W-LAN Infrastructure WS5000
s G ood
Mobile Computer PDT6100
Signature Capture Terminals PD8500 Point of Sale Scanners LS2208
W-LAN Infrastructure WS2000
Checkout Shelves
Store
Distribution Center
Transportation
Supplier Plant
Flow of Inform
ation
2
5
Symbol’s Focus on Supply Chain Technologies - Today Rugged Mobile Computer w/ RFID MC 9000 RFID RFID AR 400 + RFID Tags Enterprise Digital Assistant MC 50 Rugged Mobile Computer MC9000G Forlklift Mounted Computer VRC8900
W-LAN Infrastructure WS 5000
Enterprise Digital Assistant MC 50
Rugged Mobile Computer w/ RFID MC 9000 RFID
RFID DC 400
Rugged Mobile Computer w/ WAN MC9000S
Rugged Mobile Computer MC9000K
Flow
Industrial Handheld Scanner LS3408 ER
RFID AR 400 Enterprise Digital Assistant MC 50
Mobile Computer PDT6100 Rugged Mobile Computer MC9000G
W-LAN Infrastructure WS 2000
W-LAN Infrastructure WS5000
ods of G o
Shelf
EAS Signature Capture Terminals PD8500
Mobile Kiosk MK1100 Mobile Computer PDT6100
Point of Sale Scanners LS2208
W-LAN Infrastructure WS2000
Checkout Shelves
Store
MSP
Distribution Center
Transportation
Supplier Plant
Flow of Inform
ation
RFID Solutions for Retailers Operational Benefits
Business Benefits
• Reduces labor “touches” • Real-time visibility of inventory • Increases material handling speeds • Accelerates decisions at point of activity • Improved error correction at the edge
• Increased sales through improved in stock positions • Enhance Customer Experience & responsiveness • Increased accuracy & visibility • Real-time decision making
3
Early RFID Forecasts
Phase III: Item Level
Phase II: Case Level
Phase I: Pallet Level •Shipping & Receiving •Tracking and tracing •Inventory mgmt •Asset management
•Quality Control •Distribution Productivity •Tracking and Tracing •Inventory management •Asset management •Shelf maintenance •High value goods
•Customer insight •Shelf availability •Self checkout •Returns •Maintenance
US Retail RFID Spending (IDC) 2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
What we are seeing today…
Phase III: Item Level ROI – Closed Loop Applications Phase II: Case Level ROI
Phase I: Pallet Level ROI US Retail RFID Spending (IDC) 2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
4
RFID Today: Retail Supply Chain Visibility ISSUE
Retailer DC
• $69B in lost revenue* due to out of stocks • Poor inventory velocity from DCÆStoreÆShelf SOLUTION
Suppliers
• Supplier Compliance: Tagging all cases & pallets • RFID to automate visibility & tracking onto shelf RESULTS Retailer Store
• Increased inventory velocity from DCÆStoreÆShelf • Real-time visibility • Inventory reduction • Better supply-demand alignment
*Retail Out of Stocks: A Worldwide Examiniation of Extent, Causes and Consumer Response, Emory Univ, Univ. of St Gallen, and Unvi. Of Colorado, 2002
One Market Force Annual Revenues = $315.6B Net Income = $ 11.2B Profit Margin 3.5%
5
Wal-Mart ROI Study
May 5th, 2006
29-week study analyzed out-of-stock merchandise at 12 pilot stores equipped with RFID technology and 12 control stores without the technology Business Objective: Drive improved product availability for its customers
30%
Results of the 16% reduction in product out-of-stocks Impact of RFID: Manual orders placed by stores were reduced by approximately 10% Results of EPC Reduction in out-of-stocks on EPC tagged tagged vs. items at a rate three times faster than that of non-tagged: the non-tagged items within the same store
Cold Chain Applications
• Date • Location • Temperature • Authentication
6
Number 1 Issue for Retailers Out of Stock is the #1 Concern: • On average 7.1%* of SKU’s are out • Some categories of SKU’s up to 30% • Most stock is available but not on shelf Why? • Can’t find it • No tools • No time • Not their problem
*Source: Efficient Consumer Response (ECR) Europe
Early Adopters in Item Level Tracking
Yodobashi
7
Item Level Tagging Best Target Markets Apparel – significant variety management challenge to maintain stock, some categories of sufficient price CD/DVD – many titles, significant organizational challenge in maintaining stock and display Shoes – significant variety, especially helpful in self-service shoe departments Some factors that make in-store retail attractive:
• • • • • •
Many sizes and varieties Hard for customers to find High shrink/high loss Time sensitive – needs to sell quickly Goods heavily handled by consumers High price points
The Basic Application
•
Tags are applied to selected categories of merchandise within a designated group of stores
•
RFID devices are used to conduct rapid, accurate, and frequent product cycle counts, leading to significantly more accurate, near real-time information, which can be used to:
1. Increase sales through improved in-stock position 2. Relocate mis-placed goods (misplaced goods are effectively out of stock)
3. Rapidly locate items sought by customers on the retail floor or in the backroom, (e.g. size, color)
4. Identify shrink quickly (reduce loss) 5. Reduce manual inventory costs (reduced labor) 6. Replace EAS systems (in the future)
8
The Ideal Scenario
• RFID tags are attached to all items in one or more categories
• The updated on-hand detail is used to drive immediate replenishment
• A handheld RFID reader • Symbol has demonstrated an is used to quickly take daily cycle counts
effective 97% read on cloth based goods stacked on a typical retail shelf
Will In-Store RFID Work For Me? 1. 2. 3. 4. 5. 6. 7. 8.
Is replenishment a problem for me today? Do my goods turn quickly enough that stockouts are an issue? Do I stock many varieties of a good (colors, sizes, titles) that make in-store availability particularly challenging? Is brand substitution likely? Is the unit value of my goods high enough to justify a tag cost? Are the goods which I am selling RFID friendly? Yes means that they can be read easily (and at lower cost) Is it easy for me to control how these goods are tagged? Do I have them made for me or do I tag goods myself in the DC or store? Does a lost sale have a multiplicative effect on revenue loss for me? (I can’t buy the bra so I don’t buy the matching underwear)
KEEP IN MIND: These are questions you ask about categories of goods individually, not the whole store or the mix
9
What Affects These Costs?
Tag Commissioning
• Commissioning = Attaching a tag to an item and
associating it with information critical to restocking – SKU, size, color – dependent on product category
• Commissioning is easiest and cheapest when done at the point of manufacture – products over which you have a lot of control (closed loop) are a good place to start
• Commissioning can also occur at the DC,
at a specialty tagging operation, or in the store, albeit typically at a higher cost
Store of the Future Inventory Readers
Price Check Readers
Integrated Security
Employee Access
Dressing Room Readers
Shelf Readers
Shipping & Receiving
Mobile Readers
10
Thank You
Questions?
?
11
Bangkok, May 11th 2006
Alan McNab, [email protected]
1
Bar Code Value Worked Backwards into the Supply Chain
Advanced Data Capture
4
Symbol’s Focus on Supply Chain Technologies - Yesterday
Mobile Kiosk MK1100
Rugged Mobile Computer MC9000G Forlklift Mounted Computer VRC8900
W-LAN Infrastructure WS 5000
Rugged Mobile Computer w/ WAN MC9000S
Rugged Mobile Computer MC9000K
of Flow
Mobile Computer PDT6100
Industrial Handheld Scanner LS3408 ER
Rugged Mobile Computer MC9000G
W-LAN Infrastructure WS 2000
W-LAN Infrastructure WS5000
s G ood
Mobile Computer PDT6100
Signature Capture Terminals PD8500 Point of Sale Scanners LS2208
W-LAN Infrastructure WS2000
Checkout Shelves
Store
Distribution Center
Transportation
Supplier Plant
Flow of Inform
ation
2
5
Symbol’s Focus on Supply Chain Technologies - Today Rugged Mobile Computer w/ RFID MC 9000 RFID RFID AR 400 + RFID Tags Enterprise Digital Assistant MC 50 Rugged Mobile Computer MC9000G Forlklift Mounted Computer VRC8900
W-LAN Infrastructure WS 5000
Enterprise Digital Assistant MC 50
Rugged Mobile Computer w/ RFID MC 9000 RFID
RFID DC 400
Rugged Mobile Computer w/ WAN MC9000S
Rugged Mobile Computer MC9000K
Flow
Industrial Handheld Scanner LS3408 ER
RFID AR 400 Enterprise Digital Assistant MC 50
Mobile Computer PDT6100 Rugged Mobile Computer MC9000G
W-LAN Infrastructure WS 2000
W-LAN Infrastructure WS5000
ods of G o
Shelf
EAS Signature Capture Terminals PD8500
Mobile Kiosk MK1100 Mobile Computer PDT6100
Point of Sale Scanners LS2208
W-LAN Infrastructure WS2000
Checkout Shelves
Store
MSP
Distribution Center
Transportation
Supplier Plant
Flow of Inform
ation
RFID Solutions for Retailers Operational Benefits
Business Benefits
• Reduces labor “touches” • Real-time visibility of inventory • Increases material handling speeds • Accelerates decisions at point of activity • Improved error correction at the edge
• Increased sales through improved in stock positions • Enhance Customer Experience & responsiveness • Increased accuracy & visibility • Real-time decision making
3
Early RFID Forecasts
Phase III: Item Level
Phase II: Case Level
Phase I: Pallet Level •Shipping & Receiving •Tracking and tracing •Inventory mgmt •Asset management
•Quality Control •Distribution Productivity •Tracking and Tracing •Inventory management •Asset management •Shelf maintenance •High value goods
•Customer insight •Shelf availability •Self checkout •Returns •Maintenance
US Retail RFID Spending (IDC) 2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
What we are seeing today…
Phase III: Item Level ROI – Closed Loop Applications Phase II: Case Level ROI
Phase I: Pallet Level ROI US Retail RFID Spending (IDC) 2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
4
RFID Today: Retail Supply Chain Visibility ISSUE
Retailer DC
• $69B in lost revenue* due to out of stocks • Poor inventory velocity from DCÆStoreÆShelf SOLUTION
Suppliers
• Supplier Compliance: Tagging all cases & pallets • RFID to automate visibility & tracking onto shelf RESULTS Retailer Store
• Increased inventory velocity from DCÆStoreÆShelf • Real-time visibility • Inventory reduction • Better supply-demand alignment
*Retail Out of Stocks: A Worldwide Examiniation of Extent, Causes and Consumer Response, Emory Univ, Univ. of St Gallen, and Unvi. Of Colorado, 2002
One Market Force Annual Revenues = $315.6B Net Income = $ 11.2B Profit Margin 3.5%
5
Wal-Mart ROI Study
May 5th, 2006
29-week study analyzed out-of-stock merchandise at 12 pilot stores equipped with RFID technology and 12 control stores without the technology Business Objective: Drive improved product availability for its customers
30%
Results of the 16% reduction in product out-of-stocks Impact of RFID: Manual orders placed by stores were reduced by approximately 10% Results of EPC Reduction in out-of-stocks on EPC tagged tagged vs. items at a rate three times faster than that of non-tagged: the non-tagged items within the same store
Cold Chain Applications
• Date • Location • Temperature • Authentication
6
Number 1 Issue for Retailers Out of Stock is the #1 Concern: • On average 7.1%* of SKU’s are out • Some categories of SKU’s up to 30% • Most stock is available but not on shelf Why? • Can’t find it • No tools • No time • Not their problem
*Source: Efficient Consumer Response (ECR) Europe
Early Adopters in Item Level Tracking
Yodobashi
7
Item Level Tagging Best Target Markets Apparel – significant variety management challenge to maintain stock, some categories of sufficient price CD/DVD – many titles, significant organizational challenge in maintaining stock and display Shoes – significant variety, especially helpful in self-service shoe departments Some factors that make in-store retail attractive:
• • • • • •
Many sizes and varieties Hard for customers to find High shrink/high loss Time sensitive – needs to sell quickly Goods heavily handled by consumers High price points
The Basic Application
•
Tags are applied to selected categories of merchandise within a designated group of stores
•
RFID devices are used to conduct rapid, accurate, and frequent product cycle counts, leading to significantly more accurate, near real-time information, which can be used to:
1. Increase sales through improved in-stock position 2. Relocate mis-placed goods (misplaced goods are effectively out of stock)
3. Rapidly locate items sought by customers on the retail floor or in the backroom, (e.g. size, color)
4. Identify shrink quickly (reduce loss) 5. Reduce manual inventory costs (reduced labor) 6. Replace EAS systems (in the future)
8
The Ideal Scenario
• RFID tags are attached to all items in one or more categories
• The updated on-hand detail is used to drive immediate replenishment
• A handheld RFID reader • Symbol has demonstrated an is used to quickly take daily cycle counts
effective 97% read on cloth based goods stacked on a typical retail shelf
Will In-Store RFID Work For Me? 1. 2. 3. 4. 5. 6. 7. 8.
Is replenishment a problem for me today? Do my goods turn quickly enough that stockouts are an issue? Do I stock many varieties of a good (colors, sizes, titles) that make in-store availability particularly challenging? Is brand substitution likely? Is the unit value of my goods high enough to justify a tag cost? Are the goods which I am selling RFID friendly? Yes means that they can be read easily (and at lower cost) Is it easy for me to control how these goods are tagged? Do I have them made for me or do I tag goods myself in the DC or store? Does a lost sale have a multiplicative effect on revenue loss for me? (I can’t buy the bra so I don’t buy the matching underwear)
KEEP IN MIND: These are questions you ask about categories of goods individually, not the whole store or the mix
9
What Affects These Costs?
Tag Commissioning
• Commissioning = Attaching a tag to an item and
associating it with information critical to restocking – SKU, size, color – dependent on product category
• Commissioning is easiest and cheapest when done at the point of manufacture – products over which you have a lot of control (closed loop) are a good place to start
• Commissioning can also occur at the DC,
at a specialty tagging operation, or in the store, albeit typically at a higher cost
Store of the Future Inventory Readers
Price Check Readers
Integrated Security
Employee Access
Dressing Room Readers
Shelf Readers
Shipping & Receiving
Mobile Readers
10
Thank You
Questions?
?
11
