2009.33 | Item Level RFID

RFID has been touted as the future of retail for some time now. Item level tagging certainly seems a long way down the road, given the usual challenges of change including issues like RFID tag costs, altering the supply chain, and engineering changes to store operations.

American Apparel is making an attempt to leverage RFID in the store, and if it works, there are some interesting potential benefits given the right retail environment:

  • Simpler Inventory Management – Cycle counts are more automated and faster, providing more selling time and less administrative time for store staff.
  • Shrink Reduction – RFID could prove more effective than EAS technologies, given the potential to allow an exit gate alarm to go off only if an item has not been scanned. Instead of scan and de-activate, an item needs only be scanned. The gate could even identify the specific item that has passed through the gate to staff.
  • Better Service in Store – Always knowing the sizes and colours on the floor and in the back is key to customer satisfaction.
  • Potential Loyalty Program Benefits – Having RFID readers in the store could allow Loyalty card holders to be identified by staff and accorded special treatment.

There are certain to be other benefits not yet considered, so let’s hope that the business case comes together for the technology.

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2009.18 | Startpages | SelfScan | eDeals

Startpages – Want to get all the information you need to do your job and not clog your inbox or spend hours “surfing the interweb”? I encourage everyone I know to take the time to establish a personal start page. You can add RSS feeds of your favourite trade publications, magazines, newspapers, blogs, or even RSS feeds of Google News searches for any topic.

I’ve scooped people many times on important industry information or even news releases from their own company in this way by looking at my screen every morning for five minutes just like anyone else and no additional work. There are many platforms available, but I use Netvibes (it has mobile versions so I can see it anywhere) , but you can also use iGoogle, My Yahoo, and Pageflakes to name a few. I highly recommend it as a productivity gain and a great way to learn about what is going on in the retail industry, and with relevant organizations and solutions.

SelfScan – Being in self service, I sometimes hear questions about scanning your own items as you walk around with the store. Various organizations have tried this idea and variations on it. I haven’t seen it stick anywhere as of yet. Why not?

A recent article decried this solution as being the way of the future – interesting based on the fact that the technology has been around for years and hasn’t caught on with significant installations. From the customer perspective, it looks like a great idea – you’re walking around anyway – why not scan as you go? Here’s a few thoughts:

Inconvenience – how many times do you pick up things and put them back – more than you think – now add scanning and unscanning every time you do it. NOT ideal for most shoppers who are not patient with technology.

Security – How do you verify customers are taking what they scanned? Check them all at the end? How do you de-activate EAS security tags without an attendant or a station? What about people who dishonestly swap barcodes from one item to another?

Technical Issues – If there are issues on the floor, store staff now have to help people all over the floor instead of at the front end of the store.

Weighable Items – Do you trust customers to weigh items on their own? Most people are honest, but some could mis-identify what they weighed to get a cheaper price for what they buy. With no attendant, who would know? With a clerk to validate and check you out, what is the benefit?

Investment – Technology costs have dropped so this has improved, but wear and tear in retail is legendary – particularly in environments like grocery and DIY. Add the uncertain element of customers who will drop or break units, or even steal them, and costs will rise.

Network Security – Retailers are giving customers unencumbered unattended access to a wireless device that is connected to their network. You can encrypt it, but there is a way to break into everything. Nobody wants to be the next TJX.

Customer Time Savings – Many implementations allow you to go to registers at the end anyway. If you only get a few things, scanning time is pretty negligable. Scanning is a relatively small part of any transaction – it’s tendering that takes the time. Using this solution today, time and effort savings are low, and potential errors are high.

I think scan as you go is intriguing and will eventually get to a point where it is practicable, but there is a lot of work to be done on the operational validation. Retail transacations are a complex balance of browsing, selection, scanning, tendering, and security. With so many elements, there are a million ways to fall down, and no retailer wants to do that today.

UPDATE: According to a recent Washington Post article, these units are in use at Stop & Shop, Giant Food, Food Lion, Bloom. Who knew. I’m still against being audited as it goes against the whole time savings.

eDeals – Mobile coupons are growing. Coupon Sherpa, Yowza, and others are embracing the fact that consumers have a device in their pocket that is rapidly replacing their wallet. With the ongoing decline of paper based newspapers, digital natives and smartphone users becoming a greater portion of retailer wallet share, and the trackable nature of electronic media, expect this trend to continue.

I encourage grocery clients to move away from using paper flyers and towards electronic for the same reasons above. With fewer newspapers in business, expect printing costs to rise, and store flyers to become more expensive. Retailers could reduce their flyer print runs, or reduce the page count and encourage clients to move to the electronic version from the paper. Customer reaction to specials and items can be gauged by click-throughs, and retailers can drive a true interractive relationship with their customers.

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