Accuracy and Visibility in an Omni-Channel Retail World: Moving Beyond the Barcode to EPC-Enabled RFID
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1 Accuracy and Visibility in an Omni-Channel Retail World: Moving Beyond the Barcode to EPC-Enabled RFID October 16, 2014
2 TODAY S TOPICS GS1 US Overview Industry Trends and Imperatives Educating the Industry 2
3 GS1 US Overview 3
4 GS1 Standards are the global language of business a language for identifying, capturing, and sharing information automatically and accurately, so that anyone who wants that information can understand it, no matter who or where they are. 4
5 THE GLOBAL LANGUAGE OF BUSINESS GS1 Standards Identify Capture Share GS1 Identification Numbers Companies, Products, Locations, Logistics, Assets, and Services GS1 Data Carriers Barcodes and EPC-enabled RFID GS1 Data Exchange Master Data, Transactional Data, and Physical Event Data 5
6 OUR VALUE TO INDUSTRIES AND COMPANIES 6
7 SOLVING INDUSTRY NEEDS Industry Problem / Opportunity Requirements Solutions Adoption & Usage GS1 helps industry identify a problem or opportunity and organize to solve it GS1 helps industry define their needs /goals and create adoption plans GS1 develops: Standards Guidelines Tools Readiness Programs Education & Training GS1 measures how industry adopts and uses standardized technology 7
8 Industry Trends and Imperatives 8
9 INDUSTRY IMPERATIVES Network- Wide Inventory Visibility & Accuracy The ability to see the last item within the enterprise and consumer-direct supplier partners Delivering on the promise to the consumer Web- Ready Products & Smarter Analytics Improving speed to web for both product attributes and images Meeting consumer demand for rich product information Optimized Fulfillment Strategies Ensuring that processes, infrastructure and systems are streamlined and integrated to meet desired service levels and delivery commitments 9
10 ORGANIZATIONAL PRIORITIES What is the focus for industry? EXTERNAL INTERNAL INFRASTRUCTURE Channel Management Cost to Serve Demand Fulfillment Shareholder Value PARTNER NETWORK Supply Chain Efficiency & Effectiveness Logistics Management Supplier Lifecycle Management Procure to Pay CONSUMER Empowered Customer & Seamless Engagement Experience Delivery & Operational Excellence 10
11 VISIBILITY FROM SOURCE-TO CONSUMER GARMENT MANUFACTURER TRANSPORTATION & LOGISTICS DISTRIBUTION RETAIL STORE 11
12 USE CASES AND TECHNOLOGY Use cases receiving top billing Retailer (Primary) Inventory accuracy In-Store out of stock (replenishment execution) Loss detection Locating product (e.g., display compliance) Retailer (Secondary) Loss Prevention (beyond loss detection), Cycle counting strategies, Point of sale, Fixed vs handheld: incremental valuation, Enhance the customer experience Brands Receiving accuracy Pick pack accuracy Shipping accuracy Use cases courtesy of The RFID Lab at Auburn University and The University of Arkansas 12
13 EPC LABELS ARE BEING PLACED ON Apparel and Accessories (Replenishment and Fashion ) Consumer Electronics (small and large) Footwear Household (Furniture, Kitchen and Cooking, Bedding, Linens, Small kitchen appliances and accessories) Jewelry Returnable Assets (Totes, Carts, etc) IDTechEx Research reports the North American market for UHF labels: RFID marker has grown 17% in one year to $9.2B in Billion labels in 2013 and expected to reach 3.9 billion tags in 2014 VDC predicts between Billion labels (UHF and HF) worldwide by
14 Educating the Industry 14
15 RETAILER START GUIDE 1. Research, Investigate and Learn Understand the basics of the technology and the requirements to implement successfully Identify business cases that likely fit you 2. Define system scope and objectives for your initiative Hardware and software requirements and cost Training and education of personnel Finance Marketing 15
16 RETAILER START GUIDE 3. Establish an internal team Merchants Store IT LP Finance Marketing 4. Develop an education strategy for key executives Leverage GS1 US and the retailers who have preceded you GS1 US Item Level Readiness Program can provide varying levels of education, tools and resources 16
17 RETAILER START GUIDE 5. Determine business priority that you can be successful in early Internally controlled: assure display stock on floor avoiding lost sales (Shoe locator) Verify in stock position on floor/right location to reduce lost sales (start with basics?) Omni channel readiness to be competitive service Minimize internal shrink Enhance Reverse Logistics cost reduction 6. Define system scope objectives for your initiative Fashion basics inventory accuracy Fashion apparel and fashion shoes Shoe, luggage, accessories display audit Reports to monitor the process.get samples from other retailers, GS1 17
18 RETAILER START GUIDE 7. Develop pilot detail Task Involved Roles Information Timing Assign internal team Approve plan/timeline Approve suppliers Set Detail Plan Develop partner expectations compliance agreements Technology process change plan Prep for pilots (tags; tag up) Launch 1 store pilot Multi store pilot Rollout Full category rollout Omni Channel Ready 18
19 SUPPLIER START GUIDE 1. Review the business case Evaluate from supplier and customer perspectives Business Value How Inventory Accuracy Cycle count physical inventory - frequency, tie-in to financials (OTB) Increased Sales Reduce stock outs Lowering cost of inventory Faster turns/lowered end of season payout Improve customer experience & sales Improve stockroom-to-selling floor replenishment Labor reallocation Reduce in-store labor for cycle counts Electronic surveillance Reduce shrink (shortage) Omni-channel Locate product 19
20 SUPPLIER START GUIDE 2. Define Scope of Implementation Category - Product Type, Replenishment/Fashion Brand Survey other customer shipments Product Ship Points - Existing or new RFID-equipped facility, define equipment needs Customer Readiness helps understand requirements, planning, lead times, etc. Playing: Does the technology work? Investigating: What is the business case? Road Mapping: Defined deployment strategy Phased Deployment: Category, Department Full Deployment: Everything 20
21 SUPPLIER START GUIDE 3. Build Project Team Internal Sales Logistics Operations DC IT External RETAILER: Sales, Logistics, Operations, DC, IT 3 rd PARTY SOLUTION PROVIDERS Equipment, Media, IT 21
22 SUPPLIER START GUIDE 4. Implementation Getting your product tagged Ticket / Tag Approval by Customer Identify your retailer Source Tagging at Factory What product delivery can be impacted for source tagging? DC Transition Tagging What product delivery will need to be transition stickered by Supplier DC(s)? What inventory is currently in Supplier DC(s) that will need transition stickering? Customer Tag-up Will customer be executing in-store tag up for current inventory? What is the timing? Requirements Ticket Supplier, Media, Inlay, Serialization Non-Compliance Exemption from Chargebacks Tag Cost 22
23 SUPPLIER START GUIDE 5. Evaluating Tagged Item Performance Performance Metrics Baseline metrics pre-rfid, evaluation post-rfid implementation What does success look like? How & frequency of measurements? 23
24 EPC ADOPTION ROADMAP Nine interactive steps Each icon links to live, web-based content Best practices Case studies Checklists Guidelines Presentations ROI calculators Whitepapers 24
25 ON-DEMAND WEBINAR SNIPPETS Supplement Adoption Roadmap Just-in-time learning 15 topics RFID History What Business Problem Does RFID Solve? What Business Problem are YOU Solving? Moving Beyond Compliance Key Things to Know to Get Started Consumer Privacy and the Use of the EPC Symbol Overview of the EPC Adoption Roadmap and Tools Technology Components of an RFID System: Tags Technology Components of an RFID System: Tag Performance and Readers Technology Components of an RFID System: Software Overview of GS1 Standards (Identify, Capture and Share) Serialization Basics and EPC Serial Number Assignment and Management Moving from U.P.C. to EPC An Implementation Checklist 25
26 INDUSTRY CALL TO ACTION On May 13 th, GS1 US distributed an RFID industry outreach letter to the trading partners of Bon-Ton, Hudson s Bay, Kohl s, Lord & Taylor, Macy s, and Saks Fifth Avenue. Here are three key reasons we encourage you to get involved now: Omni-channel retail is here to stay. RFID is foundational to delivering a successful omnichannel strategy to delight your customers - in every product category. RFID has moved beyond inventory replenishment. It is an essential component to enable the supply chain visibility and inventory accuracy needed to know what s available, where it s located and how to best deliver it helping deliver on the omni-channel customer promise. A growing number of retailers already have programs in place and are rolling-out RFID, and are realizing important benefits for their customers. That is why it is important to begin developing your plans to implement now. Retailers are ready. Technology providers are able. Education and resources are available. Supplier benefits are documented. The time to get involved is now. 26
27 INDUSTRY SUPPORT On October 2, GS1 US started to distribute an RFID brief titled Commonly Asked RFID Questions: Dispelling the Myths. The Retail Sector began strategically deploying item level Radio Frequency Identification (RFID) in late Since that time there have been misunderstandings about the technology, its use case feasibility and its ROI benefits. This brief sets the record straight on RFID - providing definitive answers to the industry s most common questions about what RFID is and what it can do. 27
28 28
29 CONTACT INFORMATION Melanie F. Nuce Vice President, Industry Engagement Apparel and General Merchandise GS1 US TEL EM AIL W EB Connect with the GS1 US community on 29
30 Appendix 30
31 GS1 STANDARDS IN ACTION 31
32 FOCUS AREAS AND KEY INDUSTRIES FOCUS AREAS B2B2C Data Quality and Data Management Inventory Efficiency Product and Location Identification Traceability and Safety KEY INDUSTRIES Apparel and General Merchandise Foodservice Fresh Foods Healthcare Retail Grocery 32
33 APPAREL AND GENERAL MERCHANDISE INITIATIVE Allowing trading partners to follow their products from source to consumer ensuring that the right item is in the right place at the right time as it moves through the supply chain and across retail channels KEY INDUSTRY OBJECTIVES Improve inventory accuracy Enhance shipping accuracy and confidence Facilitate the distribution of accurate, standardized product data Build better trading partner and customer relationships Enable the successful implementation of EPCenabled RFID technology Increase speed-to-market 33
34 APPAREL AND GENERAL MERCHANDISE 34
35 INITIATIVE STRUCTURE Executive Leadership Committee Industry Sponsors Group Technical Advisory Committee Omni-Channel Ready Merchandise Item Level RFID Product Images & Data Attributes Point of Sale Data Sharing (forming) E-Commerce Fulfillment Hangers Sub-Committee Implementation Executive Level Peer-to-Peer Outreach Hardlines Sporting Goods Apparel & Footwear Accessories EPC Item Level Readiness Program User Group Tagged Item Performance Prototype Project 35
36 THE LEADING CATAGORIES FOR DEPLOYMENT Children s Footwear (hanging sandals, boxed slippers, men's & women's shoes ) Handbags Home (Cookware, Cutlery, Kitchen Electrics, Personal Care), Jewelry (Accessories, Fashion, Fine, Watches) Leather Goods Luggage Men s - (Activewear, Belts, Denim, Dress Shirts, Gifts/Jewelry, Innerwear, Neckwear, Slacks/Bottoms, Sleepwear/Robes, Socks, Suits/Sport coats, Underwear, Designer Sportwear, Leather goods) Sunglasses Textiles - Pillows & Pads, Sheets, Table Linens Women s Activewear, Belts, Denim, Dresses, Hosiery/ Leggings/ Tights, Neckwear, Shoes, Socks, Sportwear, Suits 36
37 CATEGORY FOCUS DISCUSSION Currently Deployed Product Category Accessories Footwear (e.g. hanging sandals, boxed slippers) Bedding Cutlery Denim Denim (All FOB's) Handbags Hosiery/Leggings/Tights Innerwear Jewelry (Fashion ONLY) Luggage Men s Belts Men s Dress Shirts Men s Slacks/Bottoms Men s Sleepwear and Robes Product Category Men s Suit Separates/Suits/ Men s Underwear Men's Collections/Impulse/Designer/ Men's Shoes Men's Small Leather Goods Pillows & Pads Socks Sportcoats Sportswear Textiles (Home) Women s Shoes (Display and Box) Women s Spec. Sizes/Sportswear Women's & Men's Belts Women's Small Leather Goods Women's Suits 2014 Focus Product Category Sunglasses Men s Gifts & Jewelry Kitchen Electrics Personal Care Cookware Table Linens Children s Men s Neckwear Housewares Fine Jewelry 37
38 SUPPLIER MERCHANDISE MARKING PROJECT PLAN PHASE CATEGORY TASK / ACTIVITY Getting Started Volume Projections Process Flow Development & Approvals Create Project Plan Provide to Ticket Supplier Definition Integrated Ticket Define for customer and brand Confirm use of generic/current ticket format Communicate/coordinate activities with Supplier Overseas teams Initial unit volume by delivery and brand Initial unit volume by production countries of origin Rolling 4-month volume projections by country/by ticket type Define process for ticket orders Define process to develop new RFID ticket formats Define process for new ticket format development & testing Define process for tracking Service Bureau order production Define functional flow for transition tagging Define process for handling customer product returns Create integrated ticket format Review & approve ticket proof Obtain customer approval of ticket format Transition Sticker Review & approve Service Bureau's 1st production samples of integrated ticket Create transition ticket format Review & approve ticket proof Obtain customer approval of ticket format Review & approve Ticket Suppliers 1st production samples of transition sticker Product Ticketing Carton Label Source Tagging Transition Tagging Create wrap-around label formats to include RFID indicator Review & approve carton label proof Discuss product deliveries and transition schedule Prepare rollout strategy for Service Bureaus Review & approve ticket samples from Service Bureau's 1st production run Provide projections of inventory volume to convert in Supplier DC Identify inventory to be transition tagged Order transition sticker stock for Supplier DC Provide training to DC personnel Review & approve transition sticker samples from Supplier DC(s) 1st production run 38
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