Innovation that can transform supply chain management forever!

Visual Identification Technology (VIT).

What is it?

The basic idea is this: "cameras and supporting software can be used to identify products in the same way a bar code or RFID tag might be used today. VIT systems identify products based on their image characteristic, and/or potentially specific markings."

Application?

1. Manage "planogram compliance" in retail stores. The camera-equipment robot can move around retail shelves and capture what the correct planogram looks like, and then at whatever frequency the merchant wants the robot re-travels the aisles looking for variances from that plan that are then communicated to store managers or others for correction.

2. Improve speed and accuracy of conveyer systems in supply chain using "Imager" scanners. In high speed, in-line applications such as a conveyor system, proponents of imaging technology say read rates can be much higher than traditional laser scanners, reducing problems from no reads.

3. Alert store personnel about stock-outs on shelves in stores. Regular cameras already installed in stores can be connected to the software that allows for constant monitoring of inventory levels.

4. Track the level of effectiveness of customer service provided by employees. "There are already systems that can tell if a specific individual, for example, interacted with a store associate and then whether that same person went through a POS lane for a purchase."

http://www.scdigest.com/ontarget/13-04-09-2.php?cid=6918

Snippets of Retail Info

“The growth in large emerging markets such as China is projected to add at least 70 million new consumers to the global middle class per year, which is an additional 500 million new middle-class consumers by 2020," said Vicky Eng, global retail lead, Deloitte US. "This new wave of consumption represents a huge opportunity for consumer businesses.”

Google has been making defensive plays in Internet retail, looking to hold off its primary competition on the Web, Amazon.com Inc. (AMZN) and Facebook Inc. (FB). Google has been working with retailers that compete with Amazon by helping them reach consumers through its search engine and is expected to help retailers offer same-day delivery of goods to online shoppers this year.
(http://online.wsj.com/article/BT-CO-20130206-707929.html?mod=dist_smartbrief)

White paper posted in the Shop.org library by SCI Logistics:

Canada only has just over half the number of retail square feet of selling space per person than the US. In the US there are roughly 7.3 billion square feet of retail space for 313 million people for about 23 square feet per person. In Canada there are 500 million square feet of retail space for 34.5 million people meaning only 14 square feet of retail space per person. 

Current projections for total online internet sales in Canada show that they are on track to double by 2015. In fact, consumers in Canada are the heaviest internet users in world at 45 hours per month vs 39 hours per month in the United States. Add to this that Canadians spend an average of 47% more per internet order than US consumers and the case for e-commerce entry into Canada becomes extremely compelling.

The research firm, eMarketer, said North America remained the top region for ecommerce in 2012 with USD 364 billion in sales, up 13.9 per cent. But for 2013, the Asia-Pacific region is likely to be number one with 30 per cent growth, which would bring the market to USD 433 billion, eMarketer said.
 

Amazon’s five-year average return on investment, for example, is 17%, whereas traditional discount and department stores average 6.5%. 

Experts estimate that digital information already influences about 50% of store sales, and that number is growing rapidly.

the average American Customer Satisfaction Index score for online retailers such as Amazon (87 points) is 11 points higher than the average for physical discount and department stores.

Online sales account for less than 2% of revenue at Walmart and Target.

Why do we not have WiFi available in more retail locations?

We live in the information age where people can find an answer to almost any question by connecting to the Internet. Internet has, in a way, become a drug. As a society, we are addicted to the spoils of the Internet, be it in the field of entertainment, news, business, arts. We depend on the ability to go online to check email from our clients, friends and family; connect to a database with the information for work; search for a location of a place we need to visit; we watch television and our favorite shows online; we check the status of our flight online as well as book a hotel, buy a watch, order a book, etc., etc., etc.
We can perform an ever-growing array of activities online. Hence, we have become so accustomed to this reality that we now expect Internet to be available everywhere.
Some businesses like coffee shops and large fast food restaurant chains depend on this technology. Universities and shopping centers have Wi-Fi for free.
Since people use mobile apps when they shop, they want Wi-Fi to be available in grocery stores, drug and department stores, etc.
I expect it to be available in more places. For example, after returning from the trip to Kiev where cellular and Wi-Fi networks can be accessed in the subway - keep in mind that the subway in Kiev is buried deep in the ground beneath the city - I get thefeeling that we are being short changed here in Toronto with no such convenient services available in the TTC.
After reading the article "Overcoming the Challenges of Retail Wi-Fi" in Wall Street Journal this week, I have a clearer picture why Wi-Fi is not available 'everywhere', certainly not at every retail chain.
Here are some hurdles to making Wi-Fi ubiquitous:
 1. rolling out Wi-Fi to a network of stores is among the most capital intensive and complex projects IT departments will tackle this decade
2. Optimizing the bandwidth/speed and ensuring its compatibility with receiving devices
3.  Complexity involved in gauging real costs of installing: most in-house IT departments lack expertise here.
4. Real costs include but not limited to hardware and connectivity, managing different building and electrical codes, varying regional labor laws and the full impact of business disruption in stores
5. Putting Wi-Fi into a large commercial environment involves a series of complex design decisions


Some benefits for retailers: improve employee productivity and customer satisfaction


http://blogs.wsj.com/cio/2013/01/28/overcoming-the-challenges-of-retail-wi-fi/?mod=dist_smartbrief



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How Target creates differentiation

In today's cluttered and over-saturated marketplace it is increasing difficult for mainstream retailers to find a source of differentiation in their product offerings. For example, only a couple years ago it was challenging to immediately tell the difference between the merchandise carried at The Bay and Sears. Presently, The Bay has advanced far ahead its competitor in this regard, all thanks to the leadership of the charismatic Bonny Brooks. Now that Target is entering the market in about a month's time, the retailers will be summoned to the proverbial carpet of consumer scrutiny to explain why the consumer should by their product.
And it's not going to be easy to do. Not having entered the market yet, Target made some serious moves to ensure that its venture north of the border will not flop.
First, the past week was marked by the announcement that the iconic home turf brand Roots will be collaborating with Target on their affordable line of casual wear with the signature looks.
Second, Target established the Target Emerging Designer Award last year that is about to produce the first crop of talented winners. The award offers up-and-coming fashion designers the chance to win a $25,000 grant, a full page profile in ELLE Québec, and create an exclusive collection that will be sold at Target stores across Québec in 2014.

What a strong start for Target. That's the way to go!


http://www.newswire.ca/en/story/1105251/target-announces-finalists-of-the-target-emerging-designer-award

Terry Lundgren - the father of the year!

Terry Lundgren, CEO of Macy's, is one of my favorite leaders in retail. In the future, I will definately dedicate a separate blog post about him.

This week, he was awarded the "Father of the Year" Award by the National Father’s Day Committee. Remarkably, he shares this award with Bill Clinton.

“Mr. Lundgren is recognized for his role as an inspirational and dedicated father, as well as his outstanding philanthropic efforts and distinguished career. He embodies the passion, leadership and true devotion to both his family and career that is celebrated by this award", said Dan Orwig, chairman of the National Father’s Day Committee

What do you think it means to him? Is it the ultimate recognition?

http://www.bizjournals.com/cincinnati/blog/2013/01/and-the-father-of-the-year-award.html?ana=lnk

WalMart Way of Leading

In his autobiography, Sam Walton Made in America, Mr. Walton clearly described his attitude toward sharing his wealth. He said, "we have never been inclined to give any undeserving stranger a free ride".  Clearly, Mr. Walton was a man whose aim was to give with a purpose.
The Green Student Challenge initiative of WalMart Canada is an excellent example of this philosophy. It is a team business competition for Canadian post-secondary students. The goal of the competition is twofold: first, to create the most compelling breakthrough idea in sustainable business practices that can change the way companies run their business; second, to convince the panel of jury comprised of some of Canada's most successful business leaders of two things: the feasibility and the sustainable value of the idea. The monetary incentive for the wining team is $25, 000 as well as another $25,000 to the their school.
I believe that this initiative is the best investment a company can make. Hence, I was surprised to find out though quick internet research that no other major retailer in Canada has any similar initiatives in place. WalMart Canada is the true leader of the industry in terms of innovative ways of sharing wealth and giving back to the community. I encourage other companies like Loblaw and Canadian Tire to create their own business competitions of this kind. Here are a few examples of a slew of benefits for all the stakeholders of the Green Student Challenge:

• all participating students receive an invaluable experience of practicing innovative thinking and acquainting themselves with the ways businesses are managed
• they get a unique chance to network with Canada’s top CEO’s to increase their employability and possibly jump-start their careers
• the winning university receives funds to further expand resources that encourage students’ innovative thinking
• the students' ideas have a potential to make the planet a safer place to live for generations to come
• the businesses benefit from the students’ ideas in becoming more sustainable whilst improving their bottom line

WalMart way of leading really works. The best thing about it is that there are no loosers in this competition by design as every stakeholder wins regardless of the outcome of the competition.
What ideas can we, Retail Management students of TRSM, think of that could put us on the winning stage next year?
What can we do to cut down packaging waste? Can we eliminate paper receipts with a digital app for the smart phones to save trees, save on paper costs, and make shopping a friendlier experience? Is there a better way to power all the lights in the retail stores?
I encourage everyone of you to share your ideas here on this blog. Do you think we could come up with the winning idea for the 2013 competition?
Here is the link to the official registration page for all of you with brilliant minds: http://greenstudentchallenge.ca/

A little bit of pride for Lululemon

As you may know, last week /Jan 13-19/ was marked by the annual super bowl of the North American retail, the Big Show. As I was skimming through noteworthy articles from the show, I clicked on the article titled "A retail store trends trip around the world". It was about Wendy Liebmann's report on her global safari in search of innovation in retail store operations. Wendy Liebmann is a CEO, Founder and Chief Shopper of WSL Strategic Retail.
To my disappointment, I did not read anything new in the summary of her report. It mentioned a few well known trends, such as the fusion of high and low end retail. Collaboration between the Dover Street Market and Uniqlo was a supporting example of that trend. I remember reading an article in one of the major fashion magazines as far back as 3 years ago about the Dover Street Market. That article praised Rei Kawakubo's unique approach to running her store, merchandising being the vital part of that innovation.
What I took away from the summary of Wendy Liebmann's talk was the pride for Lululemon and the Canadian retail by association as it was mentioned as one of the most innovative retailers in the world, along side with Burbury, Dover Street Market, Uniqlo and Walgreen's. It’s not just a nice, clean or cool store shoppers want; they are looking for an experience.

Here's a short excerpt from the article:

"While Toronto’s Lululemon is a traditional brick-and-mortar, their stores are anything but traditional. It’s more than a fabulous fitness clothing store it’s a lifestyle store. lululemon is known for moving aside the clothing racks for yoga classes, building community with their shoppers"

The full article can be found at

http://blog.nrf.com/2013/01/16/retail-store-trends-trip-around-the-world/

How about we create our own deals!!!

This morning I want to share with you the blog post by Doug Stephens on the future of global retail. Doug's thoughts and ideas are, as always, super forward-thinking and innovative. In What If Retail Was Wrong, he talks about the future where the consumers are well-organized, group-conscious. They 'overthrow' the dictatorship of retailers and manufacturers by thinking up their own specific, measured and well-calculated deals and pitching them to the retailers and manufacturers. Group buying power organized with help of social networks is the enabler in this model. Consumer's desire to get the best deal is the driver.

It is without doubt that the traditional relationship between retailers and customers will change in the next 20 years. In the past, supply was the king. In the future, demand will take its place. We will not only be able to tell manufacturers what we want and at what price but also manufacture products in our homes, by-passing manufacturers altogether.

I'm excited about the future! Are you?


http://www.retailprophet.com/blog/social-media/what-if-retail-is-wrong/

New way to manage customer service experience: social CEM and video analytics

It the past, mystery shoppers and telephone surveys were the only means to discover opportunities for improving customer service experience. Presently, digital technologies open doors to new ways of evaluating CEM and discovering actionable insights into consumer shopping needs and wants. For example, a company can create a process to loop the client's brand/shopping experience data found on company's FB, Twitter, or other social media outlets with the corresponding department within the company that will act on this input to improve CE and turn unhappy customers into brand advocates. The challenge here is to link operations to marketing through "social CEM" and create a dialogue between all parties involved, i.e. company front and back office management, front-line employees and customers.
This is a short summary of an article found on HBR, titled Using Social Network to Improve Operations by Gary Edwards and Mike Amos.
One of the ideas that interested me in this article was that the retailers are not in full control of what's going on in their business on the store level. Historically, mystery shopper practice was designed to solve this issue. What was missing in the past is the technology to allow retailers to know exactly what happens on the sales floor. Such technology is already here, it is called video analytics.

This article talks about the multi-faceted capabilities of video analytics:
http://www.sdmmag.com/articles/87984-in-retail-elsewhere-analytics-ease-shrinkage-perk-up-profits

Trust our Private Lable, as others do!

Being a new kid on the block poses a number of challanges and is never easy. You have to prove yourself to the scrutinizing, distrustful sometimes cynical residents. They will challange you. In the world of retail, the inadvertent challenge is how to make them buy your stuff. You need to make it easy for them to make the leap of faith and abandon their former preferences and allegiance with well-know global brand names to spend their hard-earned cash on your offering.
One simple solution that Walmart has implemented to promote Great Value, which is its PL line of grocery products in India is an old sales trick to show that many people are buying this product. The store signage and packaging of this line of product emphasizes that the product is popular in other countries and cements this clam with the country fags and a slogan “Trusted by millions like you the world over”. Given that the price of Great Value is cheaper and the promise that quality is as good as in other products, there is no reason why a customer would not give Great Value a try.
It is not difficult to imagine that Walmart will try to push its PL in every product category all over the world. With juicy profit margins and the opportunity to capture customer loyalty, the customers may witness a marketing battle of the national brands and Walmart PL's. What is it going to take Walmart to win?

The original article can be found here:

http://blog.emap.com/Rob_Gregory/2012/10/31/building-private-label-trust-in-emerging-markets/

Emerging trend of merging functionalities. Video Analytics

Here are the key points from the article on the new approach to Video Analytics in retail in the face of technological improvements in this area:


Video is the largest unstructured data that any enterprise has to deal with.

define loss as an inability to sustain profit

real-time data

before: huge cost; have to store it and management couldn’t use it

video analytics can help optimize staffing; evaluate promotion and marketing performance; collect real-time shopper data; reduce fraud; deliver lower total cost of ownership

Analytics are generating insights that are not possible by any other means

video surveillance systems as retail support platform - cuts beh. loss prevention, operational effectiveness

Collaboration with store layout design and operational teams is creating sales floor environments that are more attractive to the customer, yield increased productivity and are more secure.
Information and insights on the customer have great potential to generate income from their suppliers and partners

Analytics as a marketing tool - which areas of the store have more traffic; which locations have an impact on overall sales; where to put displays, special offers

Keeping track of customer needs and keeping track of theft issues

CTIAI just completed a project involving 730 stores and almost 10,000 cameras with Couche-Tard, the largest convenience store chain in Canada.

Retail analytics’ multi-department value opens an opportunity for security integrators to justify the budget for a security system


“I would say that the main challenge is to bridge the gap existing between the security/loss prevention teams and the marketing/branding teams. Up until today, these were two separate business units with different needs, and old analog CCTV solutions did not enable using the same solutions. With the advance of IP CCTV and the introduction of affordable retail analytics, it became easier to use the same infrastructure to answer the requirements of these two separate divisions,” Reed explains.
Loss prevention is killer to a business

“In this economy a key goal for retailers in corporate meetings is ‘How do we get more out of the same things we have right now without spending more money or extending ourselves?’ The answer is through loss prevention

Integration of POS with video systems

famous business axiom says you cannot measure what you do not know

eConnect

Agilence

XProtect® Corporate and XProtect® Retail software from Milestone Systems.

Real time alerts are another benefit that retail analytics provide.


Video analytics in retail is changing from being used mostly for people counting application into additional areas which provide value to operations, marketing and security
Agent Vi - Site Map - a retail solution allows using the inputs from all surveillance cameras on the store floor to generate a map showing traffic patterns and hot spots. This data can also be linked directly to the video recording and provide insights into store operations, which are otherwise very difficult to achieve
queue management, which allows measuring average queue wait times and providing this information either in real time or offline

Analytics also allows retailers to customize in-store advertising via digital signage and analytics

Retailers are now able to use digital signage with an embedded camera and analytics. As you pass the digital sign, the analytic in the camera can quickly make basic demographic determinations. Are you a male or female? Are you under 18? Or over 55? It then relays the basic information to the digital sign advertising database that returns an ad that appeals to your demographic. This means men over 18 might get ads for razors, while older women might see an advertisement for arthritis medication. Some analytics are even smart enough to recognize whether you are looking at the ad, and if not, raising the volume or creating some visual effect to grab your attention,” says Derek Rodner, vice president, Product Strategy, Agilence

For any technology to have mass appeal, it must reach a level of “off-the-shelf” simplicity

there are “levels” of off-the-shelf

Integrators


 The original article can be found at
http://www.sdmmag.com/articles/print/87984-in-retail-elsewhere-analytics-ease-shrinkage-perk-up-profits?goback=.gde_3701959_member_196908512

——————— Department Stores ———————————

To thrive, department stores need to be much more than simply a space to buy stuff

They need to tap customers at a deeper level – the level of ideas and dreams.

Department stores need to offer other things besides products, things with immaterial value.

Customers should come to department stores with a desire to discover, and then from there, to have focused talking points with the retailer.

What explains the radical shift from a sector in crisis – a bold new approach that draws directly on the early roots of shopping.

The department store, for better or for worse, was a place where capitalism and identity intersected: It offered a sense of place, a connection to other shoppers and tapped into larger ideals of freedom and free time.

The department store was an embodiment of “the good life” as a church was of the “good self.”

By 1912, Galeries Lafayette not only launched a store with five floors of merchandise but an urban landmark with a neo-Byzantine glass dome with 10 painted windows. A cathedral of business, indeed. Today, the store draws more visitors than the Eiffel Tower and the Louvre. Printemps, another stunning French heavyweight, estimates that it has 22 million visitors annually.