Digitalization of Retail
The digitalization of retail shows 4 key trends:
- Supply Chain Transparency (product tracking on item-base from picking after the production process to the cash register in the store via electronic packing list, stock accuracy over the whole supply chain, monitoring of internal and external service levels / KPIs, perfomance monitoring of all providers along the value chain, security against counterfeiting)
- Shop Floor Management (accuracy in delivery volume, structure and timing, out-of-shelf management, product tracking on the entire sales floor (incl. back store), identification of wrong placed products, measurement of in-store-replenishment performance, excelleration of the check-out-speed, mobile payment)
- Multi-Channel Synchronisation (flexibility between DCs and sales channels with one stock, store becomes a show-room function, product distribution to the strong selling sales areas on item level, secure of click&collect capability and higher customer satisfaction, product movements between different sales channels)
- Customer Experience (movement path of customers on the shop floor in analogy to the online business, measurement of the conversion rate in off-line business, intensity of exposure of products to the customer, transparency about the items taken into the fitting room and measurement of the conversion rate from the fitting room, communication to and with the customer after the sales process via the product, verification of product authenticity by the customer)
To realize the intended effects of the digitalization in retail, the companies have to establish monitoring and decision functions in their organizations. These functions have to generate the information out of the RFID-data (big data analysis / algorithms) to start the right operational decisions and actions (smart data) (e.g. assortment structures by channels, product placements, price decisions, process optimization, service level requirements, customer clustering)
- Project Approach
Direct observation of the value chain on the shop floor, first identification of weak points and non-value-adding processes, first estimations about cost and time savings as well as performance improvements, documentation of the status quo situation and areas of room for improvement.
Confirmation of these observations with hard facts, definition of the required data, data verification and analysis, estimation of the potential of improvement (e.g. by bench marks) and definition of the corresponding business cases.
- Concept development
Definition of the activity plan with the responsible person in charge, commitment to the measurable targets of each project, definition of milestones and critical path, consolidation of all projects to one implementation plan, ressource planning and feasibility study, implementation agreement with the top management.
Communication of the project plan internally and externally (e.g. to workers council, providers), put in place of the project responables, initiation of the project office for project coordination and monitoring, launching the change management process, coaching of the project managers and monitoring of the implementation of the project phases, quantification of the business cases, project review after approx. 1 year and verification of the planned project targets.
- Realized Projects from Andreas Stockert
- Charles Vögele AG, Switzerland: (Implementation of the RFID technology from the source (globally) to the cash register to 30 stores in Slovenia and 1 CDC and 2 RDCs, item-tagged RFID hangtags over the complete assortment (approx. 22,000 SKUs), approx 8,5 Mio items per saison, 100% picking accuracy from the production (electronic packing list), cross-docking from production to the shelf, product tracking over the entire value chain, managing the stock-out-management and the in-store-replenishment, analysis of consumer behavior on the shop floor and survey of the conversion rate of the fitting room, awarded in 2009 with the RFID-Journal Award in Orlando, Florida, USA for the best RFID-implementation worldwide).
- Enso Detego GmbH, Austria: (Chairman of the Advisory Board for 3 years, responsable for software development, sales and project management, development of KIP-driven dashboards using the generated RFID raw data from the read points, deduction of standard actions especially für store managers, logistics and supply chain responables)
- Marc O’Polo AG, Sweden / Germany: (item level RFID tagging over the entire supply chain from the production in Asia and Europe to the cash register in over 100 stores, stock monitoring and picking starting at production (electronic packing list), logistics, CDC and RDC as well as back- and front-store areas, avoiding of stock-out situation, integrated product protection).
- Marks & Spencer plc, UK: (securing the click & collect capability, permanent stock monitoring as well as recording the conversion rate on the shop floor with „hands-free“-technology in 3 department stores in London).
- Adidas AG, Germany: (RFID roll-out in approx. 1,000 Adidas-stores in Russa and one DC, additionally NFC-taging of one sports shoe model for tracking and direct communication with the customer after the sales process via the product for e.g. gaming, advertising, monitoring and other content components).