RFIDWorld.ca is predicting the extinction of the bar code and the end of waits in grocery cues because of new less expensive RFID tags.
A component of their aggressive prediction is the announcement of the adoption of tag equipped apparel (jeans mostly) by the world’s largest retailer. After all whatever those big fellas want….
Another piece of the puzzle is a new technology born through a joint effort of the Suncheon National University and Rice University that can be directly printed onto a paper or plastic tags made of ink laced with carbon nanotubes.
Regardless of the promise of this new RFID development, I am a good deal more excited about the Advantage “Tunnel” Checkout introduced last week in a Hebron, Kentucky Kroger store. The objective of this multi-scanner, scale and image verification technology is to eliminate both the shortcomings in current self checkout systems caused by the potential of theft, but also the bottleneck caused by most current self checkout systems.
The Advantage Checkout offers significant plusses in terms of adaptability and control. For retailers and consumers to benefit only the retailer need commit. In the case of RFID tags, one of the biggest hurdles has always been that if not all suppliers tag their products, the RFID checkout promise will remain just that.
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For a number of years the industry has been trying to deal with the challenge of that “first moment of truth”, the collision between buyer, brand and banner. We have had all manner of developments and innovations trying to triangulate on that moment in order to make the result of that encounter more predictably successful. In the end we have improved supply chain elements but had very little impact on the actual shelf conditions encountered by the consumer.
Over the last 20 months ShelfSnap has compiled evidence that there is a lot of white space in the information we see on the supply - demand chain. That white space is on the shelf, where facings put on a products’ “Sunday Best” to try to convince that browser into a buyer. ShelfSnap has generated a unique view of that product facing in its natural habitat.
The new information that ShelfSnap provides has been missing since industry players started worrying about out of stocks and other deviations from the category, promotion and shopper marketing plans. This information provides a clear analysis of what Logistics Viewpoints describes as a void in shelf level collaboration. It is the only thing not effectively measured by inference engines, POS data, audits and, certainly, not by sign or tag printing programs, i.e., product facings.
The characteristics of those facings we measure include:
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Permanent or temporary
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Number
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Condition (in-stock . . . all of them?)
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Orientation (is the product putting its best face forward?)
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Shelf
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Adjacency
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Blocking
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Signage
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And perhaps, most importantly, comparison to the plan
Pretty much everything that retail and manufacturer planners want to do revolve around facings. They plan in order to
- Add facings.
- Rearrange facings.
- Move facings into the line of consumer site.
- Send consumers in search of them.
- Promote with facings.
- And, occasionally cull a particular product facing from the herd.
Which is the chicken and which the egg? Are the facings allocated based on “sales results” or are the “results” the effect of the facings?
Facings have three natural enemies which are:
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The Consumer - Consumers hate seeing holes on the shelf. Studies have found that they have “helped” by filling in holes with neighboring products. Or, taken product out of their basket and put it on the shelf.
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The Competitor - This one is predictable. There is a lot of incentive to slide your tag down a slot. Or, to exchange their position for yours. Savvy competitors know that facings create sales and that discrepancies from plan are very hard for the human eye-mind combination to sort out when the shelf looks full.
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The Caretaker - The caretaker can be the manufacturer’s employee or agent or it can be the aisle personnel. In these cases the practice of keeping the shelf neat, tight and full can result in a change in facings
All of the changes wrought by these “natural enemies” of the facing go unseen by the planner, and not clear from POS data. Rather than infer that something has gone awry at the shelf the natural conclusion about the majority of products is that the plan was faulty or that sales are simply sliding. As a result we can’t honestly determine what’s happening
What ShelfSnap provides is the only true measure of the facing and with it a clear picture of the factors impacting sales.
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Can Tight, But Is It Right?
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Surprising new information about the difficulties and effectiveness of continuity merchandising.
“Can tight” is a familiar term for grocery operators that indicates a shelf is fully ready for a consumer. Products are fronted, and as fully stocked as available inventory will provide. Shelves stocked “can tight” are assumed to be set correctly.This practice was identified as being responsible for hiding out-of-stocks, as holes were routinely “faced over”. It turns out that leaving those holes open might help slightly in combating those out of stocks. However, what is definitely true is that product that looses shelf space has a difficult time finding its way back. No amount of standing in front of the shelf divining what might be out of place, short faced, or void is very productive.Staring at a shelf set, thinking about the plan that is supposed to be in place and identifying and understanding the differences from that plan is a tough, tough assignment. Even with aids such as inference generated “alerts” and no-scan reports the process is frustratingly difficult. DSR technology frequently generates false positives or, even more frequently, fails to report real issues. Let’s look at a quick example:
This picture of a modular (viewed through the ShelfSnap application) is what continuity merchandisers face every day. Merchandisers typically visit 2-5 stores and review 2-15 categories in each store. Usually, they might have 1-2 tasks to accomplish (cut in an item, build a display) along with checking that the shelves are “can tight and right.”In this case the merchandiser’s eye would naturally be drawn to the out-of-stock in the second position on shelf 1 in the second segment. It might also be drawn to shelves 1 and 2 in segment three where products could use a good face up. But the rest of the set “is can tight and looks right”.In this case the continuity merchandiser had all most of the modern tools that could be brought to task including:
- Mobility Solution and PDA.
- DSR fed with POS sales (updated multiple times each hour), a perpetual inventory and “alerts” from a sophisticate inference engine.
- Shelf-tags with full item detail, in many cases with images of the product that should have been in the slot(s).
Even with these tools the task of separating the real issues from the false positives is impossible. The hurdle the merchandiser is facing is simple human physiology. According to Dr. Wolf, a Harvard Ophthalmology Professor and chair of the school’s Visual Attention Lab, there are confounding operations needed to complete this comparison which puts a tremendous strain on mere mortals. One of those hurdles, called the prevalence error, affects the merchandiser in two ways. First, the eye is drawn toward the obvious issues, the out-of-stock in this case and away from the rest of the shelf. Further, the brain “expects” to see a “can tight” shelf and once it sees that it has a hard time seeing beyond that fact into the content of the shelf. In other words the job as defined, given the tools above is impossible to do.So, how far from the planned Modular was this particular set, after the continuity merchandiser left the store? If we define compliance, as we ought to, in terms of the correct products, in the correct spots with the correct facings, than the average store in this study has been compromised by almost 60%!ShelfSnap carried the investigation a bit further comparing actual compliance in stores that received a normal amount of store servicing, against stores that received an extraordinary amount of additional continuity merchandising staffed by professionals engaged by the manufacturer who dominated the category. These resources were directed by a mobility solution driven by daily sales information. After a brief shake out period, where the continuity resources seemed to be having an impact (building off a very non-compliant base), compliance slipped and both level and trend of plan compromise became identical in both panels. In other works, incremental continuity merchandising by itself had absolutely no impact on plan compliance. When ShelfSnap added in SnapTask Directed Merchandising, picture based analysis about which products and positions need attention, the results turned positive very dramatically. How dramatic? Double digits - a 15% sales increase!
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