I returned to Boston earlier today after spending an interesting two days at the 2017 GS1 Connect conference in Las Vegas, Nevada. I had the opportunity to present a session titled “How Retailers are Using Inventory Accuracy to Streamline Operations” with a representative from Target (Kevin O’Dare, Lead Business Partner). Here we talked about the importance of in-store inventory visibility to help facilitate a seamless and consistent omnichannel shopping experience for customers while at the same time elevating their retailer/brand loyalty levels. Accurate inventory visibility is an especially critical challenge from a BOPIS (buy online pickup in store) perspective. Newer store (and retailing) formats hold the key to the future like Target’s smaller footprint locations and Guideshops, part of Walmart’s most recent Bonobos (men’s clothing) acquisition. I also got to attend a few presentations by companies like Target and UPS wherein they discussed not only the importance of GS1 standards as a means to improve communication throughout the supply chain but also talked about how critical data collection is to ensure smooth operations.
As expected, e-commerce and omnichannel are big themes/topics for discussion. No conversation is complete without touching upon the increasing collaboration of distribution and supply chain-related operations with customer-facing channels. Where these used to be completely separate entities in the past, consolidation to address evolving customer shopping preferences is changing the narrative. And fast. Cross-channel order fulfillment and returns processes have altered data requirements for all ecosystem participants – including logistics service providers, manufacturers, and retailers – perhaps forever. The need for standardization in order to manage and maintain these highly fragmented and distributed supply chains now exists more than ever before, thereby necessitating the existence of organizations such as GS1 and ISO that endeavor to ease data collection-related pain points.Here are some of the highlights from the time that I was at the conference:
- Reverse logistics and returns management is now just as critical a discussion point as order fulfillment. A particularly telling statistic highlighted around this by UPS is the 10-11% growth rate highlighted by UPS for returns, with the percentage being higher for online purchases. This simply means more data requirements, Some of the major points of discussion around this topic included:
- Returns management requirements explode around the holiday season – from Thanksgiving (in November) to January.
- The aim is to provide a frictionless returns experience (much like shopping) to customers in order to encourage brand loyalty and keep them coming back for future purchases.
- Retailers and brands are starting to offer refunds while packages are in transit, as soon as the returns label is scanned. The quicker consumers get their money back, the more they are going to come back to the brand to shop.
- There is rising interest in barcode verifiers; however, adoption today is largely in the pharmaceuticals space for labels’ UDI compliance verification. That said, retailers and their supplier partners are also starting to evaluate these devices to deal with the growing issue of chargebacks for labeling non-compliance (poor quality and unscannable barcodes, in particular). Again, data quality is of paramount importance.
- The hardware ecosystem for barcode verifiers remains relatively small, when compared to other AIDC solutions in the marketplace. The main vendors in this space are – Axicon, Cognex (with its WebScan acquisition), Microscan, and REA Verifiers.
- In-line verification is an area of interest to help end users test label print quality changes over time. For now, Microscan offers in-line verifiers that can be integrated into stationary printers.
- For the most part, however, these verifiers support label verification on production lines, working in conjunction with machine vision systems to help end users adhere to ISO standards (and others).
- The Trading Partner Alliance (TPA) created SmartLabel™ to enhance product transparency for modern consumers that actively seek out information on their purchases. The label aims to provide shoppers with detailed information on the food & beverage, household, and personal care products that they use and consume. It was interesting to hear Jim Flannery, Senior Executive VP of the Grocery Manufacturers Association, talk about this initiative along with what it meant for CPG manufacturers like Mondelēz and Unilever who were also part of the panel discussion. More than 8,200 products today have the SmartLabel™ tag since its launch in January 2016, with the GMA expecting the number to cross 34,000 by the end of this year (including national private label brands and pet care items). While QR codes are the most widely used call-to-action on product packaging for encouraging consumers to scan and learn more about their purchase, VDC also sees a tremendous opportunity here for Digimarc with its digital watermark-based barcode.
Data collection and analytics have never been more important than they are today. Organizations’ initiatives to improve the robustness and infallibility of their supply chains will only make data more critical and a central discussion point when it comes to investment considerations. This will bring their technology investments into sharp focus, particularly on the data capture side. VDC will continue to explore these themes (and more) with our 2017 Research on relevant industry topics like omnichannel enablement and cross-channel fulfillment.