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Expanding Use Cases for RFID – Enabling BOPIS, Cutting Inventory and Speeding Checkout

Retail TouchPoints – The increasing popularity of omnichannel initiatives such as BOPIS and ship-from-store has given new urgency to a perennial retail problem: executing store-level inventory accuracy. Reducing out-of-stocks always has been critical to boosting sales: after all, customers can’t buy what they can’t find. Now, however, with many stores doubling as online fulfillment centers, there are new requirements for quickly locating items ordered online so they can be prepped for shoppers coming into the store to pick them up. That makes its more vital than ever for retailers to know exactly what items are where at any given time.

Comments from Ken Morris:

The growth of BOPIS and other omnichannel services has ramped up retailer demands for more accurate inventory across the entire enterprise. For many retailers, “it’s not just inventory for the stores, it’s also e-Commerce, mobile and call center [channels],” said Ken Morris, Principal, BRP Consulting in an interview with Retail TouchPoints. Many retailers maintain separate inventories for each channel and still rely on technology that syncs them up nightly, or even less frequently than that. This is the equivalent of “trying to cross Fifth Avenue at noon with yesterday’s traffic information,” he added.

When retailers lack up-to-the-minute inventory data, “they use safety stock to account for the lag time,” said Morris. “For example, if the safety stock level for an item is two, and that’s how many are in a store, someone placing a BOPIS order will get a message that the item is out of stock. That’s crazy, because it means retailers are over- inventorying and buying more than they need.”

Costs go beyond just buying more items than are needed: retailers with excess inventory in the wrong places are “marking down product that they could have sold at full price, so they are often making little or no profit,” on those transactions, said Morris.

However, when armed with RFID-enabled inventory data from stores and distribution centers, retailers can enhance the profitability of individual transactions. For example, while most items bought online and shipped from a store are sent from the location that’s geographically closest to the customer, this isn’t always the most cost-effective move.

“I’m on Cape Cod, so most retailers would automatically ship an item from their Hyannis store,” said Morris. “But the reality is that if it’s a seasonal cold-weather item and it’s Cape Cod in the winter, they are quite likely to sell the item at full price in the store itself. But the same product might be sitting in ‘dead’ inventory in Jacksonville, Fla. If the retailer can get a full-price sale on the item, it can more than cover the extra shipping cost to send it from the Florida store.”

Integrating RFID and IoT also can help with in-store task management, providing associates with real-time data about misplaced products or items that need to brought onto the sales floor from the back room.

Retailers that have deployed IoT technologies in their stores also can get more out of their RFID investment. “There are a lot of devices — products themselves and smart shelves — that could be enabled, or already are capable of, broadcasting information, but no one is listening,” said BRP’s Morris. “Even the lights in the store are broadcasting, because when they fail they are providing an alert that they need to be replaced. We think that everything will broadcast in the future, so for example a smart shelf label could alert a system that an item is out of stock.”

Integrating RFID and IoT also can help with in-store task management, providing associates with real-time data about misplaced products or items that need to be brought onto the sales floor from the back room.

There are customer-facing applications as well: “We built a custom app for one of our furniture clients that leveraged RFID for product location,” said Morris. A customer that viewed a living room set online could later go to the store, and if the customer had opted in as a member of the retailer’s loyalty program, “they could bring up what they had previously viewed on the app, and get a map around the store to every product in the set, leveraging RFID,” said Morris. “People are merging the online and in-store experience in this way today.”

Read Full Article: Expanding Use Cases for RFID – Enabling BOPIS, Cutting Inventory and Speeding Checkout

‘There are a lot of uncertainties’: The impact of the first direct-to-consumer brand IPO

Glossy – Late last year, DTC footwear brand Allbirds surpassed a $1 billion valuation, making it one of the largest DTC success stories of the last decade. But while an eventual IPO from either Allbirds or one of the other comparable DTC juggernauts like Warby Parker seems inevitable, it won’t necessarily open the floodgates for others in the space.

While competitors like Bonobos and Warby Parker have all hit the $1 billion mark, as well, Allbirds, launched in 2016, outpaced them both in terms of how fast it achieved unicorn status. Now that the company is one of the largest DTC fashion brands out there, the question is whether it will be pursuing an IPO. When reached for comment, the brand denied that an IPO was imminent.

“We have seen a shift in the last few years, as a number of manufacturers have moved to direct-to-consumer offerings,” said Kathleen Fischer, director of marketing at Boston Retail Partners. “This disintermediation offers significant benefits that brands such as Allbirds and Casper have used to their advantage. If [a major DTC brand] has a successful IPO, we will likely see additional DTC brands testing that route. But as they look at this option, these brands need to remember that IPOs require companies to release public metrics and answer to shareholders, which may make it not as desirable as finding a partner to acquire the brand.”

Read Full Article: ‘There are a lot of uncertainties’: The impact of the first direct-to-consumer brand IPO 

‘It’s a different play for them’: Luxury brands are turning to mega-celebs to lure young shoppers

Glossy – Seeking out collaborators with mega-star power among young audiences is trending among luxury brands. Stella McCartney is the latest, announcing on Friday a new collection with Taylor Swift tied to Swift’s upcoming album, “Lover.” Few details other than the collection’s existence have been shared — a post by Swift on Instagram said more information will be revealed closer to the album’s late-August release.

While this is Swift’s first fashion collaboration, Stella McCartney has previously worked with designers including Stan Smith and Ed Ruscha. But Swift is easily its highest-profile collaborator — with millions of young fans — and notably comes from outside the fashion industry.

This is a tactic that is becoming common for luxury brands. In March, Tommy Hilfiger debuted a collection designed with actress and singer Zendaya, who has 56 million Instagram followers. In late 2017, Helmut Lang collaborated with hip-hop star Travis Scott, who has 17 million Instagram followers.

“Luxury brands’ loyal customer bases are aging, and many of these brands realize the importance of attracting younger segments,” said David Naumann, vp of marketing at Boston Retail Partners. “Some brands have added new lines to appeal to younger shoppers, such as streetwear or styles at lower price points.”

“Celebrity collaborators that are popular among younger consumers help luxury brands increase awareness among this new customer segment and inspire them to shop at a store they normally don’t,” Naumann said.

Read Full Article: ‘It’s a different play for them’: Luxury brands are turning to mega-celebs to lure young shoppers

Giant Works to Live up to its Name

Frozen & Refrigerated Buyer – The Ahold banner makes a couple of bold moves in an effort to differentiate itself from mainstream competitors. With a name like Giant Food Stores, consumers tend to expect a lot. To be honest, though, the 96-year-old, Carlisle, Pa.-based chain, part of Ahold Delhaize USA, is generally viewed by shoppers as a very average supermarket, consistently ranked near the middle of the pack. “It’s a reliable, middle-of-the-road grocer, but not a destination,” confirms Karen Strauss, principal at Wilton, Conn.-based Cadent Consulting Group. That’s all well and good, she continues, except that Giant happens to operate in the same market as some pretty heavy hitters, most notably Wegman’s.

Although e- commerce reportedly represents only about 2% of total Ahold sales, “Online ordering and fulfillment are definitive ‘must-have’ services for grocers to compete both locally and nationally,” says Scott Langdoc, senior vp and practice lead at Boston-based BRP Consulting. From Kroger and Safeway to Target and Walmart, “Major national brands are pouring millions into e-commerce, and regional brands must work to keep pace as differentiating will be increasingly difficult.”

That said, Langdoc likes what he sees from Giant so far. But in order to stay ahead of the curve, the chain will have to remain “hyper-focused” on ways it can improve. “Customers expect the perfect blend of the assortment they know from Giant stores along with the most efficient, frictionless e-commerce experience possible,” he says. So although the chain is off to a good start, there’s no letting up.

Read Full Article: Giant Works to Live up to its Name

As luxury competitors thrive online, Capri Holdings bets on aggressive brick-and-mortar expansion

Glossy – In the past two years, Capri Holdings, formerly known as Michael Kors Holdings, has attempted to establish itself as a competitor to huge luxury groups like LVMH and Richemont. In the last two years, it spent billions to acquire big brands like Versace and Jimmy Choo.

“Opening more stores is one strategy to boost revenues, but it could backfire,” said David Naumann, vp of marketing at BRP Consulting. “Opening stores takes time, and if they are not in the right locations, they have the risk of increasing revenues at the expense of profits. For a faster revenue boost and controlled profit margins, Capri Holdings should consider focusing on expanding its distribution with luxury department stores or online marketplaces.”

Read Full Article: As luxury competitors thrive online, Capri Holdings bets on aggressive brick-and-mortar expansion

Cities of luxury: Dubai – Luxury Memo special report

Luxury Daily – As the business hub of the Middle East and one of the world’s wealthiest cities, Dubai has attracted its fair share of affluents and luxury brands. Luxury is arguably the primary industry in Dubai, as the city’s economy revolves around trade, tourism, real estate and financial services. The United Arab Emirates has increasingly become a haven for the ultra-affluent from around the globe, and brands across luxury sectors have expanded their presence in Dubai.

“Physical stores are essential for luxury brands expanding to Dubai, especially for brands that don’t have global brand awareness,” said Ken Morris, principal at BRP Consulting, Boston. “When consumers are buying extremely expensive products they want to see, touch, smell and try the products. “The experience is oftentimes just as important as the product itself,” he said.“Luxury consumers love the theater of shopping and want to be treated like royalty.”

“With more than half of the population in the Arab world under the age of 26, according to Vogue Arabia, retailers need to appeal to the communication styles and mediums preferred by younger shoppers,” BRP’s Mr. Morris said. “These young shoppers will be their future customers and brands need to introduce them to the brands and inspire them become loyal customers.”

Read Full Article: Cities of luxury: Dubai – Luxury Memo special report

The long, slow fall of Lord and Taylor

Glossy – The world of department stores is facing rough seas. One company that has been hit particularly hard is Hudson’s Bay Company, the Canadian owner of retailers including Saks Fifth Avenue that announced plans earlier this month to sell the floundering Lord & Taylor brand.

“The challenges for department stores are primarily the result of selling commodity products — products that are available at their competitors’ stores and also sold by the manufacturers’ branded stores,” said Ken Morris, principal at BRP, retail consulting firm. “The best way to survive is to differentiate your brand through experiences, just like some of the successful European department stores such as Galeries Lafayette, Harrods and Selfridges.”

Read Full Article: The long, slow fall of Lord and Taylor

Highsnobiety begins its e-commerce transformation

Glossy – Highsnobiety, the streetwear media company founded in 2005, is adding e-commerce with the debut of an exclusive collection of Prada’s newly relaunched Linea Rossa athletic line. Highsnobiety will be the only place outside of Prada’s own channels where this collection can be purchased.

The new platform is intended to be a place for highly curated product drops and exclusive collaborations for Highsnobiety. Jeff Carvalho, managing director of Highsnobiety, said that launching with a traditional luxury brand like Prada, as opposed to a streetwear brand was a conscious move.

“Everyone probably assumed we would launch with a sneaker,” Carvalho said. “We wanted to do something a little surprising, and even in the short time since it launched, we’ve learned so much. We now know that our customer is willing to pay for a premium luxury product.”

“Selling streetwear on Highsnobiety enables Prada and other luxury brands to reach a large number of shoppers that are interested in streetwear,” said David Naumann, vp of marketing at BRP, retail consulting firm. “With more than 6.5 million unique visitors to Highsnobiety each month and more than 5 million followers [Facebook, Instagram and other social channels combined], Prada has a captive audience for this product category. Prada joins several other luxury retailers that are expanding into streetwear to attract younger customers to their brand, and leveraging third-party media and marketplaces is a great way to accelerate the awareness and sales of new product categories.”

Read Full Article: Highsnobiety begins its e-commerce transformation

Neiman Marcus pushes into secondhand retail as resale category climbs

Luxury Daily – Retailer Neiman Marcus Group is furthering its interest in luxury resale with an investment in designer handbag and accessory consigner Fashionphile, its latest partnership with an upscale secondhand platform.

In light of the rapid growth of the high-end consignment market, Neiman Marcus has previously sought strategic relationships with resale retailers. However, its minority stake in Fashionphile marks the retailer’s first investment in a secondhand luxury company.

“Secondhand or ‘preloved’ luxury merchandise is joining the mainstream trend of consumers that are passionate about sustainability and recycling,” said David Naumann, vice president of marketing at Boston Retail Partners, Boston. “Buying used merchandise and clothing doesn’t have the stigma it had in the past when people were embarrassed to admit they purchased an item at a secondhand store.

“Now, even some very affluent consumers are comfortable and proud to purchase previously-owned items,” he said. “Partnering with luxury resellers enables Neiman Marcus customers to enjoy the benefits of luxury goods at a fraction of the full price and it is a great way for aspiring consumers to obtain luxury goods they normally couldn’t afford.”

“Partnering with resellers enables luxury retailers to participate in the secondhand market opportunity without setting up completely new processes for obtaining used merchandise, inspecting it and managing the inventory and promotion of the items,” BRP’s Mr. Naumann said. “It allows them to offer used merchandise options immediately with minimal start-up costs.”

Read Full Article: Neiman Marcus pushes into secondhand retail as resale category climbs

How Madewell could become a billion-dollar brand

DIGIDAY – Madewell, which has been acting as the J.Crew Group’s breadwinner as the flagship brand’s sales struggle, is on a mission to double its annual sales from $500 million to $1 billion.

The company announced yesterday that Libby Wadle, who was previously Madewell’s president, will become its first CEO. In an interview with Fortune, Wadle said that she was getting a title change because the “complexity of the business is changing.” Madewell generated more than $500 million in revenue last year, and Wadle said that “we have our eyes set on becoming a billion-dollar brand in short order.”

Madewell has room to grow, but it will have to do so without diluting the brand. Ken Morris, principal at BRP, retail consulting firm, praised Madewell for its “narrow focus,” and said that its reputation for “offering a great product at good prices,” is what’s helped build customer loyalty.

Read Full Article: How Madewell could become a billion-dollar brand