If you find yourself avoiding retail stores these days, you're not alone. Consumers everywhere are complaining about the frustration they experience when shopping at retail outlets. They can't find what they want easily, and they can't get much help from store clerks. Price labeling is a haphazard affair, and even if an item is clearly priced, the amount that appears at the checkout register often doesn't match the labeled price.
In fact, many consumers are all but boycotting stores. Nearly two-thirds of the 1,000 consumers who responded to a recent survey by Cap Gemini Ernst & Young (CGE&Y), chipmaker Intel and networking leader Cisco Systems said that problems like these had caused them to stop shopping or to shop less frequently at retail stores.
Unfortunately for retailers, the ranks of the disenchanted are not limited to consumers, and the problems are not confined to retail outlets. Well-documented inefficiencies in retail supply chains also cause head aches for supply chain partners like manufacturing plants and DCs. In too many cases, store shelves sit empty while the merchandise that's supposed to be on display gathers dust in a DC, in a nearby warehouse or even in the back room of the store itself. Fast—selling items are not replenished quickly, due to poor communications with upstream links in the supply chain. When this happens, all supply chain entities miss out on sales and profits.
To deal with this crisis, the three technology companies—CGE&Y, Intel and Cisco—recently launched an initiative called "Extended Retail Solutions," or ERS. In a nutshell, ERS can provide retailers with an open standards-based communications system designed to improve supply chain efficiency and enhance the customer's in-store experience. ERS employs radio-frequency identification (RFID), wireless technologies and applications that require real-time data flow. Access to updated information lets DCs and other supply chain entities respond faster to information collected at retail outlets, increasing profitability through improved inventory management.
Key to ERS is the adoption of open standardsbased technology in stores, according to Mark Rein, senior manager at CGE&Y. "The architectures that most retailers now have use proprietary technologies, and in many cases there is little or no networking in these systems. These architectu res inhibit the use of emerging technologies for customer self service, wireless networks and RFID," says Rein. "Very few companies can provide 15-minute item velocity snapshots to suppliers, which is one way to not only drive efficiency in the supply chain, but also ensure that a retailer's top SKUs are on the shelf, especially items that are part of a promotion."
Can an initiative like ERS bring consumers back to the stores? There are no guarantees, of course, but it has the potential to untangle some of the snarls. For example, if retailers are able to send suppliers and DCs real-time inventory data,they're less likely to face stockouts. Promotions, special sales events and other merchandising efforts can be more finely matched to consumer demand. Individual store managers can be notified automatically of stock problems or other events that require attention. Retailers can reduce labor costs through increased use of self-service solutions.
For more information on Extended Retail Solutions (ERS), call Mark Rein at (312) 879-3441 or send an e-mail to