Cha-ching! Moving to the RFID money-making phase
20 May, 2006
category: RFID
So far, the whole RFID thing’s mostly revolved around ‘slap and ship’ operations … at least in the commercial sector.
But more and more, companies appear to have the technical prowess to take RFID to the next level, by managing data appropriately.
Take OATSystems and ADT, a unit of Tyco Fire & Security. The business partners just announced plans to team with Intel Corporation and leverage a data-capturing scheme. Using RFID-enabled hardware, software and services, the partners will deploy a system in 10 retail stores that will help retailers track promotional products and provide critical information back to suppliers such as Proctor & Gamble and Kimberly-Clark. To help validate the ROI, an independent academic institution of the retailer’s choosing will establish the parameters of the study, monitor control stores and deliver a final report on the ROI.
We say “cha ching.”
SEE BELOW:
OATSystems and ADT Announce Promotions-on-Standards Program to Ignite RFID ROI; Leaders Rally Retailers and Suppliers to Validate ROI in Standards-Based Real-time Promotions Execution
WALTHAM, Mass. –(Business Wire)– May 18, 2006 – OATSystems(R), Inc., and ADT, a unit of Tyco Fire & Security (NYSE:TYC), today announced a proof of ROI program designed to validate the return on investment from standards-based RFID-enabled promotions and ignite the next phase of RFID deployments. Together with Intel Corporation (NASDAQ:INTC), the companies will provide RFID hardware, software and services necessary for a 10 store retail deployment to help retailers track promotional products and provide critical information back to suppliers such as Proctor & Gamble (NYSE:PG) and Kimberly-Clark (NYSE:KMB). To help validate the ROI, an independent academic institution of the retailer’s choosing will establish the parameters of the study, monitor control stores and deliver a final report on the ROI.
“Excellent promotional display execution is a ‘win, win, win’ for the retailer, the manufacturer and, most importantly, the shopper because it meets the expectation of having the right product in the right place at the right time,” said Milan Turk, Customer & Consumer Leader, Proctor & Gamble. “Improving display execution is a cornerstone of our EPC Advantaged Strategy that we initiated earlier this year based on pilot experience with our retail partners. Those pilots clearly demonstrated that the Electronic Product Code enables work processes to be fine tuned or revised to improve the efficiency and timeliness of product arriving on the store floor. Having that product available when and where the shopper expects it not only enhances shopper satisfaction but also improves sales.”
Trade promotion spending by manufacturers is a massive budget item, representing 12%-15% of sales for most companies. Unfortunately, study after study and the day-to-day experiences of manufacturers and retailers show that the returns on trade promotions are far less than satisfactory. Real-time Promotion Execution (RPE) is a new, RFID-centric business process that can help consumer products manufacturers and retailers to dramatically increase promotion effectiveness which may result in increased promotional sales, decreased execution costs, and greater shopper satisfaction.
According to Cheryl Perkins, senior vice president and chief innovation officer for Kimberly-Clark, RFID technology can be used as a business tool to help deliver greater value to K-C and its retail customers. “As we continue to explore future uses of RFID technology, we expect to gain valuable insights on how to improve the effectiveness of various business applications built around scaleable standards, such as product promotions. This standards-based approach will ensure we deliver the right product solutions to the shopper at the right time – increasing the success of our product promotions.”
RPE uses RFID-tagged displays and promotion product cases to measure in-store promotion execution by tracking where and when the displays and promotion inventory are in the store. Manufacturers and retailers can track when the items reach the store, when they’re moved to the sales floor, and how long they are there – all in near-real time. This information is then integrated across many stores and manipulated with powerful analytic tools. Illustrated by the recently released MIT study on RFID-based promotions, this enables a new business process that is cost-effective and dramatically increases promotion sell-through, correction of poor in-store execution and promotion intelligence, and lowers the cost of promotions management.
“Improving promotions management and execution represents a significant supply chain opportunity for the industry,” said Bernie Hogan, chief technology officer and senior vice president, GS1 US. “A standardized EPC approach offers the best solution for retailers and suppliers by increasing collaboration between trading partners and providing unprecedented visibility into the supply chain.”
The proof of ROI program will extend over six months, involve ten stores at five different retailers and five to 10 large consumer products manufacturers. Once the participants have been identified, ADT will survey each retail site to determine optimal placement of ADT’s Intel-based read points, antennas and portal frame. OAT’s OATxpress will capture, filter, and manage RFID data from the edge to enterprise applications throughout the promotional events. OATaxiom will reside on Intel(R) Itanium(R) 2 processor-based servers at a corporate location providing a robust analytics platform as well as a supplier portal to share and evaluate promotional programs between retailers and suppliers. The research study will track control groups against live implementations and provide analysis at the end of the six-month trial.
OAT Foundation Suite 5.0 supports the following software platforms: IBM RFID Premises Server, SUN Solaris and Oracle, Red Hat Linux and PostgreSQL, Microsoft Windows and SQL Server.
Retailers and suppliers interested in participating in this program may speak with OAT representatives at the Retail Systems 2006 Conference and Expo, booth #525, or call OATSystems or ADT.
More information on the program and Real-time Promotions Execution can be found at www.oatsystems.com.
About Intel
Intel, the world leader in silicon innovation, develops technologies, products and initiatives to continually advance how people work and live. Additional information about Intel is available at www.intel.com/pressroom.
About ADT
Celebrating its 131st anniversary, ADT Security Services, Inc., a unit of Tyco Fire & Security, is the largest provider of electronic security services to nearly six million commercial, government and residential customers throughout the United States. ADT’s total security solutions include intrusion, fire protection, closed circuit television, access control, critical condition monitoring, electronic article surveillance, radio frequency identification and integrated systems. ADT web-site address is www.adt.com.
About OAT
OATSystems, Inc. is the recognized RFID framework leader with software that empowers businesses to achieve competitive advantage from radio-frequency identification (RFID). As a pioneer in the development of RFID technology, OAT has been setting the standards in RFID for over half a decade and is responsible for industry firsts that include; the largest scale and largest scope of deployments, as well as the most innovative approaches to providing enterprise-wide RFID solutions. OAT’s multinational client base consists of over 70 customers in retail, CPG, consumer electronics, manufacturing, life sciences, aerospace and defense. Headquartered in Waltham, MA, OAT has offices in Austin, Chicago, London, and Bangalore and is on the Web at www.oatsystems.com.
Intel is a trademark or registered trademark of Intel Corporation or its subsidiaries in the United States and other countries. Other names and brands may be claimed as the property of others.
