Tuesday, October 23, 2012

The Future Stores of Today

"What is happening in the Rheinberg Future Store is a masterpiece of integration. We now understand that the integration of these technologies in one store is possible." - Zygmunt Mierdorf, member of the Management Board of the METRO Group
Metro MGI aimed to make the life cycle of a product transparent. They have used RFI technology from back-end supply chain management, through inventory tracking on the shelves and finally purchasing.
I have given below the details of the life cycle of the product.
Product is packed in boxes having RFID tags. When this box leaves the distribution center it is scanned when it passes the door. This shipment data is automatically sent to the store manager. Therefore the store manager will know exact quantity of goods to expect and when to expect.
As soon as the shipment arrives it is again scanned in the store. This data is the compared with previous shipment data to ensure all the goods have arrived. If anything is missing, it can be immediately re-ordered. This also allows greater visibility into issues such inventory shrinkage, counterfeit etc.
The carts in the store are RFID equipped. So, when a customer enters a store and pulls a cart, the RFID tag gets activated and the store manager can then track the number of shoppers and duration of their stay.  The shelves also have built-in RFID which helps track misplaced items and low volume items. For example the shelf triggers a replenishment alert to the back office if a product volume is below a set threshold.
Once the RFID tagged products are checked out, the item is removed from the inventory and supplies is updated stores stock level of the product. 
One of the key technology revamp required for this ‘Future Store’ was complete integration of all RFID systems.
Results of this implementation:
High Customer satisfaction: As per study conducted by Boston Consulting Group, 50 percent of the people gave positive feedback on this technology including people in old age bracket. The customer satisfaction soared from 34 to 52%.
Save Money – Due to tight inventory integration and control the company was able to save money.
Save time – Due to automatic information transfer, the company could reduce time on manual counting.
Improved supply chain end to end efficiency and visibility – The RFID tracking system allows real-time tracking of inventory and shipment.
On a final note: RFID system also provides customer data such as duration of stay and count. This data can be utilized with advanced data analytics methodologies to create even more intelligent stores and more customized user experience.

Question: Since, METRO understands its role as a pioneer for modernization of retail outlets; It is open to sharing its assessments and consumer surveys with other retailers. Will other retailers take this opportunity to design more such future stores?

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