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Industry News - January 1st, 2010



Three Must-Attend Events at NRF Big Show

Will you be hitting the Big Apple in January for the annual NRF Big Show? Here's the rundown on some of the must attend events scheduled to take place at retail's biggest event. 

The National Retail Federation will host Retail's Big Show from January 10 -13th at the Jacob K. Javitz Convention Center in New York City. Some of the events not to be missed at this year's event include:

-RetailROI Super Saturday: this first-ever research and networking event is hosted by Retail Orphan Initiative (Retail ROI). RetailROI Super Saturday takes place 9:30 a.m. - 3:30 p.m., Jan. 9, 2010 at the Marriott East Side in York City. The event combines retail's leading CIOs, analysts and strategic thinkers in a single venue and will allow participants to discuss the key trends, holiday results, and innovative strategies that are shaping the retail industry as the New Year begins. All proceeds from the event benefit RetailROI directly. 

- Rock and Roll Retail: Retail's first battle of the bands will take place at New York City's legendary blues bar, B.B. Kings before the NRF show. The first Rock & Roll Retail Event will be held on Sunday, January 10, 2010 from 4:00 - 6:00 p.m. and will feature retail's best known leaders, analysts and others who will take the stage to show off their musical chops.

-Retail 2010 IT Forecasts: discusses the ARTS development initiatives that will take shape in 2010 and will feature highlights from the just released 2010 Store Systems Study, which is produced by RIS News and IHL Group. The study presentation will feature Greg Buzek, president of IHL Group and Joe Skorupa, RIS News editor-in-chief. The session will take place on Monday, January 11, 2010 at 3:00 PM in the Expo Hall in Room 3D09.


Belk Dramatically Cuts Printing by Adding In-Store Signage Solution

Belk manages its in-store signage with Retail Enterprise Suite Episys and has already seen a reduction of approximately 30-40% in signage printing. Belk replaced a largely manual and time-consuming series of processes in favor of an integrated, automated solution from Episys.

"A lot of the initial features that were appealing to us related to the solution's ability to offer integration with other systems, including pricing and inventory, and the possibility of printing in-store," says Janetha Jones, business systems analyst for the signage application at Belk.

Prior to implementing the solution, Belk used hand written requests for signage, and sent to an external company that created a PDF, which was then manually printed and these were sent to stores based on a spreadsheet. This method took a great deal of time and effort. Belk then tried a different process, using a Lotus Notes based application, with the templates designed in Quark, but it turned out be a very slow system, with which it was difficult to customize or integrate.

Benefits of the Retail Enterprise Suite solution include the more descriptive information on signage, including product detail and benefits, which act as a "silent salesman." Other benefits have included simplifying the spooling process. Previously this was done manually, with a user having to click and spool on each and every store before being able to print the signage. Now spooling is done by the system automatically in the background. 

Jones continued, "One of our biggest wins has been library signs, where at the start of a season we are now able to send the stores a set of signs for each applicable product with appropriate prices depending on the type of promotion being run at any time. This has reduced the number of signs we print by 30 to 40%. We will get a further reduction when we implement inventory integration and only send signs to stores that have the merchandise.".


Limited, Urban Outfitters Get Behind New Focus on Speed to Market

The Limited and Urban Outfitters are implementing structural improvements to their businesses which are generating competitive advantages over other retailers according to Kimberly Greenberger, CFA, Citigroup. 

Management at Limited is focused on speed and reducing lead times says Greenberger through 1) pre-positioning of components and raw materials (i.e. purchasing fabric for bras or glass container and metal lids for candles) and booking factory times, 2) reducing the design process time, 3) working more closely with vendors during the process, and 4) forming joint-venture factory in India to significantly cut lead times. 

Additionally, Greenberger adds the company is working to dramatically reduce its reorder times on core products (products that live within the assortment year round) and can currently turn around product in as little as 30 days to 6 weeks (if they already own the components or fabric and have booked factory space) by leveraging color and print libraries, positioning (pre-buying) long lead time fabrics, pads and capacity to support chase strategy and aligning around fit to offer favorite fits with fewer iterations. The Victoria's Secret division (VS) has also changed its season plan to 6 seasons from 4 previously which will shorten the planning window and increase speed to market. Over time, management believes 40-50% of its entire VS assortment can be on fast lead times (likely around 2-6 weeks), while Bath & Body Works division is working to increase the percentage of new products that were completed in 26 weeks or less to 50% in 2009 from less than 20% in 2008.

Another company that is using speed to its advantage is Urban Outfitters which according to Greenberger already posts some of the fastest lead times. Management is focused on reducing lead times and increasing speed to market in order to buy less up front and improve speed on re-orders (chase into fast selling items/categories) through consolidating the number of factories it works with to become more important to each factory (get higher priority and better deals), opening an overseas production office in Hong Kong, cutting out agents and going direct to the factories (increase initial mark-up or IMU) and ordering later to lower costs and reduce fashion risk as buyers make more informed decisions based on current sales trends. 

Additionally the company is implementing TradeStone supply chain management software to allow visibility to the entire supply chain. Phase 1 (addresses the process of getting the goods from the factory to the store) is currently being rolled out, while Phase 2 (addresses the process of designing the product through production) is expected to be rolled out in the beginning of its fourth quarter.

"We believe speed is the only durable edge in fashion to drive superior and consistent product execution based on better informed decision making process to improve sales performance," says Greenberger. "Additionally, an increased ability to adjust/edit orders based on current selling information should permanently enhance productivity and merchandise margins by delivering the most optimal assortment and reducing mistakes (markdowns).


Rite Aid's New Loyalty Program Grows to 4.3 Million

Rite Aid plans to aggressively launch its new wellness+ card based loyalty program nationally next year. The pharmacy also announced that its RX Savings Card enrollment has now grown to over 4.3 million numbers.

In mid-October, the pharmacy launched its loyalty program called wellness+ in four test markets, supporting it with a comprehensive marketing plan that included TV and radio advertising. Wellness+ is a card based program rewards loyal customers with increasing levels of front-end discounts and health benefits based on the dollar amount of front-end purchases and the number of scripts filled.

The four test markets included three markets, where the retailer offered rewards for both front-end and pharmacy purchases and one market, where it offered rewards on front-end purchases. Last week, 49% of front-end sales in the four test markets were from customers using the wellness+ card. 

"This level of customer usage is very impressive, given that we're only eight weeks since the rollout, and shows good customer acceptance of the program," says John Standley. "Besides building customer loyalty with our existing customers, wellness+ will provide its valuable customer data and help us attract new front-end and pharmacy customers."


Gartner Completes Acquisition of AMR Research

Gartner announces it has completed its previously announced acquisition of AMR Research for approximately $63 million. With projected full year 2009 revenues of approximately $40 million, AMR Research is a leading research and advisory services firm serving supply chain management and IT professionals. 

"AMR is the gold standard for research focused on supply chain management, which is a central and growing issue for many large organizations," said Gene Hall, Gartner's CEO. "Supply chain management and IT are inextricably linked, so this acquisition is an excellent strategic fit for our business. We will leverage our scale and worldwide distribution to sell AMR's world-class suite of research, consulting and events to our much larger client base, as well as introduce Gartner's services to AMR's existing clients."

As previously announced, Gartner does not expect the acquisition of AMR Research to have a material impact on its 2009 financial results, but does expect it to be significantly accretive to its revenue, earnings and cash flow over time.


Lowe’s Launches First Energy Centers

Lowe's launches it's first Energy Centers in 21 California-based stores, a one-stop, easy-to-shop destination that helps customers to create an energy plan that fits their budget and home improvement goals. 

The Energy Center outlines three ways for customers to save energy and money: 

· Measure how much energy they use or lose with power monitors and other devices 
· Reduce energy consumption with CFLs and other money-saving products 
· Generate and use renewable energy with solar panels 

An information kiosk offers a touch-screen display to help customers evaluate energy needs, and the Energy Center features products that offer alternative energy solutions. 

The Energy Center's kiosk display features product demonstration videos, tips to control energy costs, and a Chooserenewables.com tool that helps consumers assess their home's potential for solar and wind power. 

"Homeowners are paying more attention than ever to their utility bills, and the first step to saving energy is tracking where it's going," said Nick Canter, Lowe's executive vice president of merchandising. "By providing monitoring tools to help customers know their numbers, Lowes is helping them find the money-saving solution that's right for them." 

Lowe's is the first major retailer to offer many of these products in one place and the first to stock and sell grid-connected solar panels in stores. The energy-saving products will be available nationwide at Lowes.com.


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