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New Consumer Product Laws for 2020 You Need to Know About

Posted By RCVF Admin, Saturday, December 12, 2020
Updated: Tuesday, February 11, 2020

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New Consumer Product Laws for 2020 You Need to Know About

By Bao M. Vu, of Counsel, Stoel Rives LLP. 

 

Nationwide, states have and are in the process of implementing new laws and regulations that affect the makeup and disclosures required on a variety of consumer products.  Below is an update on some new laws and regulations that might affect you.

California’s Ban on Animal Testing in Cosmetics:  California’s SB1249 became operative January 1, 2020.  It generally bans the sale of any cosmetics in California that were developed or manufactured using an animal test that was conducted before January 1, 2020.  It includes numerous exceptions, including where animal testing is required to satisfy requirements of a federal, state, or foreign regulatory authority.  There are numerous requirements to this and other exceptions under the law, and more information about the new law can be found here (https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180SB1249) or by contacting the author below.

Utah’s Down Sterilization LawAt the end of 2019, Utah’s Administrative Code Rule R70-101 became effective, and it requires very specific labels for down bedding and furniture.  Among other requirements under the law, labels for these types of products need to now include statements such as “CONTENTS STERILIZED” and the Sterilization Permit Number of the sterilization facility from which the material was obtained.  These and numerous other statements must meet specific size and placement requirements.  More information about this law, its requirements, and its exceptions can be found here (https://rules.utah.gov/publicat/code/r070/r070-101.htm) or by contacting the author below.

Washington State Passes Chemical Content Law: Washington State’s SB5135 has the goal of reducing human and wildlife exposure to toxic chemicals in consumer products.  That law, called the “Pollution Prevention for Our Future Act,” requires the state’s Department of Ecology (“DOE”) to take on consumer products containing high-concern chemicals, identifying as priorities substances such as PFASs, phthalates, flame retardants, phenolic compounds, and PCBs.  It will probably be a few years before the DOE’s regulations under this new law take effect.  More information about this law and its potential ramifications can be found here (http://lawfilesext.leg.wa.gov/biennium/2019-20/Pdf/Bills/Session%20Laws/Senate/5135-S.SL.pdf?q=20200210142234) or by contacting the author below.

About the Author:  Bao M. Vu is California-based attorney with the law firm Stoel Rives LLP.  He regularly advises clients on compliance with complex consumer protection and environmental statutes and regulations.  More information about his practice can be found here.  He routinely provides free consultations to RVCF members, and he can be reached at bao.vu@stoel.com or 415-500-6572. 

 

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Update on EDI & Electronic Communication Teleconference Series Launch

Posted By RCVF Admin, Saturday, December 12, 2020
Updated: Wednesday, February 12, 2020

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Update on EDI & Electronic Communication Teleconference Series Launch

By Susan Haupt, RVCF


RVCF has expanded it’s Open Forum teleconference offerings for 2020 with the launch of a new series of calls focused on EDI and Electronic Communications. 
 

What makes these calls unique is that both Retailers and Merchandise Suppliers are eligible to attend.  The fist session took place on January 15th with over 50 participants. Discussions focused on: 

  • Best practices for handling existing PO’s when entering into new EDI relationships
  •  Scorecarding for EDI
  •  EDI vs. API technology
  •  Handling retailer specific data requirements
  •  The adoption of Blockchain as a transmission medium in the supply chain
  •  EDI transactions relative to returns  

Based on the discussions during the call, there is tremendous interest in this topic.  With the input of peers and our facilitator, Michael Kotoyan with EDI Academy, a wealth of information was shared to the benefit of both the Retailer and Merchandise Suppliers represented.  

The next call in this series is 3/18/20, followed by 5/13, 7/15, 9/16 and 12/16.  Check the RVCF event page for times and registration.  There is no cost to participate, but registration is limited to RVCF members.  To further support the content of the calls, all participants are granted access to a private, secure community within the RVCF website that houses minutes from each session, other reference materials, plus the ability to interact with one another for further collaboration. 

We look forward to continued work on this initiative.  Questions about the call or other RVCF Member Benefits, please contact shaupt@rvcf.com.

 

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Meeting Retail RFID Compliance While Gaining ROI in Your Own Supply Chain

Posted By RCVF Admin, Thursday, February 13, 2020

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Meeting Retail RFID Compliance While Gaining ROI in Your Own Supply Chain

By Paul Arguin, Senior Director Global RFID, r-pac International Corp.


Suppliers / Vendors are being asked to source tag more and more as retail RFID adoption continues to grow.  With billions of units now in the global supply chain, RFID can provide valuable insights for the suppliers as well as the retailers.  Inventory visibility allows Retailers to be more efficient for their brick and mortar stock and replenishment, but also allows Retailers to fulfill through Buy Online Pickup In Store (BOPIS) and standard e-commerce.  It makes sense that more and more retailers are requesting product tagged with RFID to enable these benefits.

In addition to ensuring retail compliance is met, r-pac International has assisted factories and suppliers/vendors to achieve efficiencies and savings in areas such as pack and ship accuracy, charge back avoidance and ASN delivery. 

What do retailers want from their supplier /vendor community when requesting RFID?

Many retailers have been using RFID over the past several years.  Many have unique requests, but they all want to ensure that an approved RFID inlay is used, the RFID tag is properly encoded and the tag is placed on the correct product.  Others such as Walmart recently announced that it is the Product Suppliers responsibility to have a process in place to ensure that all tags leaving their facility are completely unique, that there are no duplicate tags, and that the tag is placed on the correct product.  Retailers have their own set of chargebacks, but it is clear that any errors and costs to correct, are the responsibility of the product suppliers.

r-pac has a suite of software solutions that enables quick cycle counts, item location, automated product receipt against an ASN or bill of lading (BOL) and pack validation.  Shipment of product can be single carton or multiple cartons.   We can work with a pre-configured packing list or shipping notice to validate against or we can automatically create the ASN.

The solution is modular and allows factories/suppliers/ vendors to grow into the program at their own pace.   The solution includes:

  1. r-pac Retail Tag Validation – checks the tag to ensure the product barcode matches the encoding of the RFID and gives a visual of the decoded EPC (Electronic Product Code) which is encoded in the RFID tag.
  2. r-pac’s r-trac system is the engine for print and encode when ordering tags through us.  Our system maintains a database and follows the GS1 Guideline for IT based Serialization Management.  This system with the inherent QC checks ensures no duplicate EPC’s have been done.
  3. r-pac Retail Packing Validation – ensures that the correct product gets packed or has been packed in each carton – mispacks are eliminated.  This can also be used for pre-defined pre-packs to ensure the correct mix of product is in each box.
  4. r-pac Retail Shipping Verification – can be set up to check each box plus check the entire shipment against a shipping document or ASN.  The option to create the ASN is available.
  5. r-pac Receiving Verification / Electronic Proof of Delivery (EPOD) – validates a shipment against a PO or shipping document to ensure what you expect is what you receive.  This can provide early notification of problems to give time to correct prior to shipment.

Each of these solutions collect the data – including EPC’s – and stores historical operational data in the cloud.  Documentation of the operation can be used to review with the retailer for discussions on chargebacks or general compliance.  Each shipment can be setup to store the individual EPC’s and report the exact product by serial number that has been shipped against an order.

Benefits are abundant to improve factory/supplier/vendor supply chains – while ensuring 100% compliance with Retailer mandates and RFID programs.  Elimination of chargebacks can easily pay for the investment in the technology and most see ROI’s within a few months.

 

 

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Industry Trends within Drop Ship Programs

Posted By RCVF Admin, Wednesday, February 12, 2020

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Industry Trends within Drop Ship Programs

By Joshua Mayer, Managing Partner, Summit Advisory Team

 

As Omnichannel capabilities evolve with offerings such as supplier direct fulfillment (or drop ship), the line between Retailer and Supplier has become blurred from the Customer’s perspective.  Creating a consistent experience throughout the Direct to Customer order life cycle is more important than ever, and requires significant collaboration between Retailer and Supplier.

In this article, we will explore some of the industry trends and best practices/benchmarks within key drop ship program topics:

      Program Policies

      Product Setup & Inventory

      Customer Orders & Shipments

      Customer Returns

      Reporting & Visibility

Program Policies

      Program Goals & Terms

      Retailers are striving for drop ship comprising 15% - 30% of online revenue, 30% - 40% of the online assortment.

      Consistency is key; Suppliers should focus on matching Retailer customer experience metrics and service level agreements.  Speed is important, but consistency across Retailer and Supplier is even more important.

      Reduce complexity by simplifying program topics of contention (e.g., rate of customer returns) into the program fees.  Track each metric independently and discuss it during the Retailer/Supplier quarterly program review.

      Supplier Onboarding Duration

      Maximum of 4-6 weeks for the Supplier to be onboarded and shipping on behalf of the Retailer.

      The Retailer should be targeting a minimum of 60-100 styles (200–500+ SKUs) per drop ship Supplier (varies by category).

      Sales & Operational Planning

      Ongoing assortment planning meetings between Retailer and Supplier; best practice is to build drop ship assortment planning into existing merchandise planning processes.

      Retailers should provide Suppliers with daily operating forecasts, especially prior to key marketing promotions.

Product Setup & Inventory

      Product Content

      Retailers are using the Supplier provided content for their website, other demand channels (e.g., mobile handhelds in-store), and social media (e.g., Instagram posts).

      Product videos are becoming a more popular request by Retailers; Suppliers should have the ability to produce product videos or have a plan in place to begin capturing product videos.

      Inventory Events

      Typical inventory sync processes between Retailers and Suppliers are based on frequency.  Industry leaders are shifting from frequency to event-based inventory updates.

      Suppliers should be able to provide an inventory status (e.g., “discontinued”) to the Retailer in addition to quantity available.      

      Inventory Visibility

      Consumer Inventory vs. Physical Inventory; Retailers and Suppliers should have mechanisms to configure safety-stock levels and create a view of “Consumer Inventory” based on sales and operational plans.

      Consumer Inventory views can (and should) change throughout the season.

Customer Orders & Shipments

      Order Sourcing Logic

      Retailer order management and sourcing logic becoming more robust and minimally needs to account for order completeness.

      Specific order sourcing rules (e.g. resourcing vs initial attempt) for drop ship products since inventory displacement caused by customer returns becomes more impactful as the program scales.

      Operational Performance

      Industry-leading Suppliers are consistently maintaining a 99%+ unit fill rate throughout the year; Retailers expect 99%+ unit fill rate from Suppliers;

      Defined SLAs for all facets of the customer order life cycle; order-to-acknowledgment, acknowledgment-to-ship, ship-to-delivery, etc.

      Supplier ability to cancel customer orders; typically enabled via the portal, EDI, or API.

      Shipping Expenses

      Retailers should provide prepaid accounts to Suppliers for shipment tracking visibility and to avoid unnecessary (1-3%) parcel expenses associated with third-party billing accounts.

      Industry-leading Retailers providing access to either a rating engine endpoint or loading rates into order broker platform for real-time service selection at the time of Supplier packing.

Customer Returns

      Shipper Clarity

      Cluttered packing slips cause confusion to the end customer; ensure that the “order number” is the Retailer order number (for Customer Care/Operational search purposes) and that there is no product pricing on the packing slip.

      Consistency

      Drop ship products should be eligible for all Retailer returns processes; in-store, call center, online, etc.

      Process for carrier returns must be defined for the Supplier, visibility into carrier returns rate provided to the Retailer.

Reporting & Visibility

      Program Level KPIs

      Retailer/Supplier:  Program Profitability (compare drop ship program profitability to other channels)

      Retailer/Supplier:  Sales & Operational Plan vs. Actual

      Retailer/Supplier:  Customer Order Life Cycle

      Supplier:  Inventory Sell-thru (helps define safety-stock thresholds)

      Operational Reconciliation

      Retailer:  Dashboarding for Supplier performance (based on program level KPIs)

      Retailer/Supplier:  Balancing reports for customer order statuses, supplier invoices, etc.

 

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RVCF Announces Launch of E-Comm Product Return Council

Posted By RCVF Admin, Wednesday, February 12, 2020
Updated: Tuesday, February 4, 2020

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RVCF Announces Launch of E-Comm Product Return Council

From the Desk of Kim Zablocky


For years, retailers have created requirements that, if managed correctly, would result in the error free flow of goods through their supply chain and have assessed deductions when their suppliers did not comply. Unfortunately, these charges eroded suppliers’ bottom line. When we created RVCF 20 years ago, the idea was to help merchandise suppliers to comply with their retail customers’ vendor & routing guides in order to improve the flow of goods and to avoid these deductions all together. 

Twenty year later, RVCF remains committed to helping both retailers and merchandise suppliers identify root causes of the issues that have slowed the movement of goods throughout the entire product procurement cycle.

Today, a different problem is eroding the bottom lines of both retailers and merchandise suppliers: E-Comm returns of product from consumers. Once again, Senior Managers are telling us it is the cost of doing business online. As Reagan said years ago, "There you go again”.

RVCF is exploring ways we can measure what is transpiring in the E-Comm marketplace to cause this problem and identify ways to improve the business process on E-Comm product returns. Our objective is not only to reduce or eliminate returns, but to address the handling and resolution of the product. 


RVCF has expanded our focus in 2020 with the launch of the RVCF E-Comm Product Returns Council, sponsored by Newmine, to tackle this challenge head-on.  “Returns is a growing challenge for retailers and brands, especially brands who offers seasonal merchandise. The RVCF Brand members I have talked to are facing serious challenges, such as no visibility to the amount of seasonal merchandise that is being returned by consumers or was never sold by the Retailer”, said a spokesperson from Newmine.

RVCF is tackling the returns challenge, as the financial gain from returns reductions can be substantial for Retailers and Brands alike and includes recovery of lost margin, plus reduction in operating, processing, shipping costs, as well as the cost to refurbish returned merchandise and the cost to liquidate. A general rule of thumb: Every $1M in return reduction equates to $500K in bottom line improvement for the Retailer or the Brand.  Click on the exclusive RVCF link below, answer a few quick questions, and unlock your returns reduction potential for FY20. http://www.newmine.com/returns-calculator-rvcf

Participating with the Council will give our members an opportunity to learn about new technologies that have been proven to reduce returns, discuss impactful steps that can be taken before, during, and after the sale and drive meaningful conversations between retailers and suppliers on how to efficiently process, handle and liquidate return merchandise.

We ask our Retail and Brand members to encourage their returns-focused managers to participate. The first meeting will be held in conjunction with the RVCF Spring Conference followed by the RVCF Fall event.  The group is open to all RVCF Members at no additional cost.  Conference registration is required to participate.

Please feel free to contact me directly for more information at kzablocky@rvcf.com.  

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RVCF On-Time, In Full Impact Survey Now Available

Posted By RCVF Admin, Wednesday, February 12, 2020
Updated: Thursday, February 6, 2020

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RVCF On-Time, In Full Impact Survey Now Available

By Victor Engesser, RVCF


We know that both retailers and suppliers care about On-Time, In-Full  performance, and now is the time to tell us what you think about how OTIF performance is being impacted not just by limited forecasting and sales data sharing but also by order management business requirements such as established purchase order lead times and lock windows, order configurations challenges and changes to the purchase order that occur after it is issued.

We believe a deeper understanding around these requirements and real world behaviors can help trading partners find opportunities for change and improvement.

With this in mind, the RVCF On-Time, In Full Impact Survey is now available for your participation. Your responses will help us identify, benchmark, and report back to you on what trading partners see as the specific challenges that can and should be addressed to support OTIF performance improvements. 


RVCF is constantly working to help retailers and suppliers better understand the impact that business requirements under their control have on trading partner performance. We believe collaboration and regular performance reviews that seek to understand where trading partners experience "pain points" encourages constructive communications and considerations for adjustments to these requirements that can often yield real value to both trading partners.


We encourage you to take this survey and share your insights for how these business processes both support and impede performance, results will be shared and discussed at our Spring conference in April. A RVCF white paper on this topic will follow shortly thereafter.


If you have not already received the RVCF OTIF Survey invitation, contact
shaupt@rvcf.com to request yours.

 

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RVCF Member Spotlight - Career Center

Posted By RCVF Admin, Wednesday, February 12, 2020
Updated: Thursday, February 6, 2020

 

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RVCF Member Spotlight - Career Center

By Susan Haupt, RVCF

In the July issue of the newsletter we published the following article outlining the Career Center that is available to members within the RVCF member site (rvcf.com). 

As a service to the retail industry, the RVCF member site (rvcf.com) features a Career Center that includes job listings for both Retailers and Merchandise Suppliers plus resumes of those looking for their next opportunity.

For Job Posters

Upload the details of your listing in just a few clicks.  Post anonymously or feature your company name and contact information.  Include as many or as few details about the position as you wish and make updates at any time.  Your listing will be available for view by a short list of qualified candidates that possess the necessary skills and experience to make a positive contribution to your firm.

For Job Seekers

If you are looking for your next opportunity, visit the Career Center often to see what’s new or to upload or update your resume.  Be sure to turn on “notifications” in your member profile to receive instant e-mail updates of new listings.

RVCF has assisted many companies and industry professionals over the years by connecting people with opportunities.    Please know that RVCF does not recruit.  We offer this service at no cost to support the industry.  To learn more, contact info@rvcf.com.

In response to requests from our membership, we have now created an enhancement to this service in the form of a Job Description Library.  This resource is comprised of individual documents categorized by function. Each contains descriptions for various positions from a cross section of company types. Access to is available to RVCF members at no charge.

These documents are to be used for reference purposes only and are not intended to replace individual hiring policies with regard to Federal, State and Local requirements. 

 

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Value Added Services - Best Practices

Posted By Pamela Lemarre, Monday, February 10, 2020
Does anybody have any best practices that they would like to share when having to do value added services for their retailers .com channels? Currently we are doing everything post pick.

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Twenty Years of RVCF: A Celebration of Collaboration

Posted By RCVF Admin, Wednesday, December 11, 2019
Updated: Saturday, November 23, 2019

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Twenty Years of RVCF: A Celebration of Collaboration

By Kim Zablocky & the RVCF Team


The Retail Value Chain Federation (RVCF) celebrates its 20th anniversary in 2020. Much has changed in the retail industry over the past two decades in terms of technology, shopping channels, order fulfillment, and customer behavior and expectations. One constant has been the need for collaboration among trading partners and peers to navigate the most pressing challenges, share ideas, and develop innovative yet practical solutions to lift the industry as a whole.

For 20 years, RVCF’s core mission has been to bring industry stakeholders to the table to solve problems. We exist to be the driving force in collaboration. As we celebrate this important milestone, we want to look back at how and why RVCF came to be, how the organization has evolved over the years, and where we stand today.

The Early Years

Heading into Y2K, the economy was surging. The economy and consumer spending were growing at a rate of about 6 percent and unemployment hovered around 4 percent. The retail industry was coming off a strong holiday season and retail sales were up across the board. E-commerce was still in its infancy, accounting for 0.5 percent of total retail sales in 1999.

Retail sales numbers painted a rosy picture on the surface, but angst and aggravation were percolating behind the scenes. Merchandise suppliers were overwhelmed by chargebacks and sales deductions from their retail customers. This was costing suppliers real money, as much as 5 percent of gross invoice in some cases.

In early 2000, about 100 major merchandise suppliers, mostly general merchandise and fashion companies, gathered in New York to discuss this costly problem. The universal feeling was that they were being taken advantage of by retailers. A survey of the attending suppliers revealed two key findings. First, retailers wanted inventory to flow though the system without delay, which was not unreasonable. They wanted the Perfect Order, which was an unrealistic expectation. Second, suppliers admitted that they weren’t doing a very good job at filling orders, which was causing a major disruption to retailer operations.

The decision was made to create the National Vendor Compliance Organization (NVCO) to enable suppliers to come together and figure out the deduction problem. At the second meeting, A representative from Saks Fifth Avenue addressed members of the group, discussing their compliance requirements and the real-world impact of noncompliance. This meeting provided merchandise suppliers with something they desperately craved – direct access to the retailer. The meeting was extremely productive and set the tone for future collaboration.

During the early years of the NVCO, retailers were skeptical about the intentions of the group, which was very much supplier-focused. When retailers realized the main objective was to provide suppliers with the information and guidance they needed to ship orders according to retailer specifications, retailers started to warm up to the organization. A number of retailers, such as J.C. Penney, Kohl’s, and Dillard’s, have been involved since those early years and remain supportive to this day.

A Pivot from Symptom to Cause

NVCO was originally created to give merchandise suppliers a collective voice in dealing with mounting deductions from retailers. The organization was essentially a board of advisors from the supplier sector. But we soon realized having one side represented would not allow us to fully understand the relationship between trading partners and address the needs of both sides. Also, deductions were the symptom, not the cause. To fix the problem, we would have to identify and focus our efforts on the cause.

Once we redefined our purpose, NVCO became the Vendor Compliance Federation (VCF), an independent organization that would represent the interests of all trading partners and the industry as a whole. Rather than simply reducing deductions, VCF focused on the processes, best practices, and solutions that would prevent those deductions from happening. How can vendor compliance be better managed? What technology can be implemented to reduce the risk of errors? How can changes to retailer requirements be communicated to merchandise suppliers more quickly and with more transparency and clarity?

To answer these questions, VCF planned events and developed resources that retailer and merchandise supplier members could use strategically and in their day-to-day operations.

For example, one of the biggest challenges for suppliers has been keeping up with changes to retailer order fulfillment requirements with their vendor compliance program. 20 years ago, retailers used to distribute books that were hundreds of pages long. Suppliers would then have to reconcile changes when a new book was released. Even when these requirements moved online to retailer portals about 15 years ago, tracking changes was still tedious. The schedule and process for updating requirements and alerting suppliers to changes were different from retailer to retailer. Suppliers would have someone constantly combing retailer websites to see if anything had changed. This was a major drain on resources.

Suppliers asked VCF to develop some type of solution in which the organization would track and alert suppliers to changes to compliance requirements. This led to the creation of the Vendor Compliance Clearinghouse in the mid-2000s, which evolved into today’s Compliance Clearinghouse. Currently, RVCF monitors the order fulfillment requirements and compliance programs of more than 100 retailers.

We also saw a need to provide guidance to suppliers in the area of supplier relationship management. At that point, each retailer had their own way of dealing with suppliers – different forms of communication, different nomenclature, different technology, different requirements, different terms and conditions, etc.

Similar to customer relationship management, supplier relationship management involves measuring supplier performance, communicating effectively with suppliers, assessing the value of the supplier to the retailer organization, and other activities that would support a more amicable, profitable relationship and better serve the customer. Our goal was to get retailers on the same wavelength so they could manage and communicate with suppliers in a similar fashion by developing better compliance programs, better compliance scorecards, and better supplier portals. To this day, our organization is still one of a select few that proactively addresses supplier relationship management.

Representing the Entire Retail Value Chain

In 2009, we reassessed what VCF represented. Because the organization was comprised of both retailers and merchandise suppliers, it became clear that VCF was representing the entire retail value chain. This is a much broad concept than vendor compliance. The retail value chain includes all activities involved with selling products to consumers and fulfilling orders, such as forecasting, allocation, order management, order fulfillment, payment, reconciliation, and returns. Deductions for failing to meet retailer requirements could be the result of errors or miscalculations in any area of the retail value chain.

The name of the organization was changed from the Vendor Compliance Federation (VCF) to the Retail Value Chain Federation (RVCF). It’s no coincidence that this change occurred at the same time as the Great Recession. The retail industry changed dramatically in 2008 and 2009. The uncertainty surrounding the recession caused the industry to increasingly focus on cost reduction. E-commerce started to explode.

The key to success in this new retail reality continued to be moving goods from point A to point B as quickly and efficiently as possible. The original mission of RVCF to reduce deductions and increase profits through trading partner collaboration was never more relevant.

A Changing Retail Dynamic

20 years ago, retailers had all the power. Merchandise suppliers shipped goods to retailers, and it was the retailer who sold the goods. It was the retailer who had the relationship with the customer. That’s no longer the case.

Today, as much as 50 percent of sales for several major sporting goods apparel and footwear brands come through their own brick-and-mortar stores and various e-commerce channels. In many cases, the retailer and the supplier are in competition for the customer, so both sides are focused on delivering the best possible customer experience.

While suppliers have expanded their online presence and now have the ability to sell directly to the consumer, retailers have developed their own lines of private label products to offer customers a unique assortment. Retailers are also using drop shipping to sell to consumers without keeping inventory in stock. While e-commerce and new technology have given suppliers leverage they didn’t have 20 years ago, both sides realize how much they still need each other to be successful.

In 2020, RVCF represents retailers and merchandise suppliers. Everyone checks their egos and self-interest at the door as we seek to build alignment in improving business processes, developing best practices, and uniting behind solutions that benefit both sides of the trading partner relationship.

The Road Ahead

Neither retailers nor merchandise suppliers have the advantage in today’s retail landscape. The end consumer calls the shots. The end consumer dictates how goods are purchased and how orders are fulfilled. Terms and conditions are essentially written by the consumer. This is the reality that all stakeholders need to accept. The customer experience is king.

More and more dollars continue to shift online as e-commerce sales increased from $390 billion in 2016 to $517 billion in 2018. If you want to buy a shirt, you don’t have to go to a store and try it on. You can go to an app and snap a photo of yourself, which will tell the merchant your exact measurements so they can make you a custom shirt and have it at your doorstep in a day. With the data collected through website browsing, shopping behavior, mobile apps, and beacons, retailers and suppliers know more about their customers than ever.

Technology is obviously central to retail’s evolution, but those companies that invest in order to get the most out of their people, process, and technology will achieve the most success. That’s the role of RVCF – to provide knowledge and insights that support identified "best practices" throughout the entire value chain and to then facilitate collaboration between retailers and merchandise suppliers so they can adopt solutions that lead to more sales and higher profits.

As a merchandise supplier, if you can meet with a retailer at an RVCF Conference, negotiate a deduction down thousands of dollars and agree on a fix that will prevent that deduction from happening again, wouldn’t you call that conference a worthy investment? Imagine if you could do the same with multiple retailers at the same event. Similarly, if you could receive alerts about changes to retailer compliance requirements as they happen, which the Compliance Clearinghouse provides, doesn’t that make more sense than hiring someone to do the same thing?

These are examples of solutions that were developed based on input from our members. Even though we live in an age of text, chat, and other forms of digital communication, RVCF will continue to be an organization that believes in sitting down and having a conversation. Real progress is made through face-to-face communication. If you can’t sit down together, use video conferencing. Pick up the phone. Attend events and webinars. Ask questions and offer solutions.

When we started this organization, retailers knew two people from the supplier organization – the salesperson and the finance person who collected money. We believe people between the salesperson and finance person should be communicating with their counterparts. This is how you build alignment with technology, operations, supply chain, marketing, and other areas.

The past 20 years have been a rollercoaster ride. Given the current pace of change, we can’t possibly predict what the next 20 years will bring. But we can promise that our commitment to collaboration and overcoming retail industry challenges will never waiver. We’d like to thank our members, supporters, and staff – past and present – for your contributions to RVCF. Of course, we don’t necessarily consider our 20th anniversary a celebration of RVCF. It’s a celebration of collaboration.

 

 

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Fit Technology: The Future of Retail is Matching People to Product

Posted By RCVF Admin, Wednesday, December 11, 2019
Updated: Saturday, November 23, 2019

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Fit Technology: The Future of Retail is Matching People to Product

By Jessica Couch, Fit Technology Integration Expert and Founder of Luxor and Finch Consulting


What Is Fit

 

Fit is the most important issue consumers have with clothing right now. In fact, according to a survey conducted by Bodylabs, 58 percent of shoppers would buy more frequently if they could ensure a proper fit. Additionally,  85% of shoppers would purchase more if they could ensure a proper fit. A lack of understanding of fit is the main cause for returns, dead inventory, cart abandonment and the reason most people do not try new brands.

 In 2015 while obtaining my master’s at Cornell University, under the guise of Professor Susaan P. Ashdown, I conducted an in-person and online survey to determine the impact of fit on the purchase decision. Fit is so significant to the purchase decisions, shoppers can be categorized into personas based on their hierarchy of fit perception. These personas can then be used to develop UX/UI, in-person experiences and directive shopping techniques.

So why do companies still neglect to view fit technology integration as a competitive advantage? 

The issue lies in an understanding of what fit technology really is. To assume that fit technology is just body scanners and gimmicks is incorrect. Fit technology as we see it is the implementation of technology and best practices that reduce pain points caused by fit.  To better appreciate fit technology, we have to break it apart and understand the individual definitions. Fit, as we see it at Luxor and Finch, is the combination of both consumer measurements and preferences.

Technology, as defined by Webster's dictionary, is

A. the practical application of knowledge especially in a particular area

B. a capability given by the practical application of knowledge

C. a manner of accomplishing a task especially using technical processes, methods, or knowledge

D: the specialized aspects of a particular field of endeavor 

With this understanding we can then move forward with understanding what fit technology really is and how diverse solutions are. 

RENT the Runway’s chief technology officer and head of product Josh Builder mentioned in a recent article why they do not use fit technology ‘gimmicks” to rent clothing. But according to our definition of technology, they actually do. The user generated content feature on the website, consisting of women sharing their sizes, measurements and opinions of previously worn clothing, is a type of fit technology. It requires no hardware or complicated software but it is a process that helps to match people to product effectively. Fit technology can exist across the supply chain and in various forms. Implementation depends on the needs of the customers and the data (or lack thereof) being collected. The goal of all fit tech is the same, reduce pain points caused by fit and match people to products.

Why It Matters

Matching people to product should be the most important goal of every apparel business. Fit is a major factor in the matching process. Comprised of both measurements and preference, an understanding or misunderstanding of fit is often the leading cause for the $62B returns in the us annually.  67% of shoppers have reported that fit is the sole cause for returns. While returns are a big focus, and they should be, what is less known but equally problematic is the dead inventory issue. Every year dead inventory causes retailer $50B. Whether a result of poor placement, merchandising, planning or fit, it greatly hinders the ability of brands to successfully match people to product.

Current Issues in the Supply Chain 

Fit based practices help to create loyal shoppers. Sizing is a difficult issue because of traditional sizing practices. Generally, brands work with one fit model with a certain body type and market their products to the masses. Without directive shopping techniques, people are matched incorrectly to the wrong product. There are ways to avoid this. Techniques in the design room and during the fitting process can be implemented to help better match people to product.  Grading is also often problematic. Many designers and tech designers are not creating the right grading systems. Depending on the body tpe grading has to be adjusted parametrically. There are tools and techniques that can also assist with this issue. Catching fit issue in the design and development phase can help to reduce a lot of the pain points. However, once the garmen hits the sales floor, resolving the fit issue looks slightly different.

In-store Issues

In brick and mortar stores, the layout, merchandising and associates are key to creating an enhanced fit experience. Additionally, collecting consumer behavior data is also important when matching people to products. Technology such as RFID scanning, responsive mirrors and geo tagging can help to collect the right customer data and match people to product better. This is even more important for multi brand retailers. The information collected can then be used to assess shopper behavior in-depth and begin to bring to light the cause for returns and dead inventory, thus creating a better shopping experience. Brands such as Rebecca Minkoff have already begun to create in store experiences that are tech enabled, driven off consumer data and responsive to the needs of customers. Making it easier for customers to shop and discover products in store is extremely important but making it personal is most important. Personalization helps to drive sales. In a study conducted by Segment, researchers found that 44% of consumers said they would likely become repeat customers if their experience was personalized, 49% of surveyed shoppers purchased a product they didn’t originally intend to buy after receiving a personalized recommendation and 40% of u.s. consumers purchased more because their experience was personalized. Personalization and matching people to product go hand in hand.

Online Issues

Online, matching people to product is equally imperative. Whether through online mobile tools, imagery reflecting actual customers, user generated content, innovative merchandising or fit based copy and content, fit techniques and practices can help create higher conversions and lower returns, keeping customers loyal. Brands take a massive risks by not matching people to product successfully.  With all of the competing stores and brands popping up, losing a customer can have adverse consequences.  One bad experience not only loses that one customer, but everyone else in that customer available network. Multiplied across hundreds and even thousands of people spells out doomsday for brands and retailers.

What’s the Solution

There is no one all-encompassing fit solution, however there are solutions that work best depending on the problems that have been identified. In order to resolve the fit issues you have to understand current gaps in your business, what's hurting your bottom line,  what data is being collected, what data is needed, what part of your experience can be improved upon, customer behavior, and customer feedback. Deciding which fit based solution is best for your business depends on your current product offering and customer personas. While there are many solutions available, choosing the right one can make an impactful difference on your performance and the longevity of your brand.

Luxor and Finch helps brands and retailers implement the right technology to reduce the pain points caused by fit by analyzing their current practices, identifying fit related issues then remediating the issues through strategy and implementation.

 

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