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RVCF: We're Here for You

Posted By RCVF Admin, Monday, April 13, 2020
Updated: Monday, April 6, 2020

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RVCF: We're Here for You

By Susan Haupt, RVCF


In this unprecedented time of personal and professional upheaval, we are all facing the challenge to adapt.   Whether it’s a new working environment, seeking new approaches to old problems or the need to learn new skills – we find ourselves in a constant state change.  Throughout the chaos, the RVCF Team continues to work remotely as we have been doing for years.  We remain committed to support our membership and the industry as a whole to address the need for communication and collaboration, which is now more critical than ever.  We are here to provide Retailers, Merchandise Suppliers and Service Providers with the following services:
 


For Retailers

  • Collaborate with your peers in our Open Forum teleconferences. New sessions have been added to the calendar to address the need for more frequent updates.  Pre-registration is required, minutes are kept and distributed following the calls and are available on our website.
  • Communicate compliance and business process updates with your Merchandise Suppliers through our daily Compliance Clearinghouse e-mail alerts or address them as a group via webinar.  Our experienced event staff will market your session, process the registrations, conduct follow up and assist with hosting.
  • If supplemental IT support is needed, our website (rvcf.com) offers the ability for to post documents, updates and communicate with your suppliers within a private secure community.  Let our team handle the set up and onboarding and we’ll launch your custom branded “site within a site” in a matter of days.


For Merchandise Suppliers

  • The Compliance Clearinghouse team continues it’s monitoring functions and alerts are being sent daily.  Our recently launched Custom Monitoring solution offers the option to extend monitoring functions beyond our standard list of participants to provide total support of your compliance monitoring functions.
  • Our calendar of events has been expanded to include weekly Open Forum teleconferences through the end of April.  We are prepared to extend these weekly sessions further if needed.  
  • RVCF.com features Forum Boards where questions can be posted and insights provided for near real time responses.


For Service Providers

Although in-person events have been cancelled worldwide, the need to communicate your message remains critical.  RVCF offers opportunities to connect including virtual events, publication and advertising.  We have packaged our most popular options to create an “Enhanced Communication Package” to distribute your message through various channels. 

     
For All

  • If you have a position to fill, or are looking for your next opportunity let us know.  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.
  • Explore our Thought Leadership Store to download RVCF and sponsored content including survey results, whitepapers and other reference materials.
  • Take advantage of our Virtual Events (see current schedule blow) to learn more about topics of general interest.  Be sure to check our site for the latest additions to our Calendar of Events.


If you see a need that we are able to help you to address we would love to hear from you.  Contact
info@rvcf.com or any member of the RVCF Team.

 

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Collaborative Technology Solutions are Critical to Retail Fashion Growth and Success

Posted By RCVF Admin, Monday, April 13, 2020
Updated: Tuesday, April 7, 2020

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Collaborative Technology Solutions are Critical to Retail Fashion Growth and Success

By Nancy Finnegan, BlueCherry PLM, CGS, Inc.

 

Picture this…Social media is showing a spike in ruffles. You have just put in an order for dresses. Imagine if you could immediately alert your designer to pull up the dress, add a ruffle and send the revised design to your supplier all before they wake up in the morning – AND…get notified they received it including any price adjustments. You approve and are on track with a hot pick! That is the power of PLM done right.

In today’s world, teams work in different time zones, different currencies, different languages and have their own roles and responsibilities. There’s the line sheet to review for next season’s line, and there can be anywhere from 2 to 20+ people that need to be involved in the process. There are also various sales channels, some that are direct to consumer and others that are providing products to big box stores. Every sales channel needs to know what sizes are available and where the images are for the new denim collection are so that they can provide accurate information on inventory. All of this is happening at a rapid rate and to top it off fashion trends are being driven by social media influencers which can change product details at a frenzied pace.

Today’s retail fashion industry demands that teams be able to react quickly to trends across all the multiple channels and brands they are managing. The daily workload is far more complex than ever imagined, and for every communication, new questions and data requirements are needed. There are fabric changes, quality issues, questions and comments that are just a necessary part of bringing a design through the production process.

Today’s technology finally supports product lifecycle management (PLM) and can provide retailers vast amounts of fast-changing information and seize on opportunities for growing sales.  Another benefit is to be able to understand why products are being returned and make changes that can greatly improve a retailers’ bottom line.

What Is PLM?

Product Lifecycle Management (PLM) is the process and technology of taking products through the entire process from the initial range and assortment planning through to production. With a solid PLM process and strategy in place, fashion retailers and their supply chain partners can quickly share and update critical product information to keep the process moving correctly. This gives them greater transparency into business activities and eases communication of key information.

It is worth looking at all of the key details in the PLM process. PLM applies to the entire product lifecycle, from concept to consumer and fashion retailers can use PLM to simplify, organize, classify and control literally millions or billions of pieces of data across multiple stakeholders. Here are the details of just how many parts of the process there are and how PLM unifies them:

  • Planning – including financial, range and assortment plans
  • Design – including digital asset management, line lists, fit/grading and color palettes
  • Development – including sample tracking, construction, lab dips, costing, sourcing, licensing management and calendar management
  • Materials Management – including raw materials library/management, purchase orders, lab dips, color management, sample tracking, inventory management, material requirement, sustainability and bills of materials
  • Sourcing – including vendor management, vendor KPI’s, style management, purchase orders, UPC generation, SKU assignments, in-transit status and receiving
  • Production – including production tracking, quality control, compliance and final approvals


PLM clearly plays an all-encompassing role in the development process, but today there also must be focus on key technology aspects which contribute to the success of the business.  At the core of it, is configurable screens for the user community. We talk about teams collaborating but the reality is that each person needs to easily be able to access and input their key data points in the easiest way possible.  We all know that data entry is tedious and a “one size fits all” screen approach just cannot work. A streamlined vendor portal must be deployed in order to gain adoption externally to the retailers’ organization. And as we all have come to expect with modern technology configurable dashboards are a must.

PLM Solutions and key integration points

A solid place to start is with an integrated product lifecycle management solution with fashion-specific data fields that can be easily configured to suit the business process. When PLM is the system of record for product information, all data collected during design, development and sourcing can flow seamlessly into ERP, B2C and B2B systems when and where it’s needed. This allows for product data to be managed throughout the omnichannel lifecycle without a lot of redundant data entry, scanning or emails between colleagues and suppliers searching for information. Data remains consistent and centralized. It is also important to think about key integrations with designer tools such as Adobe Illustrator.

Use Cases and The Big Payoff

The fashion industry is littered with stories about poor adoption of technology. Even once a retailer goes live with a new system, the usage of manual spreadsheets can continue for weeks, months and sometimes indefinitely. But with a new generation of PLM in the market, it is important that retailers make another attempt at implementing this mission critical system.  Spring of 2020 has brought with it one of the most severe health crisis and business interruptions that we could have ever imagined.  So, typical metrics of saving 8 hours here and 4 hours there seem trite as we struggle to save businesses and jobs. However, if there is ever a time for pulling together it is now and there is no doubt that collaboration on a global scale will continue far into the future.

 

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Soon On-Time & In-Full will matter more than ever

Posted By RCVF Admin, Monday, April 13, 2020
Updated: Wednesday, April 8, 2020

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Soon On-Time & In-Full will matter more than ever

By Victor Engesser, RVCF


Once this global crisis is behind us retailers and their suppliers will work quickly to get back to normal (or as close to it as possible) and that will start with communication, collaboration and new commitments to each other. What we learned from the OTIF Impact Survey earlier this year is that many of the business processes retailers rely on to support purchase order management can be improved to support better OTIF supplier delivery performance. Starting with forecasting, and ending with the final revision to the order (via PO changes) retailers should be working to constantly improve accuracy, reduce volatility, and better align business processes between each of their supplier partners to optimize performance.

Likewise suppliers, both big and small, must invest in the people and systems required to support not just demanding retailers requirements but also to be able to take sales and forecasting data they receive to develop manufacturing plans that allow them to meet or exceed market expectations. Their ability to communicate accurately what they can, and cannot, supply and to relay this information early in the ordering process is critical to improving OTIF performance. 

 As if all of this was not challenging enough the return to "normal" will be especially complicated as attempts are made to restock and re-balance inventories. With capacities strained allocation decisions will be necessary, causing forecasts to be inflated and orders to become more (not less) volatile. As costs and terms are revisited relationships will be tested. Now more than ever relationship management moves to the front of the line in importance. How well trading partners work with each other will determine the slope of their recovery. 

At RVCF we continue to focus on best practices, industry initiatives and collaborative solutions that make it possible for retailers and suppliers to optimize supply chain operations. Towards this effort we invite you to join our Webinar on May 7th and we will take you through all the survey details regarding how OTIF performance is impacted by the most common order management business processes and provide you with our best thinking around how relationship management in this area can be improved.

 

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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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