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RVCF's 2019 "All About Retailer Compliance"

Posted By RCVF Admin, Friday, January 25, 2019

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RVCF's 2019 "All About Retailer Compliance"

The 2019 edition of RVCF's "All About Retailer Compliance" publication is now available.  We've combined retailer requirements with industry standards and decades of experience to develop this all encompassing training and reference resource that is a "go to" guide for anyone connected to compliance in the retail supply chain.  
 
Users will be able to quickly and easily:
  • locate standards and prioritize those needing special attention
  • decipher industry terms and acronyms
  • understand the order fulfillment process - step-by-step, what's important and why 
This 90-page guide features individual chapters dedicated to :
  • EDI
  • Purchase Orders
  • Direct to Consumer
  • Floor Ready
  • Packaging & Marking
  • Transportation
  • Accounts Payable
  • Returns
  • Vendor Compliance
This document is available at no cost to RVCF Members and for the nominal fee of $295.00 for non-members.   Download your copy today.

Tags:  retailers; retail compliance 

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Managing the Complexity of Ecommerce Returns

Posted By RCVF Admin, Sunday, January 20, 2019

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Managing the Complexity of Ecommerce Returns
by Scott Weiss, VP of Business Development, Port Logistics Group

As the growth of online shopping continues to rise, so has the volume of ecommerce returns, often referred to as reverse logistics. Did you know that almost 33 percent of all online purchases result in an item being returned, compared to just 9 percent of physical store sales, according to figures from Bloomberg?

 

The challenge is that reverse logistics is generally far more complex than forward logistics. At the same time, consumers are increasingly expecting a seamless experience when it comes to returns. In UPS’s Pulse of the Online shopper study, 89 percent of customers would not shop again at a retailer if their return experience was suboptimal. Simple and free returns are becoming the new standard. In that same study, 79 percent of consumers consider whether a retailer has free shipping when making a purchase. The cost of a return is one of the biggest stumbling blocks for many consumers, so eliminating it makes sense, even if it is expensive. 

 

For online retailers, efficiently managing the returns process is one of the most challenging and costly aspects of ecommerce. Omnichannel retailing brings new processes, including increased dropshipping, BOPIS (buy online, pick up in store), and BORIS (buy online, return in store), making the management of returns difficult when cross-channel inventories are subject to many business rules.

 

Challenges come in small packages

 

Online retailers need to keep costs down and preserve as much of the original revenue of the returned products they can. But returns don’t always involve sending goods back to inventory following inspection or repair. Items may be destined for disposal, destruction, or put into secondary markets for resale. Online retailers may leverage the services of a 3PL fulfillment provider for reverse logistics, or even a 3PL specialist in returns. A proficient 3PL will be able to manage the returns process according to your guidelines and ultimately protect your brand’s reputation.

 

Another potential problem is the volume of returns to the fulfillment center, distribution center (DC), or store on any given day isn’t known, unless the receiver is given advance notice. Returns typically come back within 30 days of sale, or even longer as return policies become more liberal and return time is extended to even 60 days or more.

 

Returns also require more labor to process. New business models for returns are also upping the service ante as third-party returns specialists enter the market. One is Happy Returns which operates “return bars” to enable in-person returns for online purchases at its select customer base of online retailers. Another model is retailer/online retailer partnerships, such as Kohl’s accepting returns on behalf of Amazon at select stores, which makes it easy for the consumer who doesn’t have to package the item but only has to show proof of purchase on Amazon.

 

Whether you manage returns in-house or outsource, here are best practices:

 

Processes and quality control. From the consumer’s perspective, they shouldn’t have to make a phone call to learn how to return an item. Information should be included with the order or at the online retailer’s website. It does the retailer and supplier a favor when the consumer can easily inform them why the product is being returned. Return forms aid this process as do pre-printed labels.

 

Once received, a key benchmark for an efficient returns process is to return the appropriate goods back into stock as soon as possible for resale. So too is planning the flow of returns in the DC or store, allowing plenty of space for returns processing. The returned item will require inspection of its condition and quality to determine if it can be returned to inventory, and may require light repairs.

 

Value-added services and training. Apparel, electronics and shoes are some of the most returned items for direct-to-consumer ecommerce, according to returns optimization company, Optoro. To return to stock, apparel, for example, requires a close inspection under good lighting, refolding and relabeling. Goods may need steam cleaning, sewing or other repair which involves value-added services.

 

Training staff in returns processing is essential. Much of the knowledge for processing returns is specific to the product or brand, with returns specialists becoming very proficient in their craft. Knowledge is often handed down as tribal (undocumented) knowledge. It is always better to err on the side of documentation.

 

KPIs. Key performance indicators (KPIs) can be kept basic within your company or with your 3PL. Fulfillment processing rates for ecommerce orders are typically same-day or within 24 hours, including dropship orders a supplier fills on behalf of the retailer. A typical KPI for ecommerce returns is processing the item within 72 hours after the item is received, tracked as “return cycle time.” Hitting this mark 95 percent of the time is a reasonable aim.

 

Routing guides. With the multiple channels of omnichannel complicating returns, determining which party in the supply chain will handle each return may be subject to change. Developing a vendor routing guide is a great updatable resource. Use it to document which entity will do what processing, whether by type of product or channel, and so forth. For example, a dropshipped apparel order sent to the consumer on behalf of the retailer by the vendor may likely get returned to the retailer’s facility, and not the vendor or their 3PL, in part to maintain the brand image of the retailer. It’s also important to note consumer instructions for returns which must be included with the outbound order.

 

Communication checkpoints

 

In all aspects of the returns process, close communication with participating parties for each key event in the returns process is essential. From the systems perspective, communication should be reflected in alerts and notifications that involve parcel or shipping systems, warehouse management systems (WMS), and order management systems (OMS).

 

The key communication-alerting checkpoints are receiver and consumer confirmations. Once the return is scanned in at the parcel carrier or drop-off location, the receiver is alerted, and can thus better plan for disposition. Consumers want an easy return process. Alert them that the seller has received the item, which is enabled by the initial scan when the consumer drops off their return. Many leading ecommerce companies are providing electronic confirmations to the consumer that their credit card has been credited; the retailer or seller generally provides these confirmations.

 

The expense of handling ecommerce returns are high and the pitfalls are many. Many of these returns practices can reduce the cost of returns processing for online retailers while enhancing the consumer experience and contributing to a positive brand experience. Given the growth of ecommerce and returns, there is a business case for allocating resources into building a strong reverse logistics capability. 

 

Tags:  e-commerce  Inventory Management  KPIs  Omni-Channel  Returns 

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How to Talk About Blockchain at Parties

Posted By RCVF Admin, Monday, December 10, 2018

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How to Talk About Blockchain at Parties
By Kirk White, Yusen Logistics


2018 is, among other things, the year of Blockchain.  And for all the buzz and hype, many still don’t know exactly what it does and what it will bring to the world of supply chain.  It’s very easy to say,  “oh…it’s going to revolutionize the Supply Chain by streamlining documentation, removing non-value-added steps to processes,  speeding up payments, eliminating errors or miscommunications, providing better scrutiny and validation to our factories and, not for nothing, making everything just a little safer…and I heard it has vitamin C and electrolytes to boot?”  Okay that last part is not verifiable….but not any more NOT verifiable than anything else. THAT is the rub.  Right now a whole bunch of blockchain is just potential.  It’s going to become concrete faster than you can imagine but as of this moment, since we quoted the Terminator so much so far,  “the future is not set…there is no fate but what we make for ourselves”.  

Anywhoo…As the season wraps up, many of our loyal readers will be going to various gatherings and holiday parties…and invariably, if your parties are like our parties, the subject of Blockchain will come up.  And you may be tempted to make a quick dash for the snack table…but fear not…as our gift to you, please see our handy dandy guide to talking about Blockchain in any social situation (you’re welcome):

Things you can say when someone asks you about your opinion on Blockchain: 

“This is  nascent technology”

Nobody has cracked this…YET. But a lot of folks are trying.  Think back to the early days (1995) of the ol’ internet. Think of the companies that got on that train early…think about those who didn’t.  But again,  NO ONE HAS CRACKED IT YET…mostly because…

“the application of using it for supply chain on a global scale doesn’t exist”

This won’t be able to be said for long because there are a bunch of pilot programs in the works as companies fight to be the “Facebook” of Blockchain.  The main issue is that there is nothing standard…no standard connection and the supply chain industry already has multiple means of getting and transferring data…some use EDI, some use inhouse systems, some just email things to you.  Getting this many disparate individual operators to suddenly agree on the next big ONE platform of communication is not going to be easy. People fear change. People think if it ain’t broke, don’t fix it.  People like to do things THEIR way.  And we haven’t even TOUCHED the learning curve!  However, it is inevitable that there will be a blockchain/supplychain revolution soon, because…

“A lot of companies are taking this seriously”

Once again, think back to 1995ish, those of you who were not in grade school or diapers then!  This whole “internet thing” was a novelty….email was a hoot, yes, but nothing to worry about, until it wasn’t a novelty… and there was something to worry about.  Think about how many business failed because they were late to the online game.  Borders Bookstore went out of business in 2011 and the industry mostly attributes this to their inability to get with the online program. They doubled down on inventory (esp CDs and DVDs) just at the moment Ecommerce and electronic distribution of media was becoming ubiquitous. They even outsourced their ecommerce to Amazon…and a chill was felt around the room.  Many of the big companies do not want a similar fate with regards to Blockchain. IBM/Maersk is leading the supply chain side of Blockchain with a joint venture called Tradelens. There is not much info available yet, a visit to their website (www.tradelens.com) yields a lot of high level marketing materials but not much else at this point.  They have an early adopter program that, as of this time, features @ 94 participants and are looking for a general release / expansion in 2019 and to begin adding an A.I. component by 2020.  With 154 million+ events moving through their system, they are an early lead in the race.  The significant pushback seems to be coming from other carriers who believe the system may prioritize Maersk to clients.

Not to be outdone, Microsoft has teamed up with Adents (www.adents.com/adents-novatrack )to create NovaTrack. Initially created for the pharmaceutical industry to track and trace product for safety, it has quickly expanded into a robust system that is adding  A.I., serialization capability, and Internet of Things components early in the process.    By teaming up with a powerful partner in Microsoft, a company whose products are more than likely already used in many potential clients’ computers, they may have an advantage to a completely new platform.  This might actually be a good time to ask…

“Would YOU like to be an innovator in this?”

Never hurts to ask…you are at a party.  What are the other people hearing, seeing, thinking about using.  A lot of this is going to live and die on the buzz of early adopters and pioneers.  In fact, many people will probably wait to enter the blockchain world until there is a clear cut favorite.  It’s like the Academy Awards (the Oscars)…the Best Picture is chosen by every member of the Academy. However, many members…a LOT of members…don’t actually go out and see all the movies up for best picture. They usually vote based on all the articles that come out picking the favorite films; the “who should win” so early hype and buzz is uber important for film makers.  This is a similar thing to what is happening now, IBM/Maersk, Microsoft/Adent and Amazon (more on them in a moment)…and not for nothing, all the other dark horses we’ve not heard of yet…are all working to be the word buzzing on everyone’s lips. And speaking of dark horses…  

“there is still a chance for an indie solution”

Adding a giant monkey into the wrench, Amazon has thrown their hat into the ring with AWS (Amazon Web Services) Amazon managed blockchain. They have a HIGHLY SCALABLE platform called Quantum Ledger Database (QLDB for short:  https://aws.amazon.com/qldb/ )  and their aim is to provide the ability for multiple users to create their own proprietary APIs (application program interface) using the Amazon blockchain and therefore remove the need for a central blockchain system….instead of ONE system that everyone adopts, companies could build their own blockchain enabled systems and use them as a differentiator/revenue generator.  Will this be a game changer or simply muddy the field so to speak?  Time will tell, but QLDB does seem to level the aforementioned muddy playing field a bit as organizations with a robust and agile IT dept could use the AWS blockchain fabric with their own innovative API and revolutionize the industry. For the moment the sky is wide open and one may say that a small company doesn’t have a chance against IBM or Microsoft but then again…nobody thought The Hurt Locker would beat Avatar for Best Picture now did they?

And since we’re talking…what have YOU heard?  Be sure to leave in the comments below any early “buzz” you have picked up in your travels. 

Sources:

http://www.nsweek.com/wp-content/uploads/2018/10/Luca-Amato_ibm.pdf

https://whichblockchain.com/news/microsoft-and-ardents-partner-in-blockchain-project-for-product-tracking-platform/

Kirk White is a corporate creative and a supply chain futurist. He has worked in every division of Yusen Logistics. After a brief stint in Transportation, he transferred to Corporate, where he coordinated Yusen’s Employee Empowered Kaizen system and served as a Specialist for the Business Process Re-engineering group, after which he moved to the Warehouse division to serve as the East Coast Quality Manger before ultimately joining the International division, where he hopes to use his Quality knowledge base to prove an asset to OCM.

 

 

Tags:  Blockchain  Supply Chain  supply chain systems  technology 

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The Essentials of Dropshipping: Wish List or Reality for the Supplier?

Posted By RCVF Admin, Monday, December 10, 2018

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The Essentials of Dropshipping:  Wish List or Reality for the Supplier?
by Scott Weiss, VP of Business Development, Port Logistics Group

 

In the growing ecommerce marketplace, dropshipping is on the rise. Dropshipping is a form of order fulfillment where the supplier handles shipping, and ships directly to the consumer on behalf of the retailer. In addition to freeing up capacity at their distribution center (DC), many big box retailers use the dropshipping capabilities of select suppliers to offer products online they normally wouldn’t carry in their stores.  


Dropshipping can be a win-win for both the retailer and the supplier. Retailers of all sizes can expand their product lines online with additional low overhead products while freeing up space and labor from their distribution facilities. For suppliers, adding dropshipping capabilities opens up new channels and markets, and when done efficiently, can be a significant long-term boost to sales while making their relationship with the retailer even closer.


Online retail sales, while still less than 15 percent of all U.S. retail sales, are growing annually, according to analysis of government statistics by Internet Retailer. According to the National Retail Federation, holiday sales alone for November and December 2018 are estimated to exceed $720 billion.


There are great opportunities in dropshipping as online shoppers rate product assortment an important factor during the online search process. Whether you are a big box retailer or small internet retailer, dropshipping allows retailers to compete with Amazon by offering as many SKUs as possible. The challenge is many large importers and other manufacturer-suppliers don’t have the capabilities to offer dropshipping to their retailer customers.


For those that take on dropshipping, there are pros and cons to doing dropshipping in-house versus outsourcing to a 3PL. Whether you keep your dropshipping in-house or outsource to a 3PL, here are key factors to consider when adding dropshipping capabilities:


Systems. Systems, processes and software are the biggest success factors. As a supplier, you can easily manage a truckload of one SKU/500 cartons to a large retailer customer as a single order, but could you handle 500 orders of 500 individual items going to 500 consignees? Having the right system to effectively manage a high SKU count and high number of product touchpoints requires robust, scalable IT systems.


It’s critical to get the order from the retailer into the supplier’s system electronically. Orders typically come to the supplier from the retailer in EDI format. Suppliers should have basic EDI capabilities and preferably an ERP (enterprise resource planning) system.

 

When the supplier dropships in-house, they can keep their costs down but as orders and SKUs scale, it may require a greater investment in IT. When the supplier outsources to a 3PL, they can scale quickly and capitalize on the 3PL’s resources. If you are looking to outsource your dropshipping to a 3PL, ask about their dropshipping experience and system capabilities for ecommerce. EDI capabilities are a given and so is a WMS (warehouse management system). Some may have integrated OMS (order management systems) and LMS (labor management systems) which will allow them to scale with the peaks and valleys of your ecommerce orders.


Consumer expectations for service are evolving as Amazon and others continue to raise the bar. Transparency is the cost of entry. It’s critical for direct-to-consumer brands and retailers to present a unified front with the supplier. As the supplier, you provide ongoing order and shipment information to the retailer, and the retailer provides it to the consumer-consignee. For dropshipping orders, this means if a consumer receives the order late or not at all, the retailer must be able to provide answers online or via an 800 number. Real-time tracking, or at least shipping notifications, are standard today and these should appear to come from the retailer. 


SLAs and communication. Hiring a third party adds complexity to the picture. It nearly goes without saying if you are outsourcing your dropshipping or other retail fulfillment to a 3PL, frequent communication and having SLAs (Service Level Agreements) in place is essential. Basic metrics to monitor include order fill rates, and maintaining minimum and maximum average number of orders per day. Conducting weekly conference calls with your 3PL is a great way to manage the process. In the calls, review upcoming expected orders, service issues and performance goals.


The next set of considerations are essential capabilities you want to make sure your warehouse or 3PL has in order to handle dropship orders as efficiently and cost-effective as possible:


Facility layout/slotting. Slotting is the process of organizing how items are physically positioned for order picking. Your warehouse or DC, or that of the 3PL, needs to be configured efficiently to process small orders and singles picking. Place products optimally to reduce labor and steps in the warehouse. What SKUs are likely to be ordered with other SKUs? Place those products in close proximity.


Batch picking. Like slotting, batch picking is another capability that goes a long way in the warehouse to gain efficiencies and reduce labor. Picking like items across orders in batches enables the supplier or 3PL to fill more than one order simultaneously. This means if you have 500 ecommerce orders for the day of single SKUs, you can optimize labor by bulk picking the product from inventory at the same time versus making 500 different trips to the same spot.

 

Customization. As a requirement for doing business with the retailer, ecommerce orders often require customizing to the retailer’s specifications. This may include customized packing slips,  packaging materials such as branded tissue paper, or inserting marketing materials or specific product instructions. Be prepared to offer these services to the online retailer as their vendor compliance programs may require it, otherwise chargebacks and worse consequences may result.


On the upside, advantages to hiring a 3PL specialist in dropshipping include bringing the supplier up to par with Amazon-like standards. One example is positioning inventory in multiple geographic locations. A supplier with just one warehouse on the West Coast would not be able to offer today’s nearly standard two-day shipping to consumers nationwide from their single DC, but if they use a large 3PL with multiple DCs around the country, they can provide two-day shipping nationwide.


Likewise, small- to medium-sized suppliers may be able to leverage the transportation purchasing power of their 3PL. In the case of shipping costs with the parcel carriers, the supplier may be able to ship to the consignee pre-paid via their 3PL’s account and pay a reduced rate that’s between the negotiated discount rate of the 3PL and the rate they would pay the parcel carrier as a small-volume customer.


In conclusion, all of these are factors are key when considering adding dropshipping to your wheelhouse. Whether you keep dropshipping in-house or outsource it, having a robust returns program is essential. In the next article, we will explore the topic of reverse logistics.

 

 

 

 

Tags:  dropship  dropshipping  logistics  order fulfillment  shipping 

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RVCF Is Offering a Holiday Special for New Supplier Members

Posted By RCVF Admin, Thursday, December 6, 2018

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RVCF Is Offering a Holiday Special for New Supplier Members
December RVCF Link: From Desk of Kim Zablocky

We’re heading down the home stretch of what has been a fantastic holiday season in retail. Shoppers feel good about the economy, sales were up on Black Friday and throughout the holiday weekend, and the retail industry is poised for a strong finish. If you’re a CFO or COO for a merchandise supplier organization, you probably have a big smile on your face right about now.

Then your retailer customers remit outstanding invoices and you notice a high number of deductions. Shipments didn’t comply with retailer requirements. Some arrived early or late to the retailer distribution center. Others were unannounced because of ASN issues.

Meanwhile, the finance department is fuming as they try to figure out how tens of thousands of dollars disappeared. Can you really afford to lose 1 to 2 percent of gross sales due to shipping errors?

There’s a solution to this accounts receivable dilution. It’s called retailer-supplier collaboration. And it begins with RVCF membership. Here’s how RVCF brings trading partners and peers together to solve problems and increase profits.

Two National Conferences

RVCF’s Annual Spring and Fall Conferences drive collaboration by providing a platform for learning about important industry issues, best practices and, most importantly, one-on-one meetings with retailer customers. Supplier members have told us that the access we provide to multiple retailers in a single trip and the ability to address specific issues during each meeting are worth the cost alone.

Supplier Open Forum Calls

Each month, merchandise supplier members have the opportunity to help and learn from peers who are dealing with or have already overcome similar issues with retailers.

RVCF Compliance Clearinghouse

When you miss changes to retailer requirements, orders continue to ship incorrectly, chargebacks mount, revenues are lost, and the trading partner relationship suffers. The RVCF team monitors the compliance guides of more than 100 retailers so you don’t have to devote resources to this tedious process. We then alert your order-to-cash team of changes within 24 hours so you can proactively address the issue and contact your retailer customer if necessary to implement an suitable solution.

Help Desk Support

Struggling with a problem that your in-house team can’t seem to solve? RVCF members can always reach out to the RVCF team’s industry veterans for help.

Workshops and Webinars

In addition to our annual Spring and Fall Conferences, RVCF offers workshops and webinars to educate your team about best practices, the latest research and trends, and how to adapt to a quickly changing retail landscape.

All About Retail Compliance

All supplier members receive a free issue of RVCF’s All About Retail Compliance, a comprehensive reference for anyone who works in compliance in the retail supply chain. This handbook includes terminology, definitions and best practices that reflect the latest industry trends and technology. In addition to serving as a value source of information, All About Retail Compliance can be used as a training tool.

Research Participation

RVCF periodically conducts surveys and studies that shed light on important issues, such as compliance management, drop ship, fill rate, investigating and reconciling deduction claims, value-added services and more. By sharing your experiences, insights, concerns and frustrations, you can push for changes that benefit your organization and the entire supplier community.

Our Holiday Special for New Supplier Members

If you’ve never been a member of RVCF or haven’t been a member since 2014, you can take advantage of 20 percent savings on regular membership pricing. Your company must join on or before January 15, 2019, which happens to be our 19th year in existence.

I’m happy to say, and I’m sure RVCF members will concur, that we have saved suppliers millions of dollars over the years by creating opportunities for collaboration with retailer customers, peers and service providers.

RVCF membership provides your order-to-cash team with the tools they need to speed goods to market and get products in the hands of consumers in an error-free, cost-effective manner. By joining RVCF, you’ll demonstrate to retailers that you’re committed to order fulfillment excellence and improving the trading partner relationship.

Again, 20 percent off RVCF membership for new supplier members is only available through January 15, 2019. For more information, contact Susan Haupt, RVCF Vice President of Operations and Member Services, at 646-442-3433 or shaupt@rvcf.com.

 

 

Tags:  RVCF Membership  Suppliers 

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Aligning eCommerce, Trade and Corporate Marketing

Posted By RCVF Admin, Thursday, November 29, 2018

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Aligning eCommerce, Trade and Corporate Marketing

by Rob Hand, Lead, Trade Promotion, Capgemini

To win the battle for consumer engagement in the age of digital transformation, it takes a unified strategy across a multi-front campaign.  CPG companies traditionally fail in this effort, wasting billions of dollars in promotion funds, advertising and sales opportunities.  How to overcome this failure is a growing question asked by sales, marketing and financial executives throughout the world.

Over the last decade, we have seen so many retail companies close stores or shutter completely.  On the one hand, it is sad to see great retail institutions like Toys R Us, The Limited, Radio Shack and A&P Stores drop completely off the marketplace.  Retailers that have recently announced huge numbers of store closures like Mattress Firm, Best Buy, JC Penney and even venerable old Macy’s are pulling out all the stops to keep relevant against the onslaught of online ecommerce.  

So, what is the cause of this hockey stick curve graphic showing the number of stores that are going away?  Amazon?  Alibaba?  E-Bay?

No.  Those are some seriously effective companies that figured out how to offer something unique and different, and please the consumer through the execution of their own strategy and operations.

The answer?

It’s the consumer. 

Today’s consumers, and especially the millennial or generation Z, are power players. They know what they want and are more knowledgeable about a product than most of their Baby Boomer parents and grandparents because they research.  In the blink of an eye, they have their mobile phones up, a search conducted, a site selected and BANG – they’re already seeing a world of knowledge that gives them the insights about the product. They can see deals, compare, and make their minds up in a heartbeat – all while listening to their favorite anime or tune.

Online, ecommerce players like Amazon and Alibaba came up with great ideas.  They figured out how to do one simple thing – please the consumer by knowing what they want and delivering it to them quickly and inexpensively.  Retailers grew complacent, expanded quickly, traded good old customer service for high turnover, minimum training and an expansion program that taxed every resource they had.  Moreover, they began to realize that the decades of pressure put on their manufacturer suppliers for higher trade funds had virtually ended the annual 1 – 3% increases they came to expect in their trade promotion spending.  The margins were as low as they could go, and there was no room for negotiation or collaboration.

For the manufacturer, the tightrope walk across Niagara Falls was well underway.  While the true revenue generation allegiance was still to the retailer, they had to play the ecommerce side of the channel themselves to cover their own revenue and profit growth.  The marketing organizations began to grow their competence in consumer engagement, generating huge data lakes of consumer profile data and integrating sophisticated marketing response analyses, campaign testing intelligence and building a powerful pool of insights about consumer demand, shopping, and purchasing.

In addition, also under the banner of corporate marketing, customer service organizations have flourished, capturing important information about price impact, how their products were used, how recipes are created and a daily deluge of social sentiment data about every aspect of the product, company, and strategy. This data is used to drive product assortment, category management, advertising content, coupon and discount effectiveness, and demographics.

Marketing is a virtual and actual storehouse of consumer intelligence.

Trade promotion?  Not so much.

Trade promotion planning is still being done in a total vacuum of all this intense consumer data. Key account managers and sales reps who are responsible for generating promotion plans have basically two types of data they can call on to help them understand the best timing, tactics (activities), products, markets and retailers to select for the promotion plans.  Those two data elements include historical trade promotion performance data (if it is maintained) and, in most cases, some downstream data including point-of-sale (POS) and syndicated (IRI/Nielsen) consumption data.    

Even the tier one CPG companies were slow to recognize the true power of trade promotion, and even slower to understand the critical advantage of sophisticated promotion optimization technology.  As a percentage of gross revenues, global CPG companies spend an average of 27% on trade promotion compared to literally half that amount in direct-to-consumer marketing; and it has been this way since the early 1970’s. 

Historically, trade promotion “success” metrics have been, and continue to be measured by the volume, revenue and profit margin achieved at the sell-in.  Very little attention has been paid to the actual results of the promotion at the cash register. 

By most analysts’ measurements, trade promotion spending fails to achieve a positive ROI more than one-third of the time.  Most CPG executives blame two primary causal factors – poor promotion planning and out-of-stock conditions at the retail shelf.  These are key reasons for failure; but as we begin to see the results from the massive investments into “big data” initiatives, two other glaring problems come into focus.

The first problem is bad data. “Garbage in, garbage out” has been a phrase referring to the impact inaccurate or missing data has on any computation, and it especially applies when you consider that, for most of promotion planning, the primary basis for performing “what-if” or even sophisticated promotion optimization scenario models is historical trade promotion performance, which we know is more than a third failure.  How, then, is using that mix of data to base projected performance going to work for you?  Data problems also arise in retailer point-of-sale data, syndicated data and inaccurate baselines derived from so-called “demand planning” tools found in supply chain management solutions.

The second problem is a lack of collaborative planning and sharing of data between internal marketing and sales organizations. All the data mentioned above that is available to the marketing organization could not only positively impact the quality of the trade promotion planning, but it can also help to align both the trade promotions and the array of direct-to-consumer promotions done in ecommerce, national advertising, coupons and preprinted inserts to daily newspapers.  It is nothing more than a shame that these two organizations have had that “Chinese wall” between them that has been solidified both politically and culturally over the years. What is needed is a major market-shaping force that brings these two groups together.

And, that would be the consumer.

We are now seeing a movement – albeit ever so slowly – in the direction of consolidating and aligning trade promotion and consumer marketing data.  Promotions are continuing to be planned independently by each group; however, technology is beginning to make this happen.  Will it overcome the political hurdles of decades of non-collaboration?  We’ll see.

The problem is not only political but systemic.  What we have in most CPG companies is an end-to-end system of functional applications that are neither integrated nor aligned. This might be due to the years of application changes, business unit-driven solution acquisitions and so on; but if you notice the dotted red lines tell the story – failure to integrate key functions including trade promotion planning, retail execution and marketing with virtually no real cross-functional integration to a single data source.

This is the real problem. 

In today’s digital environment, the consumer demand signals are more plentiful and available than ever before. Being the second largest line item in a CPG company financials, trade promotion naturally commands a level of respect and focus to generate the highest return possible.  But without the combined intelligence and insights this data provides, it is far more difficult to not only create precise and trustworthy promotion plans, but to increase the real ROI achievement from them. Too much money has been wasted in promotions that have been executed out of synch or worse, in direct conflict. 

For example, last year in a key week leading into the Independence Day promotion, a major salty snack company ran a trade promotion featuring a deal where if you bought three bags of chips, you got a discount to $1.89 per bag.  At the same time, the ecommerce marketing team ran a coupon that required only TWO bags purchased to get a discounted per bag rate of $1.49 each!  Today, when consumers become confused, they move on – they don’t buy, and they remember.  That is far too much to lose given the huge spending levels of trade promotion and consumer marketing today. 

The answer is not simple, but it is attainable. The data identified above must be integrated across the entire functional landscape.  This will ensure everyone is working with a consistent data set that is clean, harmonized, and aligned.

Unification and alignment of trade promotion and consumer marketing begins and ends with a consolidated visibility (represented by the light blue areas above) to all data from which the right insights needed to drive the consumer engagement and revenue generation.

It is time to knock down the walls that exist between sales, responsible for trade spend performance, and corporate marketing, responsible for driving consumer engagement.  We have the technology and the marketplace mandates to get it done now.  Think of the benefit of reducing that 37% failure rate and adding another 10% of sales crossing the checkout scanners.

 

Tags:  corporate marketing  ecommerce  trade 

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Your 2019 Roadmap for Global e-Invoicing & VAT Compliance

Posted By RCVF Admin, Thursday, November 29, 2018

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Your 2019 Roadmap for Global e-Invoicing & VAT Compliance

by Robert Gallo, Commercial Manager USA, Edicom

For companies selling abroad, here's important information regarding e-invoicing.

2019 presents several requirements to comply with regarding e-Invoicing, VAT returns and e-Procurement. In today’s market, where businesses act as suppliers or customers globally, challenges arise from local particularities and national legislations they must adapt to.

B2G and B2B e-Invoicing in the European Scope

April 18, 2019 is the definitive deadline for European Union members to adopt, publish and apply the provisions necessary to comply with Directive 2014/55/EU. As of that date, all European public administrations must be able to accept invoices in electronic format from their suppliers using one of the two approved syntaxes: UNO/CEFACT XML or UBL.

Italy: From January 01, 2019, e-Invoicing will be mandatory between private companies (B2B/B2C), both for issuance and reception. Businesses will now be required to send and receive their invoices through the national SdI (Sistema di Interscambio) platform and in the XML.

Portugal. From January 01, 2019, e-Invoicing will be compulsory with the Portuguese Public Administration. In addition, common standards already approved by the European Union must be used.

Poland. The Polish government is working on a central e-Invoicing platform (PeF) similar to that up and running in countries such as Spain or France. Invoices will be sent to the public administrations through this platform in PEPPOL format and using PEPPOL Access Points.

Sweden. From April 2019, B2G e-Invoicing will be mandatory. Public Administrations will only accept electronic invoices, preferably using the PEPPOL format. Nevertheless, its national format Svefaktura will also be accepted. As of November 2019, all public administrations must be registered with PEPPOL and will be required to receive e-Invoicing.

Norway. From January 1st, 2019 the new standard of EHF Invoice and Credit Note 3.0 will be mandatory in e-Invoicing in B2G. The standard is built upon PEPPOL BIS with the goal to implement EU Directive 2014/55/EU in Norway.

VAT Compliance in the European scope

In Spain, the Immediate Information Sharing (SII) system for electronic VAT bookkeeping presents new features in the Canary Isles. On January 1, 2019, the new bookkeeping system for the General Indirect Canary Tax (IGIC) comes into force, based on the Immediate Information Sharing (SII) system.

United Kingdom Making Tax Digital (MTD). The United Kingdom is working to improve the electronic VAT return system to make it more effective, efficient and easier for taxpayers. From April 1, 2019, companies that exceed the amount of 85,000 pounds in VAT invoiced must, on the one hand, be able to archive their VAT books in digital format and, on the other hand, send them to HMRC via API electronically.

In Latin America, regarding VAT and e-Invoicing

Colombia. January 01, 2019. From the start of the year, all taxpayers liable for VAT will be required to comply with e-Invoicing in Colombia. This is a decisive step in the phased calendar to establish electronic invoicing in the country. The Colombian government estimates that some 500,000 taxpayers will be billing this way.

Argentina: As of April 2019, e-Invoicing in Argentina will be mandatory for all categories of taxpayers. The AFIP has issued the following schedule:

·       D: December 1

·       C: February 1, 2019

·       B: March 1, 2019

·       A: April 1, 2019

Guatemala. e-Invoicing in Guatemala is gearing up for gradual adoption of the new FEL model from 2019. The Superintendency of Tax Administration (SAT) of Guatemala will define, progressively, the taxpayer segments and the terms for their incorporation into the FEL regime, by issuing administrative provisions, which will be duly notified to them.

Panama. Panama continues with the voluntary period of adoption of e-Invoicing, pending the legislation.

Paraguay. Paraguay is getting ready to start up its e-Invoicing rollout project in the country. After the pilot project carried out in 2018 with 14 companies, the SET will now begin the period of controlled voluntary adhesion.

Contact us. Edicom can help you with any of your international projects, with the solution that best suits your needs and in guaranteed compliance with national and local laws.

 

Tags:  e-invoicing  e-procurement  Global  international  VAT Compliance 

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Our Third Direct Ship Service Provider Survey is going out in January!

Posted By RCVF Admin, Thursday, November 29, 2018

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Our Third Direct Ship Service Provider Survey is going out in January!

by RVCF

Be on the lookout, RVCF will be conducting a follow up survey in January to assess the most recent performance of Direct Ship Service Providers and to identify areas for better collaboration between retailers, suppliers, and the many third party direct ship service providers they work with. Over the last two years RVCF has surveyed to benchmark how these relationships are performing for retailers and suppliers.    Our most recent white paper reflecting these findings, entitled "The State of Drop Shipping Compliance",  is available for download at no cost.
 

Tags:  Direct Ship Service Provider Survey  Survey  The State of Drop Shipping Compliance  White Paper 

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California Proposition 65 Compliance for Retailers and Their Supply Chain Partners: Are You Up-to-Date on the Revised Warning Requirements?

Posted By RCVF Admin, Saturday, November 24, 2018

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California Proposition 65 Compliance for Retailers and Their Supply Chain Partners: Are You Up-to-Date on the Revised Warning Requirements?

by Melissa Proctor (Miller Proctor Law PLLC) 

Proposition 65 was adopted by the state of California as part of the Safe Drinking Water and Toxic Enforcement Act of 1986.  The law prohibits certain chemical discharges into California drinking water, requires warnings about chemicals in certain workplace settings, and requires companies to provide clear and reasonable warnings on certain products. Although Proposition 65 is very well known in California, many companies located outside of California are still not aware of the state law’s broad reach and potential for liability. The law prohibits companies (regardless of whether they are located in California or elsewhere) from knowingly or intentionally selling a product in California that could expose consumers there to a chemical that is identified on the Proposition 65 List of Chemicals—those that are known to cause cancer or reproductive harm.  This mandate applies to all companies in the supply chain of the products, from raw material suppliers, manufacturers, distributors and retailers.  There are a few exemptions from this broad prohibition, however. For example, the Proposition prohibition on products does not extend to, among other, government agencies and utilities, companies that have ten (10) employees or less, and entities that use chemicals but their exposures do not pose any significant risks of cancer or reproductive harm.

Proposition 65’s List of Chemicals currently contains over 900  naturally occurring and synthetic chemicals, and new chemicals are added yearly. If a product that is sold in California contains a listed chemical, a consumer product warning may be required. However, some chemicals have an established daily exposure level (i.e., safe harbor level). Safe harbor levels have been established for roughly 300 products. Consumer product warnings are not required if a product contains a listed chemical with an exposure level below the specified safe harbor level. The Proposition 65 list of chemicals can be found on the website of CA's Office of Environmental Health Hazard Assessment or OEHHA.[1]

In August 2016, the California legislature revised the Proposition 65 mandates –those new requirements took effect on August 30, 2018.  As part of the revision, the legislature clarified the roles and responsibilities of product supply chain partners and held that it is the manufacturer, distributor, importer and supplier that is required to take steps to comply with the law. The primary responsibility for providing Proposition 65 product warnings falls on the manufacturers, producers, packagers, importers, suppliers and/or distributors. Proposition 65 generally provides manufacturers (and others in the supply chain) with 2 options for compliance with the warning requirements. They can either affix an appropriate warning to the product, or they can provide written notice to the retailer regarding the required warning for the product and provide the actual warning materials that will be used.

The retailer must issue an acknowledgment that it received the notice and materials, and is thereafter responsible for placement and maintenance of the warning materials they have received.  If the retailer fails to post the warning or obscures it, only then will liability fall on the retailer for failing to warn consumers. However, retailers will retain primary responsibility for providing a warning when they sell a product under its own brand or trademark owned or licensed by the retailer or an affiliated entity, or if the retailer adds the listed chemical to the product.

New warning language requirements also took effect on August 30, 2018. Previously, the product warnings were informative only and many companies adopted a compliance strategy whereby they labeled and marked everything with a Proposition 65 warning—even when they did not know whether the products actually contained any listed chemicals or not.  These warnings were found to no longer be effective, and the California legislature decided to make the warnings more useful. The new warning requirement applies to products that were made or manufactured on or after August 31, 2018.  So, if there are products currently sitting on store shelves that contain the old Proposition 65 warning language, they can continue to be sold as long as the original warning was compliant with the previous rules.

The new warning format for products that contain listed chemicals that cause cancer requires the placement of a black and yellow (or black and white) triangle containing an exclamation point. The triangle symbol can be downloaded directly from the OEHHA’s website. The symbol must be followed by the following legend:

WARNING: This product can expose you to chemicals including lead which is known to the State of California to cause cancer. For more information, go to www.P65Warnings.ca.gov.


As shown above, the warning language must name at least one chemical. If the product contains multiple cancer-causing listed chemicals, there is no guidance provided under the new rules as to which chemical you should disclose in the warning – there is no requirement that you list the most prevalent of the listed chemical when selecting the one to identify.

Where a product contains listed chemicals that cause reproductive harm, the new warning format must also contain the triangle symbol noted above followed by:


WARNING: This product can expose you to chemicals including Bisphenol A (BPA) which is known to the State of California to cause birth defects or other reproductive harm. For more information, go to www.P65Warnings.ca.gov.

Again, the warning language must name at least one chemical.


If a product contains listed chemicals that both cause cancer and are reproductive toxins, then at least one of those chemicals must be listed for both reasons of concern.  For example, the triangle symbol noted above must be followed by:

WARNNG: This product can expose you to chemicals including Lead which known to the State of California to cause cancer, and Bisphenol A (BPA) which is known to the State of California to cause birth defects or other reproductive harm. For more information, go to www.P65Warnings.ca.gov.


An alternative short form warning option is available for smaller products, as follows—

 

WARNING: Cancer - www.P65Warnings.ca.gov.

WARNING: Reproductive Harm - www.P65Warnings.ca.gov.

WARNING: Cancer and Reproductive Harm - www.P65Warnings.ca.gov.


If you use the alternative short form, the font size must be at least 6pt but cannot be smaller than other customer information provided on the product, such as other warnings, directions and ingredient list.

In addition, if the product’s label provides information in more than one language, then the Proposition 65 warning is must also be provided in those languages as well.  

Companies can also choose to add more information to the warning language (e.g., how to lessen or avoid exposure, etc.), but that additional language should not dilute or lessen the effect of the warning.

For internet purchases, warnings must be provided by including the warning statement itself or a clearly marked hyperlink using the word “WARNING” on the website product display page. In the alternative, the warning can be prominently displayed to the purchaser prior to the completion of the purchase.  In addition to ensuring that the warnings are posted on their website, the retailers must also ensure that the customers receive the warning through the traditional methods related to the sale of consumer products. Further, for catalogues, the warnings should be placed near the description of the item.

In terms of Proposition 65 compliance programs, there is no prescribed method for designing and implementing compliance processes for the Proposition 65 requirements. For example, companies can test for all listed chemicals that may be contained in their products, which may be impractical as it would be very costly and time consuming given the number of chemicals currently on the list and the fact that other chemicals are added every year. As a result, many companies test their products selectively, looking for the common listed chemicals are used in their types of products (e.g., lead, cadmium, phthalates, etc. in textile apparel and footwear, BPA in plastic bottles and accessories, etc.). Other companies choose to look closely at Proposition 65 settlement cases involving products that are similar to their won, formulating their products based on those agreed-upon chemical limits or issuing warnings based on testing performed to those agreed-upon settlement levels.

For retailers, compliance strategies may include:

  • Requiring suppliers to indemnify and hold them harmless for Proposition 65 violations.
  •  Confirming that their existing insurance existing policies cover them for Proposition 65 lawsuits.
  • Assigning Proposition 65 responsibilities to company stakeholders.
  • Implementing an internal Restricted Substances List or adopting a third-party created list.
  • Requiring suppliers to provide documentation evidencing testing and compliance.
  • Conducting regular risk assessments and internal audits, which can be performed by third parties.
  • Verifying and tracking supplier compliance.
  • Integrating supplier compliance into sourcing decisions.
  • Incorporating compliance and certification requirements into new supplier vetting process.
  • Establishing processes for working with supply chain partners on providing warnings.
  • Establishing a process for issuing acknowledgments to suppliers.
  • Providing regular training for company personnel.
  • Rolling out record retention processes specific to Proposition 65 supporting documentation.
  • Documenting all Proposition 65 policies and procedures in writing.


For suppliers, manufacturers and distributors, compliance practices may include:

  • If feasible, negotiating language in their terms of sale or supplier agreements that requires retailers to notify the supplier of the receipt of any non-marked products that trigger Proposition 65 warning requirements—in this case, the supplier may accept the return of the products and replace them with marked products or provide labels to the retailer to apply to them directly.
  •  Requesting retailers to provide certifications confirming that they have received the warning notices and marking materials, and have marked or displayed those warnings.
  • If feasible, negotiating with the retailer the assignment of separate SKU’s for products that trigger Proposition 65 warning requirements and having them segregate orders placed with the suppliers so that only products marked with the required warnings are delivered into California.
  • If feasible, having the retailer agree to indemnify the supplier in the case of Proposition 65 claims.
  • Implementing an internal Restricted Substances List or adopting a third-party created list.
  • Assigning a dedicated person to assume responsibility for managing chemicals used in products, reviewing them prior to purchase, and managing them in the workplace.
  •  Rolling out testing protocols and providing compliance documentation relating to downstream supply chain partners upon request.
  • Performing regular risk assessments and audits.
  • Adopting process for providing warnings and notifying California retailers.
  • Establishing formal record retention processes.
  • Providing regular training for personnel, suppliers and subcontractors.
  • Documenting all policies and procedures in writing.


Above all, in order to stay updated on developments in the Proposition 65 arena, retailers and their supply chain partners should read and review proposed rules, as well as proposed amendments to the legislation and regulations. They should also work to identify listed chemicals commonly used in their types of products. They can review 60-day notices that are filed with the California’s Attorney General and settlements that affect products that are similar to their own to identify what kinds of products are being targeted and what chemical limits have been agreed upon by the parties.

Melissa Proctor is the founder of Miller Proctor Law PLLC, an international trade law firm located in Scottsdale, Arizona. For more than twenty years, she has advised companies on the full of array of international trade issues, imports, exports, embargoes and economic sanctions, anti-corruption compliance, and other agency requirements that impact the cross-border movement of goods, information and services. She may be reached at 480-447-8986 or melissa@millerproctorlaw.com.



[1] To access the list, see: https://oehha.ca.gov/proposition-65/proposition-65-list.

 

Tags:  Proposition 65  retailers  supply chain  Warning Requirements  warnings 

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New Members Spotlight: October 2018

Posted By RCVF Admin, Tuesday, October 30, 2018

 
New Members Spotlight

The Betesh Group is a privately held, multi-million dollar consumer products company with offices across the United States, Hong Kong and China. In business since 1976, The Betesh Group has grown from a specialized manufacturer of ladies’ handbags into a market leader across several businesses. Each division works side by side and synergistically, sharing resources to work efficiently while maintaining distinct design, marketing and sales teams to maximize product line expertise.
As a leading designer, manufacturer, and distributor of hosiery, slippers, and soft-soled footwear, McCubbin prides itself on quality and innovation across everything we do.
 
Through our licensed, house, and private label brands, we build product solutions based on market data, industry trends, and experience honed through over 60 years in the industry.

 


Topson Downs, established in 1971, has evolved into an industry leader both in the branded and private label segments of the garment business.  With more than 300 associates based in Los Angeles, New York, and throughout Asia. Be it denim jeans, junior dresses, for girls fashion knit tops, we are committed to creating and producing quality garments while being socially and ethically responsible. We are currently producing over 40,000,000 units per year in eight countries throughout the world with our factories being supervised by our Quality Assurance and Social Compliance teams.

Delivering Fashion is Our Passion. Creating Trend and Quality for Our Clients with Great Care and Heart. We Believe in Making a Difference Every Day in Our Company and Yours.

 

Tags:  New RVCF Members 

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