This Week in SCDigest

Trip Report: NRF 2014

Ok, I am not long back from my annual pilgrimage to New York City and the Javits Center for the National Retail Federation's "Big Show." It was in effect a week earlier this year, giving me and all the attendees our Martin Luther King day back (on which we work but it is a welcomed "catch up" sort of day), and the show continues to be on a nice roll.

Thousands of you have watched our daily video reviews, which feature many of the cool solutions I found at the show. You can see them here: NRF Day 1 and Day 2.

The show features general presentations, exhibitor sponsored presentations, and a very large trade show. I only covered the vendor exhibits this year, as I barely got around the whole thing in the two days I was there. Last year, with obviously rising vendor demand, NRF opened a new lower level exhibit area, which was back again this year, so the total floor space is quite large.

Attendance was very good, said to be some 30,000, up a few thousand from 2013. I always take the numbers from any show with a grain of salt, but the show floor was very busy, a bit more so than last year it appeared to me. Exhibitors seemed generally pleased.

I cover this event for several reasons: first, because the retail supply chain in a very important and prominent one; second, because a large percentage of companies in the end are connected to what is happening in retail; and third, as consumers generally advanced in retail are often quite interesting.

That said, supply chain in general is a background theme at this event, and you have to hunt a bit to find it. Notable supply chain oriented vendors there were JDA, Manhattan Associates, Logility, Knighted (the software arm of Intelligrated), TXT Maple Lake, Logfire, GT Nexus, Motorola Solutions, Honeywell, and a decent number of smaller players, as well as all the major ERP providers (Oracle, SAP, Infor, Microsoft, Epicor, etc.)

The dominant areas of focus this year were, as with last year: (1) omni-channel commerce and (2) "advanced" analytics of every sort. It seemed like virtually every booth was touting one or the other, if not both.

Many vendors were promising to make omni-channel "easy" or "seamless" or something like that. A growing number are promising easy "order on-line, pick-up in store" and "fulfill from store" capabilities, the latter of which is obviously the emerging retail defense against being "Amazoned." 

As I have said before, more so than about any other area, the challenges of omni-channel are hugely related to IT capabilities. Your software either supports fulfilling from stores or it doesn't, for example. Retailers understand this, and they are investing/spending.

As noted, it seemed every other vendor was offering "advanced" or "predictive" analytics. I don't think 1 in 100 of us have any idea what those terms really mean. So I started asking around.

David Wiest of software vendor Retalon said that advanced analytics are simply able to handle more variables relative to forecasts than the current tool kit of forecasting algorithms, which are mostly based on looking at history. I would summarize his take as being that analytics can do a better job of including a wide range of "causal factors" (weather, competition, promotion, etc.) than traditional forecasting systems have been able to do.

Charles Chase of SAS told me that traditionally, companies have used "descriptive" analytics - scorecards of what has happened in the past. "Predictive" analytics as the name implies offer insights into what is going to happen, and perhaps what to do about it. (I will note those using the term "advanced analytics" seem to be talking about predictive analytics capabilities.) Chase tied predictive analytics to "big data," saying these new tools can mine vast amounts of consumer information and find patterns about what factors are driving demand in ways that a person or traditional tools simply could not identify. More on this soon.

Both these discussions are on our video summaries, Wiest on Day 1 and Chase on Day 2.

A subset of overall analytics are in-store video analytics, with some 12-15 vendors offering such tools there. In general, they use technology that identifies a shopper's gender and approximate age, and then follow each shopper across an array of in-store cameras to measure traffic, conversion (did you go through the POS?), shopping patterns, display effectiveness and more.

It's going further: a company called Simply RFID will pick up your smart phone ID via the latest bluetooth connections and launch a video track of you tied to that ID. 

And these analytics are moving to real time. Are conversion rates slipping - right now? Store managers and/or headquarters personnel will either be able to see these metrics in real time and/or be alerted if certain metrics fall below acceptable levels (or when traffic grows and more people are needed on the floor). Real-time responses will need to be made. This is a new world.

The coolest technology I saw at the show was something called a "digimarc" from a company of the same name. In great summary, it can embed the equivalent of a two-dimensional bar code, like the increasingly ubiquitous QR code, in a photo or other image. So, your smart phone or an image scanner can focus on the image and launch a URL.

Digimarc does this by somehow manipulating the yellow portion of a four-color image in a way that creates a code that cannot be perceived by the human eye. So, some marketers think QR codes are ugly - this can eliminate them. They take up no room on a package or page, so you could place them all over an item so that a cashier does not have to find the UPC code, speeding up scanning. Could this work on a high speed conveyor too? One automotive company put digimarcs on the top of some of its bolts for auto ID purposes, replacing a bar code label.

I think it's worth following this technology. A digimarc is likely on your state driver's license and you don't know it. A digimarc is on the Euro currency too, where it got its start.

The next coolest thing I saw at NRF was a series of new RFID readers from a Euro company called Embisphere. When I first saw the oddly shaped, wand looking thing, my reaction was "why is it so long?"

Well, it's so that for in-store reading an associate can easily reach up, reach down, wave it around, etc. to get all the tags quickly and with little effort (it's very light, by the way). And of course in today's world it has bluetooth connectivity, and a neat audio feature to find a specific SKU, using sound as a sort of "cold, cold, warmer, warmer, hot" approach. The company has other devices, some that could work in more industrial environments, all elegantly designed.

Back to the in-store video analytics, a company called i3 can track when a store shelf position is out of stock from video. Today, retailers use all sorts of algorithms to estimate if there is an out-of-stock - and if that results in a lost sale. Forget that. The video will now just see the space is empty, report that information, and measure if a customer came up and walked away because of the OSS. The company says it is working with major soft drink bottlers, who believe they can reduce the number of delivery trucks they need in a market with this video insight. Video will solve the OOS measurement problem, and soon.

A company called Koamtac introduced a new line of very small, very cool "smart" bluetooth bar code scanners that can be connected to data collection terminals, PC, smart phones, etc. They are worth checking out.

There were many more - you can find them all on the videos. 

Let me end by saying that virtually all new software being released in Cloud-based, and built with tablets and smart phones in mind. That is just where everything is headed. Keep that in mind.

Any reaction to our NRF 2014 review? What cool solutions did you see? Let us know your thoughts at the Feedback button or section below.

I loved the Supply Chain Christmas Carol - especially the kids asking "What's supply chain again?" - that made me laugh since I experience that all the time.

Let me know the website link and I'll direct people to it.

Alex Fuller
Supply Chain Cowboy

Love it. Very clever, creative and informative! Merry Christmas!

Shelley Nobcessory