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Retail Vendor Performance Management News Round Up for December, 2019

RVCF Celebrating 20th Anniversary; CPG Companies Putting more Focus Back on Brick and Mortar; New Apparel Factory Deaths in India and Bangladesh

Dec. 18, 2019

by SCDigest Editorial Staff

RVCF Approaching 20th Anniversary


The Retail Value Chain Federation (RVCF), an organization that bring retailers and vendors together to collaborate and share information, will celebrate its 20th anniversary in 2020 – and the New Jersey-based organization's history is interesting.

The organization started out as The National Vendor Compliance Organization (NVCO), serving primarily as a forum and platform where retail vendors could discuss chargebacks and sales deductions from their retail customers. This was costing vendors real money, as much as 5% of gross invoice in some cases.

Supply Chain Digest Says...

Dozens of on-line consumer-products startups are finding their success actually depends on getting on the shelves of Walmart, Target, Kroger's and more.

During the early years of the NVCO, retailers were skeptical about the intentions of the group, which was very much supplier-focused - but a few saw the potential to communicate their side of the story and work directly on issues with vendors.

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So NVCO became the Vendor Compliance Federation (VCF), an independent organization that would represent the interests of all trading partners and the consumer goods to retail sector as a whole.

Rather than simply reducing deductions, VCF would focus on the processes, best practices, and solutions that would prevent those deductions from happening at all, as retailers could join vendors as members.

To further clarify its role, in 2009 the organization again changed its name to the current Retail Value Chain Federation. Among the many services it provides, RVCF maintains a Compliance Clearinghouse, through which it monitors the order fulfillment requirements and compliance programs of more than 100 retailers.

It also produces a spring and fall conference, where hundreds of retailers and vendors gather to hear case studies, the latest thinking and more, and meet one-on-one to discuss issues and opportunities.

Congratulations to Kim Zablocky and RVCF team on 20 great years.

More Focus on Brick and Mortar in CPG

In the consumer packaged goods sector, some of the bloom is coming off ecommerce rose.
For example, in 2016 Unilever acquired then fast-growing Dollar Shave Club, the on-line razor subscription service, for $1 billion.

Now more than three years later, the business still isn't making money. And executives discovered the average expense of winning each new customer was about the same on-line as in stores

According to a recent article in the Wall Street Journal, a number of consumer packaged goods companies, are falling a bit out of love with ecommerce's potential and putting renewed focus on physical stores.

"There are many, many launches that grow fast, and people call them successes because they grow fast," says Procter & Gamble CEO David Taylor. "We're in the world of having to create value, not just grow. A business model that makes money is a higher challenge."

Dozens of on-line consumer-products startups are finding their success actually depends on getting on the shelves of Walmart, Target, Kroger's and more.

At Cora, a maker of the organic feminine-care products, investors initially balked at the idea of the startup relying on big retailers for sales. But now the company's traditional retail sales have reached nearly 60% of total revenue, up from 15% early on.

The subscription model in CPG products seems to be especially under assault. Unilever, for example, has concluded that selling staple goods through on-line subscriptions doesn't make financial sense. Similarly, P&G tested on-line subscriptions on a number of products, most prominently with Tide laundry pods.

But consumers never bought in, and P&G recently scrapped that effort, as brick and mortar retail actually wins a round.

Fatal Accidents at India, Bangladesh Factories

Safety issues in Asian factories have popped up again in recent weeks.

On Dec. 8, at least 43 people were killed in New Delhi, India when a fire swept through a 6-story factory where workers were sleeping, government officials said.

The factory made handbags and had lots of raw material stored inside the building, which caused the fire spread quickly, local reports said. The fire appears to have been caused by an electrical short circuit.

Many of the workers were migrants from the impoverished border state of Bihar in eastern India. They earn as little as 150 rupees ($2.10) per day making handbags, caps and other garments, sleeping at the factory between long shifts.

NBC reported that "Fires are common in India, where building laws and safety norms are often flouted by builders and residents."

Meanwhile, an explosion and fire Dec 10 at a sweater factory in Bangladesh that supplied retailers including Next and H&M left at least one dead and several others injured.

An explosion from a gas heater triggered the fire at the Natural Sweater Village factory not far from the capital city of Dhaka. A tin-wall of the shed-like building then collapsed.

A spokesperson from Next is reported to have said the factory was compliant with its standards and was last inspected just this past June.

A variety of safety programs from retailers, apparel brands and the government have been put in place in Bangladesh and elsewhere after a 2012 fire at an apparel factory on the outskirts of Dhaka killed at least 112 people trapped behind locked gates.

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