ETD: 879 Returns As a Percent of Sales; Yahoo Offers Free Web
Sites for Small Businesses; RFID Worth the Risk
E-Tailer's Digest
etd_post at gapent.com
Tue Apr 19 12:12:35 GMT 2005
E-Tailer's Digest --- Everything for the Retailer
Issue #0879 April 19, 2005
George Matyjewicz, Moderator mailto:georgem at gapent.com
Published by: GAP Enterprises, Ltd. http://www.etailersdigest.com
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CONTENTS
[1] Greetings
[2] Returns As a Percent of Sales
[3] Yahoo Offers Free Web Sites for Small Businesses
[4] RFID Worth the Risk
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[1] Greetings.
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Hi All:
One of our new list members asks what retailers/etailers are experiencing
with returns. What is your experience?
Yahoo is offering a new service - free, 5-page web hosting for local
businesses. This is a great opportunity for local businesses to build a
presence. I was surprised to learn that 50 percent of the 20 million small
businesses in the U.S., do not have a web site. Everybody should have one
- it is the best place for customers to learn about you before they come to
your store.
Also, for those of us who have websites, this is a great opportunity to
extend our network, which helps position us higher on search
engines. E-Tailers Digest is a great example of that reach. While we
don't sell anything there, any time we list something it comes up high on
Google, because of all the links to/from the site.
One of my favorite topics is RFID (Radio Frequency ID), which I strongly
believe will be the wave of the future (as will satellite radio, especially
Sirius who now has Howard Stern and Martha Stewart). If you are curious or
considering RFID, read "RFID: Worth The Risk."
Tell us about your business, which will remain for posterity at
our "Members: Who Are You?" site. This is a courtesy to our members who
contribute to our forum, and not merely a way to advertise for
free. Anything to do with the retail world, i.e., supplier, retailer,
consulting, etc. http://etailersdigest.com/resources/members/index.htm And
we have a form there for you to tell us about you. As I said when I first
proposed this idea, we have "known" each other for a long time, yet we
often don't know anything about each other. So, tell us who you are and
what you do.
Now, let's get to everything for the retailer.
Sincerely
George Matyjewicz, PhD
Chief Global Strategist, GAP Enterprises, Ltd.
mailto:georgem at gapent.com
http://www.etailersdigest.com
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[2] Returns As a Percent of Sales
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Brian Way, a new list member asked what is the percentage of returns for
credit experienced by different retailers/e-tailers.
The normal stats for retailing are 19% for markdowns; 3 1/2% for shrink;
23% gross margin and turn inventory 3 times. What does all that mean? If
you are doing $1 million in sales and you could reduce markdowns by 1%;
shrink by 1/2%; gross margin by 1% and turn inventory 4 times, you would
put $33,333 more in your pocket each year. That's what you need to
concentrate for added profits.
Markdowns includes returns and goods that don't sell, which you have to
discount. The percentage varies for different industries. For example,
apparel is 20% or higher. A little known fact is that mirrors in women's
dressing rooms are tilted slightly (1/4 to 1/2 inch) so that you the goods
look better on you in the store. Then when you take them home, you either
don't wear them or take them back.
Mail order apparel is even higher, since many women consumers often order
three sizes, i.e., they may wear an 8, but order a 6 and 10 also since they
can't try on the goods. Which means they return two pieces.
I assume you are in the memory industry, which is more stable. Your
returns should be low, unless you get a bad batch of goods (one of our
clients in PNY).
Anybody else have information?
George
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[3] Yahoo Offers Free Web Sites for Small Businesses
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In a move to enhance its search and advertising businesses,
Yahoo announced it would offer free Web hosting to small businesses. The
Internet company said any small business can sign up for a free Web page
that will appear in Yahoo's Local directory. http://listings.local.yahoo.com/
Analysts expect that helping hand to be well received. According to The
Kelsey Group, over 50 percent of the more than 20 million small businesses
in the U.S. do not yet have a Web site .
Kelsey Group analyst Greg Sterling told the E-Commerce Times this is an
attractive offer for small businesses because it removes a lot of barriers
to adoption, like which host to use and how much storage space to purchase.
And Yahoo's template wizard makes it easy to set up a working site in a few
steps.
"If this is widely adopted, it could have a broader impact on the market,"
Sterling said. "Competitors might have to set up something comparable as an
entry level offer or attempt to discredit the strategy."
The free service complements Yahoo Local's other merchant offerings,
including Free Basic Listings and Enhanced Listings.
Yahoo is betting that small businesses will extend their Internet presence
over time as their online needs grow with its other services, like domain
name , e-mail, enhanced Web hosting and e-commerce solutions.
Details...
http://www.ecommercetimes.com/story/42251.html
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[4] RFID Worth the Risk
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RFID holds a lot of promise for a lot of industries, even if the benefits
may not be abundantly clear to everyone right now. That was the message
from a host of speakers at the RFID Journal Live conference in Chicago.
"We're in the very early stages of a marathon," said Lyle Ginsburg,
managing partner for technology innovation at Accenture. "This thing is
moving, it is unstoppable, and it is continuing to grow every day."
Accenture recently completed a survey of 30 RFID early adopters and found
that end users believe the technology is improving at a rapid pace, and
that the long-term rewards outweigh the risks. The companies Accenture
surveyed emphasized that RFID "is solving business problems today,"
Ginsburg said, and that "the [return on investment] is in sight."
Deployment will not be without challenges, however. Representatives from
some of the world's largest manufacturers and retailers, as well as the
U.S. Department of Defense, repeated again and again the benefits of RFID,
and then recited a laundry list of technical and financial hurdles.
The message remained consistent throughout, however: start experimenting
with RFID now, even if the business case is still fuzzy. "You learn by
doing," said Mike Meranda, president of EPCglobal US, "even though the
technology is not perfect, and even though it's more expensive that we'd
like it to be."
Among the possible benefits of RFID, large and smaller companies alike
noted improved inventory tracking, inventory reduction, reduced shrink,
proof of delivery, more efficient receiving/shipping operations, and better
deductions management. One early adopter, Beaver Street Fisheries, noted it
had gained new retail business because of its RFID capabilities.
Gary Cooper, chief technology officer at Tyson Foods, said his company has
been working with RFID for 16 months to comply with Wal-Mart's mandate.
Tyson manually applies RFID labels to shipments from four of its facilities.
"I cannot afford to label more of the product than I absolutely have to,
and we label at the last possible moment because we don't know ahead of
time where each package is going," Cooper said, noting that the meat and
poultry industries operate with thin margins.
Tyson is building a bottom-up business case, but doesn't expect to see a
return until late 2006 or early 2007. "We had a hard time finding the ROI,"
Cooper said. "But we determined it was not a question of if, but when RFID
would be successful. There are certain problems that can be solved with the
EPC, and I think there are some 'Aha!' moments we just can't predict right
now."
Cooper declined to say at what price RFID tags would be an affordable
option for Tyson, but noted it would have to be "well into the single digits."
The Department of Defense, which has the most aggressive adoption plan so
far, presented the best numbers. According to Alan Estevez, the DoD's
assistant deputy under secretary for supply chain integration, there's
already been a 3% improvement in timeliness and accuracy of receipt and
shipping data where RFID is in use. Read rates are at 96%, and the
department expects a $70 million payback in three years -- and that's
without figuring potential inventory reductions and increased readiness of
weapons platforms.
"Here's the real lesson learned: the technology works," Estevez said.
UK retailer Tesco has committed to deploying thousands of RFID readers from
ADT Security Services (part of Tyco Fire & Security) at its stores and
distribution centers, and will require suppliers to tag cases starting this
year.
While the retailer has high hopes for RFID, group technology director John
Clarke outlined such technical hurdles as the lack of standardized dock
door configurations at Tesco's stores and distribution centers,
interference with in-store phone systems, damage to RFID labels during
transport, and a shortage of tags.
"This has to be treated as an ecosystem," Clarke said. "[RFID] is a
challenge, and it's no small thing."
Another headache is the European Telecommunications Standards Institute's
(ETSI) 302-208 standard, which is much more restrictive than U.S. radio
frequency regulations. Less bandwidth is available in Europe, and the
standard requires lower power output and a shorter read range. Readers also
have to follow a "listen-before-talk" protocol that will be challenging in
a dense reader environment.
Details...
http://www.frontlinetoday.com/frontline/article/articleDetail.jsp?id=156139
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