Congratulations to the honorees of Fast Company’s 2019 Innovation by Design Awards for retail environments. These companies are recognized for their forward-thinking designs that serve markets better and offer more productivity and profitability to their owners. From our perspective as space utilization and information management experts, two businesses in Fast Company’s 2019 class stand out for ingenious uses of commercial space and data technology:
The co-working company Spacious is built on an inventive model that takes freelancers out of their overcrowded daytime “Starbucks office” and places them in restaurants that are closed during the day, open only for dinner. These restaurants are climate-controlled, and the lights are on for the day prep crew, but the dining areas are completely empty until late afternoon; in essense, the restaurants are paying for underutilized space. Restaurants team up with Spacious to provide co-working space in the unused dining rooms, and the Spacious on-site team provides power points, wifi hookups, and user assistance. With memberships set at an affordable $95 per month, which Spacious splits with the restaurants, it’s a win for everyone.
This is the kind of maximized space utilization that NOS encourages with our document conversion services and high-density storage systems. Big thumbs-up to Spacious!
Walmart has been a pioneer in retail technology for many years. An early adopter of supply-chain RFID, Walmart recently installed a pilot program of retail AI in the form of an Intelligent Retail Lab (IRL) in one of its highest-demand locations. Sensors and cameras send information to a room-size data center, which in turn generates alerts to maintain the in-store inventory. Availability of products, freshness of produce, even the number of empty grocery carts in the parking lot, all is monitored by the IRL rather than by store associates. Staff are freed up to focus on face-to-face interactions with customers. Productivity goes up, and the cost of outdated inventory and lost sales goes down.
We strongly advocate the use of asset management technology. RFID and bar coding are proven information management systems with a positive impact on profits. Well done, Walmart!
Good design isn’t just an aesthetically-pleasing façade; it contributes to the success of a business, and enriches the community in which that business operates. Our highest compliments to these enterprises for their outstanding designs!
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Retailers with captive consumers – notably airports and hospitals – used to enjoy a mini-monopoly. The offerings of the shops were limited and the prices were exorbitant. In the late 1990’s, however, airports began to capitalize on their corridors, installing elaborate retail malls and food courts. In some cities, airports even looked to become dining destinations. But hospitals were slow to change. The hospital gift shop continued to disappoint the hopes of shoppers with time on their hands, money in their pockets, and no other retail options.
Now, though, hospital gift shops and pharmacies are starting to realize their larger retail opportunities. Expanding their offerings and bolting on additional services like salons and spas gives hospitals new revenue opportunities. Part of this change is driven by competition among healthcare providers, whose marketing teams actively seek ways to stand out in the marketplace. Online “hospital gift shops” are also grabbing some of the get-well-soon gift business, pushing the brick-and-mortar gift shops into a newly competitive position.
Amy Eagle, writing in Healthcare Facilities Management Magazine, discusses the innovative high-end hospital retail spaces appearing around the country. From relaxing spas to colorful toy stores (like the one pictured here), these retail designs are intended to “distract, amuse, comfort, and soothe.”
The new retail spaces come with a challenge: Where to store all the additional inventory for the expanded retail? Storage space is always at a premium in hospitals; medical supplies and equipment always get first dibs. Space-efficient storage technology – high density mobile shelving, for example – reduces space requirements by 50%, while eliminating much of the shipping packaging commonly found in retail storages areas – packaging which can attract health-compromising pests. It’s a win for everyone – patients, visitors, and hospitals.
The captive consumer, with only a single choice for goods or services, represents the very antithesis of American freedom of choice. While every retailer would be happy to have 100% of the business, they know that competition, although arduous, improves their own opportunities as well as those of their customers. A well-designed space-efficient inventory storage system makes it possible to expand inventory and meet the competitive challenge.
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Everyone knows what a bar code is – we can’t forget the commercial showing bank customers with bar codes on their foreheads – but the workflow and inventory management benefits of RFID (Radio Frequency Identification) technology aren’t as well known. Like bar codes, RFID tags contain information about the item they’re attached to. No doubt you have seen those large plastic tags clipped on apparel in retail stores, and seen them removed by cashiers at the time of purchase – those are RFID tags, and they help the store manage inventory. But RFID tags also come in much smaller versions, like the one pictured here, and they can be affixed to everything from shipping boxes to artworks, tools, furniture, weapons, and even office file folders or individual documents. They’re inconspicuous, easy to apply, and last for 50 years.
The technological difference between RFID and bar codes is this: Like books or newspapers, bar codes are printed in ink, and must be visually read by an electronic scanner. RFID tags, by contrast, are essentially tiny radio transmitters, bouncing a signal back to an RFID reader just the way your favorite radio station relays a signal to your car radio. The RFID signal contains unique identifying information about the item the tag is attached to.
On the surface, RFID may not seem to offer any advantages over bar codes. Nevertheless, Walmart, Macy’s, and other retailers turned to RFID for a very good reason: Labor costs. Their inventory management systems were based on bar codes, and the bar code scanner had to “see” the bar code. Because it couldn’t see around corners or through walls, every item in a stockroom or warehouse had to be manually turned toward the reader – a time-consuming labor-intensive process. And labor is expensive.
The radio signals of an RFID tag, however, can be “grabbed” by an RFID reader without the reader ever having to see the tag. As long as the reader is in proximity to the tag (same room or same building), it receives the information from the RFID tag via radio waves, without any need to handle the inventory. In effect, the RFID reader can see around corners, or through a stack of boxes, or into a filing cabinet. The labor of inventory management becomes as simple as walking into a room.
RFID is a game-changer for any organization that needs to keep track of inventory or assets:
- Facility managers know where every desk and chair is located without doing a room-to-room count.
- Automobile manufacturers streamline workflows by tracking parts as vehicles move through the assembly line.
- Museum curators are certain of which storeroom contains a particular collection, without having to open drawers or rummage through shelves.
- Warehouse managers know exactly what a new shipment contains without having to open the boxes.
- Paralegals locate critical documents in a law office without having to search through multiple files.
Bar code technology is far from obsolete, however. Bar codes are a proven solution for an array of situations in which labor costs are not such a big part of the inventory management calculus. But for many organizations, RFID offers productivity benefits that boost the bottom line.
As every manager and owner knows, inventory and asset management is vital to any successful enterprise. RFID will streamline your workflow and improve inventory accountability. Consult with an expert in inventory management and storage who can tell you if RFID or bar coding, or both, could be the right solution for your business.
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Nordstrom is adding to its retail technology with the acquisition of two mobile apps. One will give store associates the ability to send personalized product recommendations to consumers when they’re out of the store, as well as the potential for consumers to share information with each other and shop online as a group. The other app sends customers personalized text messages that allow them to purchase via the text message.
These apps are part of Nordstrom’s effort to build on its reputation for a personalized shopping experience, a corporate value that dates back to the retailer’s earliest years. Similar apps are likely to be adopted by other retailers wanting to strengthen their customer relationships.
Collectively, such retail-relationship apps will have an impact on inventory management. When customers respond to a shopping opportunity en masse, at the speed of technology, retailers must have sufficient stock on hand to meet demand. Otherwise they risk disappointing their customers and undermining the very same relationships they’re building with their shopping apps. Inventory technology, especially RFID, will be vital to fulfilling the demand created by these apps.
From automotive jobber to specialty boutique to major department store, retailers have been using RFID inventory management in some degree since the early 2000’s. RFID inventory systems allow retailers to balance the tension between two inventory principles: (1) keeping sufficient inventory on hand for current demand, and (2) maintaining excessive storage capacity as inventory and demand fluctuate.
Even with the advances in RFID inventory management, predicting future demand has always been an educated guess, putting retailers in a reactive position to market demands. But with the new retail-relationship apps, retailers can become more proactive. As customers react to store associates’ suggestions, retailers can aggregate the responses to predict demand and refine their JIT orders. If a product seems like a hot buy, retailers can stock up in readiness for demand. If a product doesn’t garner much buzz, retailers can avoid overstocking and the storage costs that come with it.
The next step for retail technology may be linking customer-outreach apps to inventory management technology, creating an end-to-end system that ensures sufficient stock without an oversupply of warehouse or in-store storage capacity. This means that retailers who are considering acquiring or expanding RFID technology should choose a future-proof system that can accommodate new technology developments as they come on line. Talk to your storage consultant to find out what RFID system is best for your enterprise.
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Continuous improvement – it’s a principle of Kaizen, or lean management, which encourages constant incremental advancements and uses past performance to suggest changes for future improvements. The coming new year is always a good time to reflect on the previous twelve months and look for new opportunities for improvement. With that in mind, here’s a recap of our informational offerings which we hope will help you achieve your goals for next year.
This year has seen remarkable changes, and one of the key elements to successful change management is flexibility. In February, we discussed how adaptability allowed ancient man to survive in hostile climates, and how it makes it possible for today’s facilities managers to handle the changing spatial needs of businesses and institutions. From telecommuting (August) to staffing fluctuations and workspace repurposing (January), adaptive furnishings are a good fit for agile organizations.
A proactive approach is one of the building blocks of continuous improvement, as well as a cost-effective way to manage change. Innovations in automation (February) help facilities and logistics managers monitor inventories and usage in real time, allowing them to respond to unexpected changes without any loss of throughput. A sound disaster recovery plan (September), including storage systems and inventory records that reduce or prevent loss, is the kind of forward-facing planning that supports business continuity and continuous improvement.
More efficient use of resources, whether it’s space, time, or finances, always results in better productivity – the ultimate goal of continuous improvement. When your facility can reclaim 50% of storage floor space with a mobile storage system or a vertical carousel system (October), that extra space can be utilized for more productive activities. RFID inventory management (August) lets retailers and logistics managers respond to unexpected demand with efficient JIT supply chains (July), with a resulting increase in sales productivity.
As the saying goes, hindsight is 20/20. A clear-sighted look at your organization’s productivity during the past year will show areas where you’re achieving continuous improvement, and areas where you can add flexibility, efficiency, and proactive management to take your processes to a new level in the new year.
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Brick and mortar retail sales have been in free-fall as online shopping grows exponentially. Some retailers have taken bold steps to survive, staking their future on technology and right-sizing. And the latest numbers may show some hope. Although overall year-over-year growth is still in negative territory, a recent Bank of America Merrill Lynch analysis found that department store sales were showing 5 months of positive growth.
To turn the retail ship around, major retailers including Macy’s, Payless, and Radio Shack have closed 6,375 stores , retaining only their most profitable stores. Although this radical measure meant they were losing the revenues from the closed stores, the short-term loss was offset to a degree by significantly-reduced long term real estate expenses.
Some retailers have also made a major commitment to technology to help their brick-and-mortar stores. Consumers love the low prices they find online, but they don’t love waiting to receive their purchases. Retail stores cater to the need-it-now buyers, consumers who are willing to pay a slightly higher price in exchange for immediacy. But to satisfy the need-it-now buyers, storefront retailers have to make sure their inventory is never out of stock. Those who eliminate out-of-stocks are seeing a corresponding rise in sales.
This is where an RFID inventory management system makes the difference. An RFID system allows retailers to set low-inventory alerts, so they can restock shelves before an out-of-stock ever occurs. Warehouses can respond proactively, before a shortage develops. Storefronts never run out of popular items and need-it-now buyers are never disappointed.
Macy’s, for example, has adopted RFID inventory management throughout their entire supply chain. Recently they were reported as having tagged 50% of their inventory, with plans to tag 100% by the end of 2018. Since implementing RFID, Macy’s has seen a 200% increase in in-store sales.
Like much new technology, the cost of RFID has dropped dramatically in the 20 years since its inception, making it a viable solution for retailers large and small. And the increased cost control that comes with RFID can also extend to other aspects of retail inventory management, particularly storage. Multi-level racks and vertical storage can reduce storage space needs. Combined with accurate inventory forecasting, storage costs can be managed better, with less waste. A storage consultant can design a complete retail inventory management system combining RFID and compact space-efficient storage. That’s a radical step toward improved profitability.
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