The world-renowned fashion trendsetter and icon has been previously famous for the brand’s luxurious and coveted chic creations. As of 2002, Prada has most recently stepped into a new realm of innovation. Equipped with video monitors, RFID tags, handheld computers and touch-screen displays, Prada is attempting to recreate a most inventive and insightful retail environment. This environment will provide a unique experience that customers have yet to experience in any other store atmosphere. The creation of this environment has alternative motives to up-sell customers and monitor stock, yet the focus of this innovation is to create an experience of ultimate customer service.
According to the article, “Learning from Prada,” the store environment is being altered dramatically in order to reinvigorate the Prada brand. I believe that Prada’s efforts will prove to show the dynamic, innovative and first-mover characteristics of the brand. I feel that other companies, brands or retailers can capitalize on this technology to change and successfully redefine a brand image. Older brand names with more of a “grandfather” image can utilize these strategies to refresh and re-communicate a desire to serve a clientele. I feel that many service oriented organizations will be able to successfully use these technologies.
For example, many restaurants will have repeat visitors. By tracking their clients via a convenience or customer-loyalty cards, similar to the card used by the Prada stores, a restaurant could keep track of past orders, drink information and customer favorites including allergies or taste preferences. Additionally, through the collection of this data, the restaurant could use this information to create and update menus or specials to enhance the customer experience while dining at the restaurant. Based on the Prada model, businesses would be able to, “spend more time attending personally to a customer” (www.ideo.com).
Prada’s brand is extremely distinct in its luxurious, exclusive and high class image. This image that the organization has created, must only be supported by the highest and finest of technology to be consistent and not miscommunicate the branding to Prada’s customers. As Prada hopes to reach high class, trendsetting customers, this technology would excite a shopper and hopefully generate greater customer loyalty and repeat purchase. If used successfully, a Prada customer would walk away from the shop feeling extremely taken care of in a near-celebrity-like manner. With the cost of Prada items, it would be an expectation of customers to receive an extremely high level of service. Additionally, it would be important for the level of technology to be properly aligned with a enthusiastic, knowledgeable, yet non-obtrusive staff.
Overall, I feel that Prada’s attempts are ambitions yet have room for refinement and improved implementation. The articles mention that though sales representatives were highly trained in many of the technological devices, the handheld technology was sparsely utilized. Ideally, if utilized and successfully integrated into the complete branding of Prada, these technologies could significantly enhance the customer experience for shoppers.
http://www.ideo.com/case_studies/prada.asp?x=1
Learning from Prada. RFID Journal. 24 June 2002.
Thursday, March 29, 2007
Tuesday, March 20, 2007
Consumer Goods Manufacturers: Slaves to the Wal-Mart Enterprise
We are the generation of automation. RFID tags, or radio frequency identification tags , “often as small as a grain of rice, now hide in ID cards and wristbands, windshield-mounted toll tags, gasoline quick-purchase tokens, and electronic ear tags for livestock, and they have begun to appear in auto key-chain antitheft devices, toys (Hasbro Star Wars figures) and other products” (Want).
RFIDs are rapidly changing the way mass sellers conduct business and are forcing their business partners to respond without question. According to Roy Want, writer of “RFID: Key to Automating Everything”, “Wal-Mart announced that it will require its top 100 suppliers to place high frequency tags on cartons and pallets shipped to its stores.” In the eyes of Wal-Mart, this will ideally help cut back on labor costs, minimize and track store shrinkage, including theft and damaged goods, and monitor shelves to ensure more consistent sales. Many shoppers complain about Wal-Mart’s infamous out-of-stock items. Wal-Mart hopes that through smart-shelf systems, aided by the RFID technology, the stock levels will be constantly monitored and when items are few in number, new orders can be automatically placed directly to manufacturers without any human interface.
As we explored this cutting-edge concept of RFID technology in class, I felt that it was important for me to discover how this technology was impacting the industry that I will soon be working for upon graduation, consumer goods. I have found that consumer goods manufacturers have become slaves to Wal-Mart’s dictatorial authority due to sheer volume alone. According to “Wal-Mart's RFID Deadline: A Chunky Mess” a consumer goods company, such as General Mills, gets 13 percent of its $10.5 billion in annual sales by doing business with Wal-Mart. This number is so significant that not obeying the wishes of the super-power Wal-Mart would take a costly hit on the entire business of General Mills and other consumer goods companies.
The article also uses Campbell Soup Company as a benchmark in the industry, and further states that, “moving to radio tags won't be simple. Analysts say Campbell must deal with an immature technology, unclear messages from Wal-Mart and the basic difficulty of adopting a new system to identify all its products, after the decades-long introduction of the UPC system” (Dignan). Furthermore, these companies utilize scanner data, received from barcodes, to track when each item was purchased and goes home with a customer. Without keeping the barcode data intact, consumer food companies will be loosing out on a major resource for research and sales data. Thus, while bar codes are not a priority for Wal-Mart currently, manufactuers’ products may not be missing them, even with the addition of RFID tag technology.
Thus, consumer goods companies are at the mercy of Wal-Mart’s demands. This deadline to place RFIDs on each SKU is extremely costly. “Wal-Mart’s RFID Deadline: A Chunky Mess” says “leading consumer goods manufacturers will spend from $13 million to $23 million each in 2004 to comply with Wal-Mart's mandate”. Not submitting to this powerful and lucrative customer will be detrimental to one’s business and allow for competitors to gain a competitive advantage with the largest global customer. For most consumer goods companies, going against the grain is simply not an option. As I move into my new career in consumer goods, I am interested to see how General Mills responds and serves Wal-Mart as both a customer and as a superior.
Dignan, Larry. Wal-Mart’s RFID Deadline: A Chunky Mess. www.eweek.com. December 15, 2003.
Want, Roy. RFID: Key to Automating Everything. Scientific American. 2003.
RFIDs are rapidly changing the way mass sellers conduct business and are forcing their business partners to respond without question. According to Roy Want, writer of “RFID: Key to Automating Everything”, “Wal-Mart announced that it will require its top 100 suppliers to place high frequency tags on cartons and pallets shipped to its stores.” In the eyes of Wal-Mart, this will ideally help cut back on labor costs, minimize and track store shrinkage, including theft and damaged goods, and monitor shelves to ensure more consistent sales. Many shoppers complain about Wal-Mart’s infamous out-of-stock items. Wal-Mart hopes that through smart-shelf systems, aided by the RFID technology, the stock levels will be constantly monitored and when items are few in number, new orders can be automatically placed directly to manufacturers without any human interface.
As we explored this cutting-edge concept of RFID technology in class, I felt that it was important for me to discover how this technology was impacting the industry that I will soon be working for upon graduation, consumer goods. I have found that consumer goods manufacturers have become slaves to Wal-Mart’s dictatorial authority due to sheer volume alone. According to “Wal-Mart's RFID Deadline: A Chunky Mess” a consumer goods company, such as General Mills, gets 13 percent of its $10.5 billion in annual sales by doing business with Wal-Mart. This number is so significant that not obeying the wishes of the super-power Wal-Mart would take a costly hit on the entire business of General Mills and other consumer goods companies.
The article also uses Campbell Soup Company as a benchmark in the industry, and further states that, “moving to radio tags won't be simple. Analysts say Campbell must deal with an immature technology, unclear messages from Wal-Mart and the basic difficulty of adopting a new system to identify all its products, after the decades-long introduction of the UPC system” (Dignan). Furthermore, these companies utilize scanner data, received from barcodes, to track when each item was purchased and goes home with a customer. Without keeping the barcode data intact, consumer food companies will be loosing out on a major resource for research and sales data. Thus, while bar codes are not a priority for Wal-Mart currently, manufactuers’ products may not be missing them, even with the addition of RFID tag technology.
Thus, consumer goods companies are at the mercy of Wal-Mart’s demands. This deadline to place RFIDs on each SKU is extremely costly. “Wal-Mart’s RFID Deadline: A Chunky Mess” says “leading consumer goods manufacturers will spend from $13 million to $23 million each in 2004 to comply with Wal-Mart's mandate”. Not submitting to this powerful and lucrative customer will be detrimental to one’s business and allow for competitors to gain a competitive advantage with the largest global customer. For most consumer goods companies, going against the grain is simply not an option. As I move into my new career in consumer goods, I am interested to see how General Mills responds and serves Wal-Mart as both a customer and as a superior.
Dignan, Larry. Wal-Mart’s RFID Deadline: A Chunky Mess. www.eweek.com. December 15, 2003.
Want, Roy. RFID: Key to Automating Everything. Scientific American. 2003.
Subscribe to:
Posts (Atom)
