SUPPLY CHAIN

Four Ways Cloud-Based Collaboration Can Help Retailers

BY CSA STAFF

By Jerome Malavoy, CEO and Founder, Trace One

It’s official. The cloud is here and it is not going away any time soon. Seventy percent of respondents to KPMG International’s Global Cloud Survey believe that the cloud is delivering efficiencies and cost savings today. Retailers have much to gain from moving to the cloud, and with the growing global marketplace, collaboration is one of the greatest advantages the cloud offers retailers. In fact, cloud-based collaboration can lead to several operational improvements for retailers involved in the private label market, including increased:

1. Transparency. Retailers need to be able to communicate with all partners in their supply chain, including manufacturers and suppliers. This requires a means of constant communication and the sharing of real-time information about products at all stages of development, from raw materials to the stores that receive the final products. Cloud-based collaboration enables this communication and information sharing by offering a central location for partners to connect. This gives retailers complete visibility into the supply chain, which in turn helps cut costs, reduce revenue leakage, save time and manage risk. Moreover, retailers with enhanced supply chain visibility are better positioned to avoid potential crises.

2. Consumer trust. With food contamination and product recalls making headlines on a regular basis, retailers are paying more attention to consumer trust and the reputation of their brands. With the visibility that cloud-based collaboration provides, retailers can easily access and share information about a product’s safety and quality with consumers, thereby increasing consumer confidence and brand loyalty. Retailers benefit from providing this information to customers online and with labels like “gluten-free,” “100% organic” and “non-GMO.” By making it easy for consumers to access key information about the products they consume, retailers experience increased sales and greater brand loyalty.

3. Compliance. One of the most apparent and important benefits of cloud-based collaboration is compliance. The increased communication that results from cloud-based collaboration makes it easier for retailers to ensure that their products and the processes through which they are created comply with supply chain and industry regulations. Imagine reaching out to each partner individually to obtain the appropriate documentation to certify compliance and ensure adherence to the constantly evolving deluge of rules, regulations and standards. Verifying compliance can quickly become a time intensive and tedious procedure – especially when dealing with global supply chain partners. At Trace One, we’ve found that the ability to collaborate via the cloud allows retailers and their partners to upload important documents like factory audits to a central, secure and easily accessible location at their convenience, significantly streamlining the process for maintaining compliance.

4. Efficiency or production cycles. In addition to compliance, cloud-based collaboration expedites product development processes across the board. In fact, nearly 40% of respondents to a recent survey conducted by Trace One said their organizations are 30% or more productive because of collaboration. Collaboration can help reduce time-to-market by streamlining processes and eliminating wasteful redundancies. Collaborating in a cloud-based platform makes it easier for all parties to see plans, designs and other important documentation, all in one place. As retailers across the globe know, tight deadlines are commonplace and missing those deadlines can cost a significant amount of money, cutting into the bottom line.

Occasionally, technologies come along and change the way business is done. There is no denying that the cloud era is upon us – it is no longer something just for savvy, early adopters. The scalability and flexibility of the cloud is drastically changing business practices across industries, and retail is no exception. Fortunately, the flexibility and visibility with the cloud makes it an ideal environment to foster retailers’ highly collaborative efforts. While the cloud requires an evolution – and saying farewell to legacy solutions – retailers who adopt cloud-based collaboration tools for their private label supply chain communications will undoubtedly benefit from greater transparency, consumer trust, compliance and efficiency – all key factors in a retailer’s bottom line.


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FINANCE

Acquisition costs hit Vitamin Shoppe profit; 60 new stores planned

BY Dan Berthiaume

North Bergen, N.J. – Vitamin Shoppe Inc. reported net income of $16.9 million in the second quarter of fiscal 2014, down 8% from $18.3 million in the same quarter a year earlier. Expenses related to Vitamin Shoppe’s March 2013 purchase of Super Supplements chain helped reduce the retailer’s net income.

Vitamin Shoppe plans to open approximately 60 new stores in 2014. Total net sales in the second quarter increased 10% to $306.2 million, compared to $279.5 million in the same period of the prior year. The retailer attributed its improved net sales to same-store sales growth of 4%, as well as growth in non-same-store sales, e-commerce sales and manufacturing revenue.

Vitamin Shoppe’s board has approved a share repurchase program that enables the company to purchase up to $100 million of its shares of common stock in the next three years. Shares will be repurchased from time-to-time in the open market or in privately negotiated transactions. Looking ahead, Vitamin Shoppe expects higher same-store and e-commerce sales growth in 2014.

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FINANCE

Euclid: July store traffic down, duration up

BY Dan Berthiaume

San Francisco – Shopper traffic declined 6% in July 2014 compared to the same month in 2013, due to real wage pressure, favorable summer weather, and a shift towards big-ticket item purchases, according to monthly benchmarks from in-store analytics provider Euclid.

Euclid analysis of tens of millions of U.S. shopper visits indicates a higher percentage of consumers made back-to-school purchases than the prior year and were very intent to buy, leading to the longest average duration seen in the last two years. Average duration increased 18% from last year. A higher percentage of shoppers made back-to-school purchases than the prior year and were very intent to buy, leading to the longest average duration seen in the last two years.

The best shopping day of July was Sunday the 27th. Outperformance was experienced across all metrics on the 27th, with especially favorable numbers for duration, engagement, and bounce rate. On the other hand, Friday the 11th was the worst shopping day of the month. Low traffic coupled with poor engagement marked this day and likely led to sales underperformance.

Looking ahead, Euclid predicts that the second half of 2014 looks promising for retail, estimating sales growth in the following retail verticals of:

  • Two percent growth year-over-year in general merchandise, apparel, furniture and other (GAFO) retail sales.
  • One percent growth year-over-year in clothing and apparel sales.
  • One percent decline year-over-year in general merchandise sales.
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