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Kodak Alaris bolsters board and exec team

BY CSA STAFF

Kodak Alaris Holdings Limited has named Brian Larcombe, Patrick De Smedt and Steve Webster as non-executive directors of the board.

Since the company’s separation from Eastman Kodak Company in Sept. 2013 it has focused on furthering its growth by adding key executive team members. The company appointed James Soames, most recently with Motorola Mobility, chief marketing officer. It also appointed John O’Reilly general counsel and company secretary.

“As we continue to drive Kodak Alaris’ transformation, these key appointments will be critical to the company’s success,” said Ralf Gerbershagen, CEO Kodak Alaris Holdings Limited. “The depth of experience of our three new non-executive board members will further strengthen the strategic business profile of our board. James Soames is an experienced media and technology marketer with a powerful mix of energy, ideas, customer focus, creative flair and solid commercial involvement. John O’Reilly, as our new corporate general counsel, brings considerable experience with legal, compliance, risk and business issues within large international corporate enterprises. With these appointments, I’m excited to introduce a new sense of dynamism and experience into our brand, marketing, legal and board capabilities.”

Larcombe’s executive career was largely with 3i, a leading international private equity investor. He headed its main investment business, became CFO in 1992 and after a successful IPO on the London Stock Exchange, was appointed CEO in 1997. He retired from 3i in 2004 and has since sat on the boards of many private and public companies and served on various business and educational councils. He is currently the senior independent director of Smith & Nephew (global medical devices), Gategroup (airline catering and other services), and Incisive Media (publishing). He is also a partner in a private equity business in India which invests in fast growing private companies tied to the growth in India’s consumer spend.

De Smedt’s career includes 24 years with Microsoft during which time he founded the Benelux subsidiaries, led the development of its Western European business and served as chairman of Microsoft for Europe, Middle East and Africa. After leaving the company in 2006, he served on the boards of a number of European public and private companies. He is currently a non-executive director of Victrex plc; Senior Independent Director of Morgan Sindall Group plc and Anite plc; a non-executive director of NextInto Germany and, an investor in several European technology companies. Patrick received a Commercial Engineering degree from the University of Louvain, Belgium.

Webster is a fellow of the Institute of Chartered Accountants. He is currently a non-executive director of Aventas Group, an internationally diversified industrial manufacturing business headquartered in Ireland where he is a member of the Audit and Remuneration Committees, and a non-executive director of Aqualisa Group, a leading shower designer and manufacturer in the U.K. where he is chairman of the audit committee. He has held a number of other non-executive appointments and was until recently a consulting member of the Gerson Lehrman Group Research Council. He was CFO for more than 15 years with Wolseley plc, a leading building materials distributor and a FTSE 100 company based in the U.K. with operations in 25 countries. Prior to joining Wolseley, he was a partner for more than eight years at Price Waterhouse.

Prior to joining Kodak Alaris, Soames held international leadership positions, including marketing director, U.K. and Ireland and director of marketing operations for Europe Middle East and Africa at Motorola Mobility, a Google owned company. He has worked with a range of iconic brands including Sky, BT, 118 and Motorola, and was instrumental in the launch of transformative technology brands including TiVo, Sky+, Sky Broadband, BT Vision and most recently Motorola’s Moto X, Moto G and Moto E smartphones. He earned a B.A. (honors) in retail marketing from Manchester Metropolitan University in 1992. He will be based at the U.K. headquarters in Hemel Hempstead.

O’Reilly has been assistant general counsel EMEA at Parker Hannifin since 2007. Prior to that, he held an international legal role at Rolls-Royce plc and six years in private practice in the U.K. as a mergers and acquisitions lawyer. As a member of the Law Society and a law graduate of the University of Manchester, he is a qualified solicitor. His position is effective in September. He will be on the executive committee and based at the U.K. headquarters in Hemel Hempstead.

On September 3, 2013, the U.K. Kodak Pension Plan (KPP) completed its acquisition of the Kodak Document Imaging and Personalized Imaging businesses from Eastman Kodak Company and created a new company known as Kodak Alaris. Licensed to use the Kodak brand, the new company and its name preserve the brand’s heritage and legacy, while focusing on strategic, ongoing investments.

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You are about to enter a dimension of size, weight, and volume

BY CSA STAFF

If the retail industry needed a catalyst for change, one that nearly mandates more efficient and sustainable packaging practices, FedEx recently provided the blowtorch to ignite it.

In the boldest pricing adjustment in almost 20 years, FedEx announced that it will use a dimensional weight formula to calculate rates on packages measuring less than three cubic feet. UPS followed suit quickly, and the policy is scheduled to be implemented by both carriers before the first day of 2015. This won’t affect holiday shipping rates, but it will impact many of the accompanying returns.

Today’s consumer has come to expect a delivery process that is both fast and cheap, adjectives in business that don’t usually mix, unless you're talking about fast food, ultra-low quality products, or businesses that don't stand the test of time. The "gimme now, ship it cheap" expectation has led to a retailing practice of waste riddled with costs and lost opportunities that FedEx and UPS are no longer willing to absorb internally.

Digital retail customers have been blooming for years in the form of quality products delivered to consumer’s front doors quickly and inexpensively. That party is about to end.

The FedEx and UPS rate changes shift the cost of inefficiency from carriers back to shippers and will force them to respond by either absorbing the incremental shipping costs, passing the costs to customers or optimizing packaging to minimize new costs.

Absorbing costs or passing them onto customers are ill-advised, so right sizing packaging is the a better option, but it requires the right expertise and planning to execute properly. Digital retailers should feel a sense of urgency to implement the necessary adjustments to their supply chains before the price changes take effect.

This upcoming holiday season is perfect for a “dry run” to test and optimize new packaging tactics. Retailers beware, if you don’t also optimize the return shipment packaging, the additional costs of inefficiencies could cost you two-fold. The day the changes take hold retailers must consider that most customers re-use packaging materials to send returns. Therefore, any shipped items whose return window is after the new year will probably be affected by the new rates.

Brace for impact
Before planning any changes, retailers must understand what the impact of dimensional weight policies will be. This free dimensional weight calculator makes it easy to determine precisely what the pricing looks like now. The general rule is that light and bulky parcels will see the most significant cost increases. Analyzing shipment histories provides a high level overview of bottom line impact, which may range from negligible increases in shipping costs to as much as 40% based on industry insights.

Understanding shipment volumes and weights provides a means to quantify the immediate effects of new dimensional weight pricing structures. It is important to know the types of items being shipped so that cost of damages and cost of packaging can be balanced to find the optimal packaging size for each item. For example, certain items can undergo simple changes such as shipping in padded envelopes instead of boxes with air pillows; for others, a holistic review of your packaging system may be necessary to maintain the balance of protection and “shipability”.

Right size the right way
When right sizing packages makes the most sense, there are many options available to help reduce the size of parcels. Experts abound in designing dimensional weight optimized packaging, and on-demand carton printing companies and corrugated suppliers can offer advice and provide necessary materials. Work with an independent partner to determine the best path forward.

Shippers should take advantage of the remaining time before the new rates take effect to test packaging options. Don’t wait until the busy holiday period, for an opportunity to conduct A/B tests of different packaging to determine the optimal mix of product protection vs. shipment costs. Smart retailers should already have all of the kinks worked out of their packaging before the new rates kick in.

Navigating the sea of options
These shipping rate changes will force the hands of shippers to become more efficient in how they package and ship their products. Like most everything else, shipping rates are negotiable. The dim-weight divisor used in the calculation of shipping rates can possibly be negotiated by shippers with significant leverage as a logical first step. But, don’t let that be the only step you take.

Though dimensional weight will change how rates are calculated for many parcels, the bigger pricing strategy will not change: it will still be based on origin-destination pairs zip codes. Shortening shipment distances by locating more supply closer to more customers can make sense and will continue to result in transportation savings depending upon your supply chain network. Reevaluating distribution center location and shipping lanes in light of the new dimensional weight pricing may provide a means to curb the incremental charges, but must be reviewed holistically.

It’s the perfect time to consider a supply chain network analysis to assess distribution center locations. Relocating your hubs can create an opportunity to use niche regional carriers. Remember, although ubiquitous, FedEx and UPS are not the only carriers in the market. Some shippers may realize even more efficiencies by adjusting shipment volumes away from these two major players and capitalizing on smaller regional carriers and the USPS, who have not implemented this dim-weight pricing structure.

Regardless of what mitigation strategies digital retailers implement to keep transportation costs in check, the biggest risk is proper management of customer expectations regarding product availability and price. The lure of free shipping has historically trumped delivery speed. The potential of higher shipping costs for parcel-sized purchases could drive more shoppers back to their brick and mortar roots when price savings no longer adequately counter the convenience of next-day delivery.

This new pricing structure is likely to be the biggest game changer in digital retailing for 2015. Which merchants thrive and which ones fail will largely depend on how successfully they understand and respond to impending shipping rate changes. These rate changes, the most significant since 1995, represent the biggest shift in procurement to consumers that digital retailers will face, including the birth of the internet.


Darren Jorgenson is Practice Leader of the Packaging Optimization Practice for Chainalytics. He can be reached at [email protected].

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Omnichannel is More Than a Buzz Word

BY CSA STAFF

By Joe Scartz, [email protected]

“Omnichannel” has become the buzzword de jour in retail circles lately and for good reason – ecommerce pure plays are now trying to do it too. Consumers are always shopping and looking for a way to trade product ideas, compare price and ultimately make the purchase via whatever medium works best for them, regardless of where they are.

You’ll read a lot of different definitions of “omnichannel” shopping but generally I define it as a seamless shopping experience where the consumer can move between digital devices, bricks-and-mortar locations and other outlets like connected kiosks or pop-up stores and find the same inventory at the same price with the same shopping cart and the same customer service. It’s an always on, always available shopping experience facilitated by a single retailer and shopped by consumers across several retailers.

This all started years ago but the accelerated move to “omnichannel” has been accentuated by the continued explosive growth in mobile and use of the shopping comparison apps popularized a couple of years ago by Amazon’s Price Check App, among others. In effect, the hastened move to omnichannel was forced by “showrooming” more quickly than it might have been without the in-aisle price checking phenomenon taking off.

Online retailers (some unauthorized) have continued to undercut the minimum advertised price (MAP) policies of many manufacturers and sell products at rock bottom prices through various online marketplaces. Retailers have responded to price wars with expanded inventory, price matching and better in-store and cross channel experiences. By moving to “omnichannel” strategies that take advantage of the best of each medium and, of course, by price-matching, retailers have been able to slowly fight back against insurgent ecommerce pure plays and this has resulted in, for the first time, some truly integrated “omnichannel” shopping experiences.

Mobile really enables “omnichannel” shopping and Macy’s and Best Buy are good examples of this. Macy’s is encouraging shoppers to scan their mobile app while in-store for more product information. Macy’s is also rolling out touch-screen check out kiosks in-store and running a TV campaign encouraging viewers to download their mobile app. Best Buy famously tore down the “showrooming” walls this past holiday season by calling their stores a showroom and inviting the process. They have heavily advertised their “in-store pick up” option through their shopping cart and elsewhere on Bestbuy.com.

Both massive retail chains are looking to engage the customer through personalized shopping experiences, relying heavily on CRM, unique offerings, spruced up bricks, technology utilized within bricks and consistent pricing and shopping experiences across platforms. Best Buy has also heavily promoted their price guarantee and has quietly rolled out an online marketplace where third-party listers can sell products via Bestbuy.com and increase their inventory without taking the inventory risk.

I recently was interviewed for an article in The Chicago Tribune that dissected the question as to why some online pure-plays were getting more into the business of bricks-and-mortars locations – permanent and pop up. The rationale for these moves by e-tailers is simple: 1.) shopping is an “always on” activity; second, 2.) expect to be able to find a great price anywhere; 3.) shoppers want to be able to browse and explore anywhere; 4.) brand awareness; and 5.) improved customer service.

In essence, mobile changed the game – first by inviting “showrooming” into the retail lexicon and second by introducing the masses to another buzz term “omnichannel.” Buzzwords or not, these terms reflect real shifts in behavior and the consumer shopping experience is getting better – fast.

Joe Scartz is the chief marketing officer at Digital BrandWorks, www.digitalbrandworks.com, a Chicago-based digital consultancy, which specializes in representing manufacturers in the digital marketplaces. He can be reached at [email protected].


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