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RFID Moves Forward

BY Connie Robbins Gentry

It took three-and-a-half years to rack up the first billion RFID tag reads at T3Ci, but the next billion is just around the corner. Jonathan Golovin, chairman and CEO of T3Ci, told attendees at last month’s RFID Journal LIVE! Conference in Orlando, Fla., that his company analyzed its 1-billionth RFID tag read in February. But the pace is quickening, and within the next four to five months, Golovin expects to hit the 2-billionth read. (T3Ci, Sunnyvale, Calif., provides third-party RFID analytics and applications for suppliers and retailers.)

As adoption of RFID grows, applicability of the technology expands throughout the retail enterprise. Container security and tagging inbound cases and pallets are only the beginning. Benefits will be experienced throughout the product life cycle, from concept to consumer—with perhaps the greatest impact felt on the store floor.

At RFID Journal LIVE!, I talked with a number of suppliers and learned about new RFID solutions on the horizon. Among the hottest topics were in-store improvements, cold-chain control and applicability for closed-loop retailers.

At the store level, RFID has provided valuable insights into real-time promotion execution. Jasjig Mangat, head of business solutions at OATSystems, Waltham, Mass., delivered results from a six-month pilot study that indicated retailer compliance for delivering promotional displays to the store floor was only 56%, and a mere 1% of promotions actually executed on the intended start date. However, timely execution of a promotion, meaning it was begun neither too early nor too late, yielded the highest sell-through rate at 71%.

Another interesting store-level application is the continued evolution of the “smart shelf,” specifically the integration of RFID antennas into store shelves being facilitated by Vue Technology, Lake Forest, Calif. At RFID Journal LIVE!, Vue also introduced a completely mobile version of its RFID platform to streamline vendor-managed inventory, remote tagging and promotions compliance.

The conversations and presentations at RFID Journal LIVE!, while intellectually stimulating, were intensely technical and focused largely on the perspective of consumer product goods suppliers, with less emphasis on the retailer’s position.

I was reminded again that what is needed in our industry is a retail-centric forum in which retail executives and their trading partners can gather to discuss best practices throughout the product life cycle, from source to store shelf.

Later this month, retailers will have a chance to participate in precisely this type of event at the inaugural Supply Chain Summit, held June 25-27, at the Claremont Resort and Spa in Berkeley, Calif., and hosted by Chain Store Age and our partner ChainLink Research Cambridge, Mass.

In addition to T3Ci’s Golovin, who will present an in-depth case study on RFID analytics in the retail supply chain, attendees will hear presentations from Best Buy, Crate and Barrel, Tractor Supply Co. and Walgreens. For more information, visit www.csasupplychainsummit.com.

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Sears comps hurt by energy costs

BY CSA STAFF

HOFFMAN ESTATES, Ill. Sears Holdings today reported net income of $216 million, or $1.40 per diluted share, for the first quarter ended May 5, compared with net income of $180 million, or $1.14 per diluted share, for the first quarter ended April 29, 2006.

“In part, our domestic operating results reflect the impact of some of the same challenges being faced by our customers, such as rising energy costs and a slower housing market,” said Aylwin Lewis, Sears Holdings’ ceo and president. “However, as an organization, we need to overcome these factors by better controlling costs and developing innovative solutions that better meet our customers’ needs and allow us to generate a more reasonable level of profitability even in the face of such challenges.”

Domestic comparable-store sales declined 3.9% during the first quarter of fiscal 2007. Sears domestic comparable-store sales declined 3.4% for the quarter, while Kmart comparable-store sales declined 4.4%. We believe these declines reflect both increased competition and the impact of external factors such as rising energy costs, a slower housing market and poor weather conditions during the latter part of the first quarter of fiscal 2007. Kmart experienced lower transaction volumes across most merchandise categories, most notably within home goods, health and beauty products, and food and consumables. Similarly, Sears domestic recorded comparable-store sales declines across most merchandise categories and formats, with a notable decline in home appliance sales, which we believe reflects both a slower U.S. housing market and the impact of increased competition.

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Big Lots 1Q net sales up 3.4%

BY CSA STAFF

COLUMBUS, Ohio Big Lots today reported first quarter fiscal 2007 income from continuing operations of $29 million, or 26 cents per diluted share, compared to income from continuing operations of $14.5 million, or 13 cents per diluted share, in the first quarter of fiscal 2006. Including the impact of discontinued operations, first quarter fiscal 2007 net income totaled $28.8 million, or 26 cents per diluted share, compared to $13.7 million, or 12 cents per diluted share, in the prior year.

Net sales for the first quarter ended May 5, increased 3.4% to $1.13 billion, compared to $1.1 billion for the same period in fiscal 2006. Comparable-store sales for stores open at least two years at the beginning of the fiscal year increased 4.9% for the quarter.

For the second quarter 2007, the company expects income from continuing operations of 7 cents to 10 cents per share versus income from continuing operations of 4 cents per share last year. Comparable-store sales are expected to increase 2% to 4%, compared to a 5.2% comparable-store sales increase recorded last year.

For fiscal 2007, the company expects income from continuing operations of $1.25 to $1.30 per share versus income from continuing operations of $1.01 per share last year.

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