Wolfram Metro Future Store - rfidjournal.net©METRO AG 2004, Dr. Gerd Wolfram Electronic Shelf...

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The Executive Conference Produced by RFID Journal • March 29 to 31, 2004 • Hilton Chicago

From Promise to Reality

Executive Conference

Hilton ChicagoMarch 29 to 31, 2004


From Promise to Reality© METRO AG 2004, Dr. Gerd Wolfram

The METRO Group Future Store Initiative

Dr. Gerd WolframDirector of IT Strategy,IT Buying and Development Services,Metro MGI Information Technology

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Contents

1 The METRO Group Future Store Initiative

2 The Extra Future Store in Rheinberg

3 Results of the Boston Consulting Panel

4 Next Steps



METRO Group – One of the World‘sLargest Retail Groups

Management Holding

METRO AG

Cross-divisional Service Companies

Cash & Carry Food Retailing Nonfood Consumer Outlets Department Stores

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METRO Group – 2.340 Locations in28 Countries

AustriaC & C 12Media/Sat. 22Praktiker 5Sonstige 3

BelgiumC & C 7Kaufhof 15Media 2

BulgariaC & C 7

CroatiaC & C 2

Czech Rep.C & C 10

DenmarkC & C 4

FranceC & C 78Media/Sat. 18

GermanyC & C 112Real 253Extra 476Media/Sat. 258 Praktiker 288Kaufhof 133Others 215

GreeceC & C 6 Praktiker 7

HungaryC & C 12Media/Sat. 10Praktiker 14

ItalyC & C 39Media/Sat. 47

JapanC&C 2

LuxembourgPraktiker 3

MoroccoC & C 6

NetherlandsC & C 15Media/Sat. 11

PolandC & C 20Real 25Media/Sat. 17 Praktiker 16

PortugalC & C 10

As of September 30, 2003

PR ChinaC & C 18

RomaniaC & C 15Praktiker 1

RussiaC & C 6

SlovakiaC & C 5

SpainC & C 26Media/Sat. 16

SwitzerlandMedia/Sat. 14

TurkeyC & C 9Real 7 Praktiker 7

UKC & C 31

UkraineC & C 1

VietnamC & C 3



METRO Group Future Store Initiative –Jointly Elaborating Visions

Cooperation of METRO Group with SAP, Intel, IBM and othersPlatform for technical and process-relateddevelopments and innovations

Efficient retailing through implementationof future technologiesDeveloping visions on technologiesBenefiting customers, retailer, supplier

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Partner Companies – Strong Alliance

METRO GROUP SAP INTEL IBM

CISCO SYSTEMS COCA COLA DHL SOLUTIONS GILLETTE HENKEL HEWLETT PACKARD JOHNSON & JOHNSON KRAFT FOODSMICROSOFT NESTLÉ ORACLE PHILIPS PIRONET NDHPROCTER & GAMBLE SYMBOL VISA WINCOR NIXDORF

ALGOTEC ALPHA TONTRÄGER AVERY DENNISON BIZERBA BOSTON CONSULTING GROUP CHECKPOINT SYSTEMS CHEPCITTADINO EYCKELER&MALT FEIG ELECTRONIC FUJITSU SIEMENS COMPUTERS HINTZPETER & PARTNER INTERMEC KURT SALMON ASSOCIATES LIEBHERR LOYALTY PARTNER METTLER TOLEDO MULTIQ NCR OATSYSTEMS ONLINE SOFTWARE SONOPRESS WANZL METALLWARENFABRIK WMS



Contents




4 Next Steps

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The Extra Future Store –Testlab of the Initiative

• Extra Future Store in Rheinberg• Central building block of the METRO Group

Future Store Initiative– First Project– Application and combination of a wide range

of technologies in retailing– Test under real-world conditions– Testing acceptance of customers– World-unique experiment



Innovative Technologies in the JointTesting Laboratory

InfrastructureWLAN ServerContent Bus

ComfortShopping

In-Store Information

SmartCheck-out

RFID InventoryManagement

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Comfort Shopping: Convenient and Easy

Intelli-gentScale

InfoTermi-

nal

Pers.Shopping Assistant

Electr.Price

Labels

Electr.Advert.Display


ComfortShopping


SmartCheck-out




Advice and Service Made to Measure –the Personal Shopping Assistant (PSA)

Handy computer device on the shopping trolleyPersonalized customer loyalty card (“Extra Future Card”)

Personalization of shoppingDisplay of promotion campaigns and special offersFaster orientation in the store –“navigation system”Access to product information

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Info Terminals fill Customers in

Screens show interesting information on the corresponding product

Scanning of productsDisplay of detailed informationAdditional functions, e. g. recipes, with printout



Comfort Shopping with Intelligent Scales

Intelligent fruit and vegetables scale facilitates the weighing process

Automatic recognition of fruit and vegetablesWeighing the productsPrinting out the bar-code label

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In-Store Promotion throughElectronic Advertising Displays

Electronic displays directly point to current offers and promotions

Highlighting special offers and promotionsShowing short video sequences



Electronic Shelf Labels –Always the Right Price

Shelves are equipped with electronic price labels and continuously supplied with updated information

Direct networking with the check-out system; differing price indications are thus avoidedCentral control via radio signals

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In-Store Information: EnhancingEmployees‘ Productivity

Mobile Assistant


ComfortShopping


SmartCheck-out




Personal Digital Assistant (PDA) –Mobility for Employees

Optimum transparency regarding backstore and frontstore inventories

Barcode reader with access to the warehouse management system of METRO AGMail functionMobile access to e-mails, diary and contact data Linking the product with the advertising display via the PDA

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Smart Check-out: Facilitating theCheck-out Process

Self-Check-

out

PSACheck-

out


ComfortShopping

In-StoreInformation

SmartCheck-out




Self-Check-out: Managing Check-outby Yourself

New, fully automated check-out system accelerates the payment process

Customers manage the check-out process themselvesPayment at the machine (in cash or with a card)

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Comfort Check-out – Payment with thePersonal Shopping Assistant

Total price of the products scanned with the Personal Shopping Assistant is transmitted to the check-out system via radio signals

Customers scan products themselves while shopping in the StoreCheck-out system takes over the total priceCustomer pays, assisted by a cashier



RFID Inventory Management

SmartShelves

Logistics


ComfortShopping


SmartCheck-out


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RFID-Technology – ImprovingSupply Chain Efficiency

Radio frequency-based product lablesprovide realtime inventory data, new levelof product information and potential fortailored marketing

Accurate inventoriesOut-of-stock warnings systemRFID-based replenishment processes forwarehouse and storePersonalized advertising



RFID in Retailing

All cardboard boxes for the store andpallets are provided with tags

An RFID gate at the ramp reads eachpallet and each box that passes by thegate

An RFID gate at the ramp reads eachpallet and each box transported intothe storage area of the supermarket;reconciliation with the order; registration in the store system

Warehouse in Essen

I

II

III

Store in Rheinberg

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Tests on Pallet and Case Level

RFID-Portals

RFID-Chipson cartons and pallets

Preparation of RFID-Chips



RFID Data Management

SAPApplication

System

Future StoreNetwork

Delivery Monitor

Writing the Tags Exit and Entrance Portal In-Store Portal

Goods Flow

I II III

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SAP Portal – Tracking and Tracing

complete tracking control



RFID in the Store

All boxes are read as soon as they aretaken to the sales room; registration of the change in storage location

Products on the shelf are equippedwith tags; a shelf reader registers thelocation on the shelf; posts removal; advises of misplaced products

RFID readers at the InformationTerminals provide the customers withadditional information on the product

I

II

III

IV Exit readers ensure theft protection

Store in Rheinberg

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The Smart Shelf – Never Empty

Reading devices in the shelves recognize the RFID label on the products and automatically register when a product is taken off the shelf or placed in the wrong space

The shelves indicate when they need to be refilledThis way, all products are always available



Smart Shelf

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RFID supports the OptimalShelf Availability Process

• RFID supports ...– measurement of Out Of Stocks,– replenishment processes– accurate inventories,– shelf refilling concepts through early warning systems.

MeasurementManage-

mentAttention

Inventory accuracy

Replenishment system

Merchandising

Promotion management

Ordering System



Projects Yield Experiences andChallenges

• Individual settings Pilots, tests, QA• Technical know-how Strong partner• Standardization EPCglobal, GCI• Acceptance for benefits Internal promotor• Acceptance at employee-level Training• Process-changes New opportunities• Privacy concerns Open communication

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RFID – Customer Information hasHigh Priority

De-Activator

RFID brochure



Contents




4 Next Steps

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As Many as 77 % have used FSIApplications Already

At least 25 % of the customers have tested all applications

Use of a single FSI application

24 %28 %

62 %

48 %

77 %

At least one-time use

Source: BCG Market Research



Results of the Boston Consulting Panel

• Customers of the Future Store in Rheinberg show great interest in FSI applications

• As many as 77 % have used FSI applications already

• 50% of the non-users are planning a future use• The benefit of the applications is evaluated

positively• Even elderly and technology-averse customers are

using the applications• The percentage of use of the different appli-

cations ranges from 24 % (PSA) to 62 % (Intelligent Scale)


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Customers of the Extra Future Store in Rheinberg are More Satisfied!

DissatisfiedLess satisfied

Satisfied

Highly satisfied

Completely satisfied 15 %

19 %

60 %

4 %2 %

February 2003

22 %

30 %

42 %

1 %5 %

July 2003

The percentage of satisfied customershas increased from34 % to 52 %.




Growth in Sales and Number of Customers

• Strong growth in sales compared to the previous year • Growth in sales especially driven by higher frequency

– More than 30% new customers acquired– Frequency also skimmed from important competitors

• FSI as a competitive edge– FSI technology can act as a valuable customer retention tool for

customers with an affinity for technology

• Users of FSI applications are the more valuable customers– Higher sales/customer– Higher share of wallet


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Contents




4 Next Steps



Importance for the METRO Group

• The Initiative underscores the role of the Group as a pacesetterand driving-force for innovation in the retail sector.

• Benefits:– Modern technologies support the METRO Group in the systematic

optimization of its sales & marketing concepts– The Group benefits from globally unified technical standards in the

retail sector– The focus on benefit-oriented solutions is ideal for the customers of

the METRO Group and strongly supports the Group's collaboration withits partner companies

– The METRO Group adopts the position of a key protangonist in thedevelopment of visions and prospects for the future of the retail sector

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Successful Presentation at theNRF Retail‘s Big Show in New York

10.000 visitors at the booth of theMETRO Group Future Store InitiativeVery positive Feedback



Next Steps

• Roll-out of FSI-technologies– Self-Check-out– Intelligent Scale

• Additional test of technologies– Extra Future Store in Rheinberg– Additional Future Store

• Expansion of RFID Supply Chain Pilots– Pilot with CPG supplier– METRO Group RFID Innovation Center

• RFID Roll-out– Supplier Briefing May 14, 2004

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METRO Group RFID Innovation Center

METRO GroupRFID Innovation

Center

METRO Group will buildprofessional, world leading

RFID test lab

Test lab will be used byexisting and new RFID partners to test new

technologies before rollout

Test lab will be a commonplatform for compliance

and standards tests

The lab will provide an open project environment:

All sales lines of theMETRO Group are invitedto participate in testing

activities



• Experience the innovative technologies in the Extra Future Store in Rheinberg...

– Extra Future StoreMoerser Straße 2847495 RheinbergGermanyPhone +49 (0) 28 43 - 90 16 82Fax +49 (0) 28 43 - 90 76 87 8

• Or visit our websites!– www.future-store.org– www.metrogroup.de

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METRO GroupFuture Store Initiative –

Experiencing the Future ofRetailing Live

Wolfram Metro Future Store - rfidjournal.net©METRO AG 2004, Dr. Gerd Wolfram Electronic Shelf...

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