Avery Dennison becomes exclusive RFID technology partner of Brazilian beauty group Grupo Boticario

As the second largest cosmetics company in Brazil, Grupo Boticario has the largest beauty franchise network in the world. Its sales business covers beauty, perfume, skin care products, etc., and operates a business including branded retail Stores, online channels, direct sales and other retail partners. A large comprehensive supply chain including.

As we all know, supply chain management has always been a huge challenge facing the beauty industry, especially for brands like Grupo Boticário, which have achieved double-digit growth in Latin America and the United States. Common problems include low inventory visibility, out-of-stocks, The product loss rate remains high, product circulation is slow, and demand estimates are inaccurate. As the supply chain becomes larger and larger to cope with the continuous growth of business, Grupo Boticario decided to digitally transform the supply chain management system to achieve end-to-end item-level commodity traceability. Ernst & Young was entrusted by it to provide the best technical matching consulting for this project.

After evaluating options such as infrared, ultrasound, video and 2D barcode recognition systems, Ernst & Young and Grupo Boticario agreed that RFID was the best supporting technology. With the collaboration and support of the company's human resources department, logistics department, operations department and leadership, the project team finally selected 10 priority application scenarios for the use of RFID, and began to collect data for six months starting from the third quarter of 2018. test.

The decision-maker selected Avery Dennison as a partner after comprehensively evaluating multiple factors. Avery Dennison has specially designed the properties of metal packaging and liquid products in the beauty industry to overcome technical difficulties so that RFID tags can be quickly and accurately read on metal or liquid packaging. Not only does it achieve Item-level identification in relatively intensive beauty sales scenarios, and it can also be applied to carton identification when the goods leave the distribution center and enter the store receiving process.

Before the test began, the project team built an independent, RFID-based system for testing: the distribution center and store programs ran together with the Grupo Boticario server middleware, and all distribution center processes and store operations were also run on the same on middleware. Stationary readers are used to scan RFID tags located in distribution centers, store clerks use handheld readers for inventory tracking in stores, and tablet readers are used at checkout counters. The above tests all comply with the GS1 EPC UHF standard.

The top priority of the project is to locate tags on more than 2,000 inventory items and multi-category products. Label testing was conducted under different conditions, while working with Grupo Boticario's packaging designers to ensure the visual aesthetics of the packaging without affecting label performance. To date, more than 1.2 million items have been tested.

In this test, RFID tags were applied to the goods before they were shipped from Grupo Boticario's distribution center. The staff at the distribution center first scans the SKU number of each item in the carton and enters the information for each delivery box. The Avery Dennison ADT1 printer is then used to print out the RFID tag with the SKU number of each product and affix it to each product and delivery box. Finally, before shipping, staff inspect each carton again to ensure they are tagged with an RFID tag containing the product's SKU number. (As part of the test, the project team also tested whether the packaging line of the Grupo Boticario factory, where the goods are packaged and attached with RFID tags, can help staff quickly read the cartons in a few seconds, just like in the distribution center. (Hundreds of items in it.)

Finally, the cartons were delivered to four test stores: two retail stores and two wholesale stores (salesperson direct sales points). In these stores, RFID systems are used to improve five major processes: receipt, replenishment, inventory counting, checkout and demand forecasting.

·One scan can obtain full box product information covering up to 400 items, making delivery faster and more accurate.

·The store's database divides goods into "warehouse goods" and "shelf goods" so that the needs for shelf replenishment are clear at a glance, and it becomes more convenient to track the movement of goods from the warehouse to the shelves.

·Promote sales and reduce waste: RFID warning information for expiring products allows store staff to take measures such as discount sales as early as possible

·At the checkout counter, all purchased items can be scanned and read in one go

·Demand planners can timely replenish goods and make sales forecasts based on comprehensive and accurate data

The test results exceeded expectations. The expected 50% reduction in the out-of-stock rate was actually achieved in participating stores by 78%-97%. RFID was used to help find more than 50% of the products that were lost in the original system. At the same time, the man-hours spent on managing inventory have been reduced by 14%, and the store's revenue has also increased a lot compared to when RFID was not used. It can be seen that RFID is indeed effective in helping stores improve inventory accuracy and eliminate out-of-stock phenomena.

  Bob Pernice, global director of market development for Avery Dennison, said, "The beauty industry is discovering the advantages that RFID has already played in the apparel industry - item-level labeling solutions have greatly improved inventory accuracy and promoted sales growth. ", he said, "The inventory distortion rate in the apparel industry is 35% on average, while in the beauty industry, this number is as high as 50%. This is because beauty brands and retailers operate more inventory units (SKUs). In a Library-self-service-borrowing-and-returning-machine-source-manufacturer-UHF-touch-screen-borrowing-and-returning-machine.html target='_blank'>self-service shopping environment, inventory depth is usually insufficient, and the product churn rate in the beauty industry is also higher. In addition, beauty consumers usually have high brand loyalty, and when a certain category is out of stock, they generally will not consider using alternative brands. For example, if a dark lipstick or eyeshadow is often out of stock, the store system and store staff usually cannot notice it in real time, which will directly lead to the loss of sales and customers, especially when retailers link physical store inventory data with e-commerce. , the negative effects are more obvious.”

“Confidence comes from working with global technology leaders” - Grupo Boticario

Avery Dennison has leading RFID technology and forward-looking industry solutions, and its unique technology development for the beauty industry has given Grupo Boticario management great confidence.