No Burial at NRF

Reports of the death of on-line retailing are much exaggerated.

No Burial at NRF

I read the same newspapers as you: Online retailing died at Christmas.

But that’s not what they were saying at the National Retail Federation’s Annual Convention. They were saying that the Internet had only been bruised by the collision; it would dust itself off and stay in the game.

For example, an Ernst & Young study released at the convention stated flatly that "the online channel isn’t just an option — it is an absolute necessity" for retailers and manufacturers. Angela Selden, managing partner of Accenture’s retail practice in North America (Accenture used to be Andersen Consulting), said that "a Web site ceases to be a nice addition of an experimental marketing channel for leading retailers ... it has become an imperative."

The best use of online retailing can be found in a multichannel organization that usually supports stores and a catalog operation, as well as a Web site, according to a host of speakers.

The Ernst & Young study was adamant about it: "A multichannel strategy is the key to success today and a critical driver for the future." (Recall that at NRF 2000, online shopping was predicted to run circles around stodgy stores. At NRF 2001, the brick-and-mortar retailers didn’t gloat, but merely stepped around dot-com corpses while they went about their business — which was to promote multichannel retailing.)

However, today’s online shoppers have some bad habits — or at least, some quirks that the retailers should be aware of. They comparison-shop for price and have become aware of shipping costs. They want to get the same brands online and from catalogs as they get in the stores. Likewise, the same selection and product quality. In short, the same (their favorite phrase) shopping experience.

But shopping reaches its peak when you mix in-store experience with online retailing. Deloitte & Touche sponsored a panel discussion, "Retailing 2005: All Things to All People All the Time," which was all about how much fun shopping would be in the future. But first, Bruce Westbrook, consumer business strategy and supply chain leader, Deloitte & Touche, explained just how bad things were now. "We’ve given consumers more SKUs and more channels. We’ve created complexity and confusion," he said. His solution: "We need a new approach to retailing." This approach will be the VIP shopping experience — virtual, interactive and personal. See, the retailer knows everything about your shopping habits, which are discussed back and forth with you via voice recognition during the (I’m getting hooked on the phrase) shopping experience.

Deloitte ran a videotape that showed a guy in a supermarket with an omniscient computer terminal mounted on his shopping cart. First he talked with his wife on a cell phone to get instructions, then signed on at the store and went interactive with the program. Not all the panelists bought this brave new world of shopping. "The attractive concept [shown in the video] is not always profitable [to the retailer]" objected Cathy David, GM, target.com, Target Corporation. She also voiced some real-world considerations: "Shopping is just one part of this picture. A lot of people are not going to use the Internet as their primary shopping method."

David had a point. Even in 2005, most shoppers will glare at the guy and his computer terminal when he blocks the aisle to read the items on his screen. But the video also made a point: The Internet is here to stay.

Online shopping didn’t get buried at the NRF convention. You’ll find it alive and well in multichannel retailing.

— Bernie Knill, contributing editor

Bringing It All Back Home

Sao Paulo, Brazil. Sydney, Australia. Tokyo, Japan. Just a few of the far-reaching locales that 3M’s Box Around the World visited during its journey leading up to Pack Expo International 2000. The promotion showcases 3M’s packaging integrity and global capabilities. Last month, MHM’s executive editor Clyde Witt had an exclusive interview with Mr. Box, during which the world traveler talked about his trip and the hazards of small parcel shipping.

Starting at its global headquarters in St. Paul, the box was shipped to five 3M subsidiaries. The box contained a digital camera, instructions and stickers representing each country the box visited. At each location the box was taken to a local landmark, photographed, re-sealed (guess what tape was used?) and sent to the next location.

Mr. Box finally got his photos back from the drug store and, like any traveler, is eager to show you some of the sights. If you want more information about the trip, container or sealing tape, call 800 722-5463. See the virtual scrapbook at 3m.com/packaging/packexpo.

Congratulations!

The James N. Gray Company has received the National Design-Build Award from the Design-Build Institute of America for its work on the Gap Inc. distribution center in Fresno, California.

The Automotive Industry Action Group (AIAG) recently joined an elite group of associations to become registered to the ISO 9001 quality standard. "We believe it’s important for our organization to operate under the same standards as our member companies," says Darlene M. Miller, AIAG managing director.

Conveyor Orders Index Down

The Conveyor Equipment Manufacturers Association (CEMA) reports that its November 2000 Booked Orders Index was 110, down 91 points, or a decrease of 45 percent from October. However, the November 2000 index represents an increase of 42 percent from the November 1999 index.

Trouble in Softwareland

Canada’s second-largest supermarket chain, Sobey’s, is hitting the delete button on the $89.1 million implementation of SAP AG’s business applications for retailers software. Sobey’s experienced a five-day database and systems shutdown in December that caused the company grief for a month. Apparently, that was enough for Bill McEwen, president and CEO, to pull the plug on SAP. The retailer was already two years into the software implementation and looking at another two years before the finish. Sobey’s plans to bring in another software program that can be installed more quickly.

IoPP Relocates

The Institute of Packaging Professionals (IoPP) has moved its headquarters to Warrenton, Virginia. Erin Edwards, chief operations officer, said the decision to relocate was based on the fact that Warrenton is a better location financially, and IoPP’s staff now has a less stressful commute as they travel against the horrendous traffic of Northern Virginia. The new phone number is (540) 428-2092.

Company Consolidations

Tuscarora Inc. and SCA Packaging International B.V. have executed a definitive agreement whereby SCA Packaging has acquired all the outstanding shares of Tuscarora. The transaction is valued at $284 million.

Pactiv Corporation has signed an agreement to sell its packaging polyethylene business to a subsidiary of Tyco International. The deal includes Pactiv’s stretch film operations.

Lift Truck Expansion

Wisconsin Lift Truck, one of the state’s larger privately held companies, is expanding with two new facilities. In Green Bay, a new 102,000-square-foot operation will include an operator training facility. A professional trainer will be on-site; a hands-on operator training room as well as a sit-down training area are included.

In the Eau Claire area, a new 15,000-square-foot service facility will offer repairs on lift trucks with capacities from 1,500 pounds to 30,000 pounds as well as aerial lifts with 100-foot-long booms.

Managers Making News

Jeff Radtke

has been appointed vice president, sales with irista, developer of order fulfillment and delivery software.

Drexel Industries LLC has appointed Stuart M. Bryan president and CEO. Bryan replaces George G. Landberg who retired and will continue to serve on the board of managers.

Lyon Workspace Products has appointed Robert W. Miller director of operations.

Edward H. Eisele III

was named to Shuttleworth’s board of directors. Eisele is a former executive of the Whirlpool Corporation.

Supply Chain Expo

Supply Chain Expo, the only national event to cover the entire supply chain, will take place June 11-14 at the Donald E. Stephens Convention Center, near Chicago’s O’Hare International Airport. This event has both an educational conference and an exhibition. This year’s event is focused on how companies can strengthen their supply chains to create a more powerful extended enterprise.

This year’s conference features more than 40 sessions in five tracks: supplier-facing solutions, customer-facing solutions, intra-enterprise solutions, e-commerce, and logistics.

Conference sessions are led by leading supply chain authorities from a broad range of companies, including Hewlett-Packard, Best Buy Company, Rockwell Automation, FedEx, Cooking.com, Imation, Lucent Technologies, interBiz Supply Chain Group, and Ariba Inc. Keynote presenters include: Edward Frazelle, Ph.D., president and CEO of Logistics Resources International; Helen Yang, vice president, Supply Chain Management, Worldwide Operations of Sun Microsystems; Garry Berryman, vice president-Materials Management/Product Cost, Harley-Davidson Motor Company; Jim Tompkins, president, Tompkins Associates; and Chris Mahoney, senior vice president, Corporate Transportation, United Parcel Service.

This year’s exhibition will feature a broad range of leading industry suppliers. In order to attract more professionals in the chemicals industry, the fourth annual TransChem 2001 tradeshow and conference will co-locate with Supply Chain Expo.

For more information or to register for Supply Chain Expo 2001, visit www.supplychainexpo.com; or call 800 964-9665 (in the U.S.) or (610) 458-7737 (outside the U.S.).

News from ProMat

Consultants were vocal at this year’s ProMat. Two issues in particular stirred passion: The need for a uniform conveyor specification and the trend toward vendor alliances.

Don Benson, Benson & Associates, outlined the Recommended Common Industry Practice and Guidelines for a Conveyor System Request for Proposal during his conference session. This document is a joint effort of the Conveyor Product Section of MHIA and the Association of Professional Material Handling Consultants. Benson discussed the project parameters a user should keep in mind when determining requirements for a conveyor system.

Several consultants exhibiting at ProMat told MHM they believe this spec is underutilized, and if end users took advantage of it, they could save thousands of dollars.

The Recommended Common Industry Practice and Guidelines for a Conveyor System

Request for Proposal can be accessed via the Material Handling Industry of America: www.mhia.org/apmhc.

Another consultant at ProMat was busy making waves with his ad in the Show Daily, protesting vendor partnerships and the conflicts of interest he says they promote.

"There is certainly a niche for firms that choose to participate in vendor partnerships," says Larry Shemesh, vice president, Gross & Associates. "Such arrangements may indeed offer benefits in terms of the expeditious implementation of a predetermined solution. The risk is that systems may be recommended as a result of bias and may not be the best choice for productivity, flexibility or cost efficacy."

Kaiden, commenting on the Show Daily ad, said he was happy this message was finally getting out.

"As independent-thinking as those companies might be, their business is to sell hardware," he said. "There are times the client needs a fast-track project and there’s no time for competitive bidding; then a single source can do a decent job. But from a consultancy point of view, if I can use some software and labor without bringing in some mechanical equipment to accomplish the same thing, my client may be better off."

New Names

Demag Cranes and Components Corporation

is the new name for Mannesman Dematic. Bill Persch, president, said at a news conference, "The Demag brand name is well known in the industry so we decided to return to our roots in identifying ourselves." The new company name will get a new graphic treatment while retaining the original gray and blue colors.

Alltrista Corporation has integrated four separate entities into the Alltrista Thermoformed Products Division, including TriEnda, the plastic pallet manufacturer. Bruce Buchholz, president, says the division is now the largest heavy-gauge custom thermoforming organization in North America.

Swisslog Translogic

is new name for Translogic Corporation. It joined the parent company, Swisslog, last fall. The company will continue to work in the supply chain of healthcare applications.

Through a network of subsidiary companies and partners, Global ID will offer a complete range of radio frequency identification services and products.

Economic Outlook

John Nofsinger, CEO, Material Handling Industry (MHI), told a packed news conference that in reviewing the past decade, it’s notable that the sustained expansion of the past seven years rebuilt the material handling and logistics infrastructure at an unparalleled pace.

"Overall," said Nofsinger, "while there is a great deal of uncertainty in the near-term, there is underlying confidence that we will not return to conditions like those of the 1991-1992 period. What tends to make the current softening misleading is the extraordinary levels of growth from which the softening has occurred."

FKI Logistex Forms Automation Division

FKI Logistex Automation Division

, comprised of two group companies, The Buschman Company and Mathews Conveyor, will provide end-to-end material handling systems for a broad range of supply chain applications.

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