RFID in Retail: Embrace It or Fall Behind

It has been a favorite topic in the retail industry for what seems like 15 years. A constant theme that sounds more like a Game of Thrones trailer than a true industry development; “RFID is coming.” We’ve heard all the legendary promises of what it can do, what it will do, and the fundamental changes it will truly bring to the retail industry. Well, where is it? Is it finally here?

RFID has finally hit the retail market and is starting to make its first widespread impact for both online and offline retailers. Overall RFID technology costs have dropped, making the adoption for RFID much easier to swallow and bringing about true ROI for those who have integrated it into their systems and processes. Across the spectrum of retail, one can see a number of successful uses of this technology, such as making inventory counts faster and more accurate, using RFID for loss prevention and having true visibility into retail shrink, and making the retail environment interactive and more personal for the consumer.

With so many retailers starting to dive into the world of RFID, we begin to ask the questions, “will retailers who don’t adopt RFID fall behind? Will they be able to offer the experiences and customer service that consumers will begin to expect and demand of their brands?” It is a logical question to be asked and one that should definitely be explored as retailers are now evaluating the pros and cons of diving into RFID as organizations

Retail’s Future
When we look at the future of retail, we can see how things will undoubtably change: mobile phone checkout, shrink visibility, real-time inventory and display compliance, are all areas that are made functional only through RFID technology. For those retailers who are resistant to this change, they will have difficulty evolving and offering these types of service to their customers. Without accurate inventories, how will retailers offer services like BOPIS (Buy Online, Pick-up In Store) with any degree of confidence? What happens if retailers offer BOPIS and, because of bad inventory accuracy, have unhappy customers leaving their stores without products in-hand? How will that affect their customers’ brand loyalty?

We know BOPIS is here to stay so retailers must start updating their systems for offering this service. Statistics show that 67% of shoppers in the US have used BOPIS in the past 6 months. With this type of adoption, imagine the insights retailers can gain on their customers? Other statistics indicate that 88% of retailers who deploy BOPIS programs can track incremental in-store purchases from these customers. Also, it was determined that 98% of retailers who have adopted these programs say they’re getting additional in-store purchases from BOPIS users. Therefore, not only does this create a better experience for the customer, but it also creates additional sales. Without RFID, BOPIS is almost impossible to manage and execute with an acceptable level of success.


Retails Studies
Retail studies suggest that the biggest pain points for customers is the checkout process. Because of this pain, many retailers are evolving to some version of self-checkout or mobile pay checkout. These new evolutions make loss prevention even more challenging, with retailers having to decide whether to ditch the EAS hard-tag model in order to provide convenience to their customers, or deploy some self-detagging station, which is just another que that customers would have to navigate through. How long will stores be able to offer self-checkout at the expense of high shrink or a cumbersome customer experience? Well, RFID can curb these challenges. These RFID systems can read products walking out of the store and know whether they have been sold or unsold, thus resulting in accurate alarms. No longer do you need to have hard tags detached at the point of sale. Retailers can now have a system that knows when each specific product is sold, thus resulting in an “unsold” alarm at the EAS system. This is impossible to do without RFID technology.


The Cost
Not only has the cost of RFID deployment decreased, which opened the doors for implementation, but new services like BOPIS, self-checkout and 100% inventory accuracy has created a demand where RFID is now a must, not a luxury. One can see that product manufacturers are starting to source-tag their products with RFID labels, which will only help the implementation. Things are moving fast in the RFID retail world and the big question retailers must ask is, “do I begin the road to RFID, or do I watch as the future of retail passes us by?”

Interested in learning more aboiut RFID-based Loss Prevention? Contact Tom Bolanos

Outdoor Voices selects Nedap to unlock best-in-class omnichannel services

Boston, MA, September 5, 2019

Digital-first activewear brand implements RFID inventory management to improve web order fulfillment and on-shelf availability

Today Nedap announces that digital first activewear brand Outdoor Voices has selected !D Cloud, Nedap’s leading RFID inventory management platform. One of the key objectives within this deployment is achieving full inventory visibility. This implies that all items, whether located in the distribution center or in stores, are consolidated into one centralized inventory hub. This allows Outdoor Voices to further unlock omnichannel services, such as ship-from-store, without the need for separate stock in order to fulfill web orders and replenish stores.

“Outdoor Voices is a revolutionary brand that’s a prime example of fulfilling the omni-channel dream, merging the online and offline experience into one omni-channel”, says Rob Schuurman, President Retail Nedap Inc. “They selected the !D Cloud as a turn-key solution to further enable the omni-channel journey to their customers. One of the key objectives is achieving full and reliable inventory visibility throughout their retail chain to successfully deliver concepts like ship-from-store and BOPIS.”

Stores are community drivers and act as hubs for Recreation and #DoingThings
Nate Peterson, Vice President of Supply Chain at Outdoor Voices comments: “For us as a digitally native brand, it’s important that our online experience mirrors that of our shops and this plays an important part in our strategy of activating locally and amplifying digitally. Our job is ensuring that we have the key partners in place who can provide best-in-class experiences for our customers so that regardless of whether or not they purchase online or through our shops, we send them home with the apparel they’ve been looking for.”

RFID is a no-brainer
The Outdoor Voices team already had experience using RFID and knew the value it brings retail organizations. Kevin Harwood, Vice President of Technology at Outdoor Voices explains: “Nedap enables our store employees to better manage our omnichannel experience, where we can complete inventory counts with 99 percent accuracy and therefore expose our customers to every last unit available within our inventory. This coupled with the seamless integration of our newly implemented NewStore technology will ensure we can serve our customers wherever they are located, online or offline.”

Ship-from-store
As a digital-first company, online orders play a significant part of Outdoor Voices’ business. Order fulfillment therefore is crucial. One of the key results of the pilot project is that the amount of lost sales due to inaccurate stock dropped significantly. Web orders are located and picked from store shelves using Zebra RFID handhelds equipped with the !D Cloud app. Orders are then shipped from there when they are not available in the distribution center. In addition, in-store safety stocks can be lowered as full inventory visibility allows for efficient replenishment.
Besides the benefits to their omnichannel journey, the use of RFID allows for increased product availability and improved on-shelf availability that has ultimately transpired in a lift for Outdoor Voices.

Hilbert Dijkstra, Director of Business Development for !D Cloud Americas says: “Full inventory visibility paves the way to unmatched omnichannel services, allowing Outdoor Voices to continue their journey of building the No. 1 digital activewear brand. We are looking forward to continuing our partnership with this young and ambitious retailer, enabling them to do what they do best: grow their community and serve them in the best possible way. Wherever, on whichever social platform, and whenever they decide to buy”.

Learn first-hand how Outdoor Voices successfully implemented RFID and how this enables them to unlock omnichannel during Nedap’s Retail Round Table Event in New York City. Date: November 5, 2019 | Speakers: Nate Peterson and Kevin Harwood. For more information or to sign up, click here.

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Media contact:
Ilse Protsman
Marketing Communications Manager
 +31 (0)544 47 19 18
+31 6 55 41 51 67
ilse.protsman@nedap.com
www.nedap-retail.com 

Samsøe & Samsøe selects Nedap’s cloud-based RFID platform for European roll-out

The Netherlands, Groenlo, August 29, 2019

Full inventory visibility enables improved product availability in both stores and supply chain

Nedap, the global leader in RFID-based retail solutions, announced today Samsøe & Samsøe, one of Denmark’s fastest growing fashion retailers, has selected Nedap leading RFID platform !D Cloud, as a foundation for their RFID implementation. Known as an international brand rooted in Scandinavian simplicity, Samsøe & Samsøe is positioning itself to take RFID beyond the brick and mortar store walls in order to develop a future-proof omnichannel strategy.

Nedap’s !D Cloud enables Samsøe & Samsøe to achieve real-time view on stock levels and their precise location within the store, closing the gap between e-commerce and physical shopping. The application of RFID raises stock accuracy to a minimum level of 98% resulting in improved product availability and increased sales.

“One of our strongest brand values is simplicity,” said Tommy Nimand, CFO at Samsøe & Samsøe. “This is reflected in the design of the collections and is also a major aspect in our shopping experience. Our goal is to achieve full stock visibility through RFID, whether it is in our warehouse or in stores. Solving the out-of-stock challenge unlocks full omnichannel potential and creates the ultimate customer experience across all boundaries in retail. We want our customers to be able to shop everywhere and return anywhere, whether an item is purchased in Copenhagen or in London.”

Virtual Shielding™
The newest feature within Nedap’s !D Cloud platform, Virtual Shielding™ (patent pending), benefits Samsøe & Samsøe by allowing store staff to easily read RFID tags by using RFID handheld devices and automatically determine the exact location within a store of RFID tags in an accurate way. This smart allocation technology solves the problem of reading RFID tags through walls and eliminates the need for physical shielding by equipping stock rooms with aluminum foil or RFID blocking paints. This feature saves retailers both time and money.

Guaranteed stock availability in clean flagship store interior
Samsøe & Samsøe’s newly opened flagship store in Copenhagen is designed according to a minimalistic store concept. “In order to ensure the store’s clean look, the number of displayed items is limited to two pieces per style. Nedap’s Virtual Shielding functionality determines which items are located on the store floor and which items are kept in the stock room. This ensures a clean store ambiance, the best customer experience, and ensures we don’t lose a sale due to stock inaccuracy,” said Nimand.

“We are delighted to work with Samsøe & Samsøe because they are committed to an innovative omnichannel strategy that serves their customers,” said Elles te Boome-Harbers, Global Sales Business Developer at Nedap Retail. “Using cloud based RFID as their ‘common language’, enables us to align involved suppliers of such as labels, ERP and POS systems. This ensures the ability to track individual items throughout the entire supply chain” explains Elles te Boome-Harbers. “We are looking forward to further aligning their internal processes to meet customers’ future needs and demands, safeguarding true omnichannel retailing.”

RFID-based Electronic Article Surveillance
In addition to RFID for stock management, Samsøe & Samsøe store entrances are equipped with Nedap iD Top RFID-based overhead EAS systems. This safeguards a high levels of security while maintaining open store entrances. All Samsøe & Samsøe items are RFID tagged at the source of production. This means that no additional loss prevention is needed, as stock is already 100% security tagged. This eliminates additional in-store tagging costs.

Learn more about Omnichannel Retailing and join Nedap International Business Developers Madalynn Lauria & Adam Sheppard in a new webinar on how to tacke the Omnichallenge. Click here for more information.

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Media contact:
Ilse Protsman
Marketing Communications Manager
 +31 (0)544 47 19 18
+31 6 55 41 51 67
ilse.protsman@nedap.com
www.nedap-retail.com 

Nedap’s Orange Wavers: Meet Corey Daff

At Nedap, we are proud of the team that serves our customers. Each team member is a product-knowledge expert and enjoys every customer interaction. At Nedap, we are committed to being transparent in our approach to building relationships.

With this in mind, we’d like to introduce you to Corey Daff, Account Executive for Nedap:

How long have you’ve been with Nedap?
Although I’m fairly new with Nedap, I brought with me many years of experience in the technical space, as well as love for exceptional customer service. That’s why Nedap is a great fit for me.

What are your career highlights?
I was an IT Headhunter for 4 years post-college.

I also spent a couple years selling Oracle ERP/SCM/HCM/ back office software prior to moving into the Cyber Security software world.

What makes you successful?
I come from a very blue-collar family in Massachusetts and I feel that my work ethic and attitude towards hard work is what has made me successful.

Describe your passion for customer service.
Customer service most directly shows in my constant desire to be the best I can be. I always enjoy looking for and thinking about ways that things can be improved, especially when it comes to those who are close to me and I think this echoes in my relationships with my customers.

What do you think is the coolest feature of Nedap’s product suite?
Our dynamic beam steering ability is up there, as it allows our RFID-ready retailers to address loss prevention by leveraging the same RFID technology that drastically improves their stock/inventory management.

What’s the biggest challenge facing retail in your opinion?
With the current generation of buyers in the marketplace today, I think the customer experience that brands provide is of critical importance. I think the biggest challenge they are faced with is how to create an experience that allows their customers to seamlessly interact with the brand, whether at a retail store or via devices. The patience of the current generation of consumers (which I certainly fall into myself!) is exceptionally low, and the cost of brand loyalty is increasing, so retailers are going to need to find a way to grant more, for less.

What would your best friend say is your best quality?
To be honest, I guess I should ask them! I would have to guess that they would say either my enthusiasm or my loyalty as a friend.

What’s the last book you’ve read?
The Salt Fix, which is a super-interesting read for a health/fitness nerd like me. Specifically, it speaks to the impact of sodium on health and performance.

What is your favorite place in the world?
Growing up, my favorite place was the cabin my grandfather built in the woods of Maine. However, I would say these days I couldn’t deny that my favorite place to be is on the slopes!

What is your favorite movie?
I think my favorite that I’ve seen lately would be Ex Machina.

What is your favorite music?
Lately there has been a lot of The Black Keys in my life.

If you had a superpower, what would it be?
I’d love to be able to teleport to work, back home, to the fridge to get a snack – that would be ideal.

Come meet Cory and the other Orange Wavers at NRF PROTECT booth 830!

Nedap Retail Announces Partnership with Product Protection Solutions in the United States

Leading provider of retail security solutions will become Nedap’s newest partner throughout the United States.

Wakefield, Massachusetts, March 18 2019

Nedap, the global leader in RFID retail solutions for the retail sector and Product Protection Solutions (PPS) have announced a strategic partnership. Product Protection Solutions, a leading provider of retail security solutions will become Nedap’s newest partner throughout the United States.

“With the electronic article surveillance market climbing exponentially, this union marks the beginning of streamlined services, innovative solutions and unmatched customer satisfaction initiatives.” said Christopher Cox, CEO of Product Protection Solutions. “We look forward to our partnership with the global leader in RFID.”

Rob Schuurman, CEO at Nedap Retail, stated, “With extensive experience in the application of RF and RFID technologies throughout the loss prevention, electronic article surveillance, and supply chain arenas, the PPS team is a powerful ally to have.”

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About Product Protection Solutions
PPS was founded to bring urgency and innovation into retail security enabling industry professionals to focus on the ever-evolving retail landscape and individual enterprise priorities. Our mission is to fill the gaps created by traditional loss prevention solutions through the employment of superior product protection solutions. Innovation coupled with experienced and personalized consultation amplify our ability to save our customers money and secure their bottom line.
For more information, visit www.ProductProtectionSolutions.com or call 888-542-3065.

About Nedap Retail
Nedap is the Global Leader in RFID-based Retail solutions. Nedap helps retailers permanently prevent losses, optimize stock levels and simplify the multi-store retail management using RFID. Nedap’s RFID software platform gives retailers real-time item-level insights into their stock levels and the exact location of each item. Using these real-time insights, retailers are able act much more agile, offer customers a better shopping experience and uplift sales.

Media contact:
Robin van Stenis
Director Global Marketing
Robin.vanstenis@nedap.com
844 US NEDAP
www.nedap-retail.com

America Today selects Nedap’s RFID solution

First RFID rollout on the Dutch retail market

Groenlo, The Netherlands, 19 January 2019

Fashion retailer America Today, part of Coolinvestments, has decided to implement Nedap’s !D Cloud RFID software at its 69 stores in the Benelux countries to structurally raise stock accuracy and, as a result, guarantee product availability. The rollout is planned for the second half of 2019.

Looking for the business case
In the autumn of 2018, America Today started a pilot together with Nedap in 3 stores, to investigate whether there was actually sufficient basis for a business case. During the course of the pilot, a weekly stock count was performed using the !D Cloud software and a RFID handheld reader, which resulted in an improvement in stock accuracy from 75% on average to 98%.

Jonathan Kahn, CFO of America Today, explains: “We realised that our stock accuracy was going to be a huge bottleneck for our omnichannel ambitions. That is why we started investigating, together with Nedap, whether we had a business case, and it turned out that we actually had one. We opted to follow the GS1 standards, so as to offer the cooperation with all our Supply Chain partners more opportunities in the future. We are fully convinced that RFID will be a great help to us in gaining more insight into and control of our stock.”

Arjan Pruiksma, Business Developer at Nedap Retail, adds: “We are very pleased that America Today has become the first clothing retailer in the Netherlands to implement RFID with Nedap. Similarly to other retailers, America Today does not have reliable stock data, which prevents it from truly integrating its stores and online channels. We are really looking forward to starting this RFID journey together.”

Stock accuracy with RFID
Nedap’s !D Cloud software suite is a SaaS (Software as a Service) solution which was especially developed for the retail sector. The software provides insight into stock levels and the exact location of each item. This also provides the basis for omnichannel concepts such as Click & Collect and Ship-from-Store. Kahn: “Our biggest driver is omnichannel, but a technology like RFID really tempts you to do everything at once. We opted to place our initial focus on maximising results with the lowest possible level of complexity. The first results are very promising, and the stores are enthusiastic as well. We cannot wait to get started.”

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Media contact:
Robin van Stenis
Director Global Marketing
EU +31 6 25 24 95 24
US +1 (781) 557-8002
robin.vanstenis@nedap.com
www.nedap-retail.com

The pizzafication of Fashion Retail

I try to live a healthy lifestyle; I run a lot, I don’t smoke, eat a varied diet and limit my alcohol consumption. But, if there is one thing that is my guilty pleasure it is PIZZA. And the good thing about pizza; if you want it, you will have it delivered to your house within 30 minutes. Luckily, there are more and more ‘pizzaficated’ healthy options for a quick home delivery, but the pizza has been the good old option for a lazy day food delivery.

The rise of those delivery services, or pizzafication, for food has seen a quite steep incline over the last few years. The on-demand society of today expects to have the food they want delivered to their house within a timely manner. And not only ready-to-eat food is ‘pizzaficated’ but also your groceries are delivered to your house with Amazon Prime now.

As a millennial, I love this pizzafication, I expect to have the products I need, delivered to me fast, ideally within the hour but ultimately the same day (I am fully aware that this probably sounds very spoiled).

So, a few weeks ago I was relatively late with buying my sister her birthday present and went online to buy her a nice sporting hoody. Luckily, the retailer offered ‘Buy Online, Pick up in Store’ (also referred to as Click & Collect) so I thought I was saved by the bell and purchased the item and went to the store to pick up the item. I was caught by surprise however when I read in the confirmation email that I could not pick up the hoody right away, but that it was shipped to the store and would arrive in 3 business days, which resulted in a disappointed sister when I arrived empty handed at her birthday party; the pizza was cold when it arrived.

Within fashion retail, the pizzafication has clearly not been fully adopted yet. Many retailers offer BOPOS or Click&Collect, but typically send this to the store from their warehouse and don’t fulfill these orders directly from their store stock. More and more retailers are displaying their stock online, but exclude half of their products, because they have to apply a safety stock to guarantee the item is available. And ship-from-store is a wish that most retailers have but this often results in split shipments and late deliveries to the customer. For some reason, the pizzafication in the fashion retail world hasn’t been as easy as the delivery of a pizza.

For brick&mortar retailers, the pizzafication is the ultimate answer to the online retailers enabling deliveries within the hour, which easily beats “next day delivery”.

One of the biggest challenges that is slowing down the pizzafication in the retail sector is the stock accuracy. In order to be able to fulfill an online order from a store and send it to the customer within the hour, you want to be 100% sure that the item is available. Unfortunately, this is not the reality for most retailers today and they are typically faced with a low stock accuracy of 65-70%. Clearly this is a problem that needs to be solved first to ensure that the right ‘pizza’ is delivered.

Luckily, there is technology to the rescue. RFID has proven its track record over the last years and enables retailers to increase the stock accuracy and to unlock their omnichannel potential. Hopefully next year, the pizzafication within retail is reality when my sister celebrates her next birthday.


Author: Hilbert Dijkstra – Director of Product Management

Interested to learn more? Simply connect with Hilbert on LinkedIn or fill in this contact form.

Introducing Tom Bolanos: Account Executive & RFID Expert

Tom Bolanos, Account Executive, first joined Nedap nearly two years ago, bringing a wealth of knowledge in the RFID space. His extensive experience includes working for an RFID label manufacturer and providing RFID hard tags and labels to various industries before joining the Nedap team. This makes Tom an incredible asset to Nedap’s customers who may be curious about the best practices of tagging.

“What makes me successful is a simple philosophy I have each day I go to work,” said Tom. “My entire mission is to learn. I learn how my customers approach technology, how they typically go about solving their challenges, and how their business operates daily. This puts me in the best position to provide only those solutions that fit within my customers’ operations, and their future roadmap of technology.”

When asked what he likes about working for Nedap, Tom explained, “I absolutely love working for a company who is on the cutting edge of RFID technology. Because of Nedap’s global footprint, the experience levels within the organization allow for a top-of-the-line support team. Because of this, Nedap already has a developed tried and true solution for nearly any challenge our customers face. This is something none of our competitors can offer.”

On a more personal note Tom enjoys playing golf, a sport he took up at age fifteen with his high school team and continued throughout his college career. That means that if you’re looking for someone to beat in golf, Tom is probably not your guy! His best golf score is 66, which he achieved on two separate occasions.

When asked what he feels his best qualities are, Tom simply stated, “I do what I say I’m going to do, when I say it. It may sound simple, but so many people fail to deliver on even the simplest commitments. I take pride in meeting all deadlines I commit to because there’s no better way to show my customers I care.” 

Want to know what RFID can do for you? Click here to ask Tom! 

How RFID enables O2O retailers to truly unlock their omnichannel potential

Warby Parker, Everlane and Bonobos are some of the most prominent examples of O2O retailers; online retailers that open stores in the offline channel. Those O2O retailers are omnichannel at heart; their offline stores extend their online brand and this extra channel allows them to offer the customer experience that they can’t offer online. Therefore, often the focus in those stores is on brand experience.

“As a business owner, your duty is, above all, to bring value to the customer in new ways. Yes, the internet will always beat retail in cost-efficiency, but it will never measure up to the rich, real-life experience of being in a physical store.” Forbes

Online vs. offline discovery – commerce in the physical world
O2O brands often recognize that a lot of the discovery happens online while the actual commerce often still happens in the physical world. Because of their innovative character those O2O brands also have an innovative approach to their retail operations with a strong focus on creating a great store experience to inspire their customers when they are in their stores and use their stores to build a community. In general, the offline locations of those O2O brands can be divided into three categories:

  1. Showroom: stores do not carry stock , but have some sample items that customers can discover – see and touch.
  2. Outlet: stores carry the leftover stock that has not been sold online.
  3. Retail store: stores carry stock and shoppers buy the items there and then and take them home.

For O2O retailers with model 1 and 2, the inventory management is relatively simple and straightforward. In the ‘showroom’ model, customers can order items in the store or online, which are then shipped to the store or delivered to the customers home. In the ‘outlet’ model, retailers basically push their leftover items to the stores, which are then sold at a discounted price. Typically, there is no further integration with the retailer’s online channel.

The retailers with model 3 are opting for the more traditional retail model with instant gratification – customers can buy the items right there and own them now. However, all of a sudden the O2O retailers are faced with traditional retail challenges around, for example, inventory management. They now need to make sure that the items are allocated to the right location and are available when they are needed. In fact, by opening physical stores, they are introducing a new level of chaos in their operations.

When they were operating online only, the retailers were the only ones that were touching their inventory until it was delivered to the customer straight from the warehouse. When introducing physical stores, there are now more people interacting with their items in the store. Store employees are handling the product for retail processes but also customers interact with the products which introduces even more inaccuracies.

Deal breaker for omnichannel
The chaos that comes from the offline operation is a potential deal breaker for the omnichannel ambitions of those O2O brands. Their stores need to be an extension to the online experience and are a critical touch point for those new brands. Customers that come in to try on the items they liked on Instagram will be disappointed if the item is not available in the store. The loyal customer that travels to the store to pick up their outfit for the party they will attend later that day will be a lost loyal customer if the item is not available in reality.

On the flipside, those relatively young retailers have a huge potential and an even bigger opportunity coming from their offline ambitions. The more traditional retailers have been putting systems in place over the past decades to ‘fight’ the chaos. Having no legacy systems in place creates an opportunity to choose for modern technologies and easily integrate them into their processes and systems.

One of those modern technologies that significantly reduces the chaos is RFID. RFID allows retailers to increase stock accuracy, lower safety stocks, increase product availability and enable omnichannel through perfect inventory visibility. Knowing what you have and where it is lets customers shop anywhere and return everywhere. Inventory visibility enables retailers to:

  • Prevent out-of-stocks
  • Offer omnichannel services (e.g. ship-from-store or click&collect)
  • Offer flexible return options

In an omnichannel dream there is no place for the chaos that originates in the retail store operation. RFID helps to bring order back into the chaotic world of retail by giving full inventory visibility. O2O retailers have the opportunity to start from scratch and make their omnichannel dreams happen, as long as they choose the right technology foundation for their dreams.


Author: Hilbert Dijkstra – Director of Product Management

Interested to learn more? Simply connect with Hilbert on LinkedIn or fill in this contact form.

Winning Over The CFO: 6 Most Common CFO Objections

Seasoned Loss Prevention executives know that when attempting to acquire funding for a new LP initiative or solution, they must be prepared to answer some tough questions and possible objections from their CFO, as well as other senior executives.  A common best practice to prepare for these objections is to consult others within the company who have had experience going through this same capital request or budgetary process.  Often times coworkers can share the objections or tough questions that were previously asked of them.  LP professionals can use that knowledge and anticipate other similar scenarios, then practice viable responses.

What if an LP professional does not have someone to consult? 

Here is an opportunity to review some common questions and objections LP executives may encounter when asking for budget allocations or capital for a new or upgraded LP initiative. For illustration purposes, we’ll use the installation of Nedap’s EAS system with RFID capability as the LP initiative being proposed.

 CFO Question: What are the operating costs?

 LP Executive Answer: “Rather than continuing down the path of standard EAS, Nedap’s system is much more intelligent.  It will allow us to use the EAS system as more than just a deterrent to theft, as it provides Retail Analytics.  However, any slight increase in costs when compared to our current LP solution will be more than covered by the increase in sales we will realize due to having product on the shelf as a result of the reduction of theft, as well as the added benefits of RFID technology.  Therefore, this LP solution is well-suited to ensure we reach our break-even point within the first 10 months of the fiscal year.”

CFO Objection: We have other priorities right now. Maybe next year!

 LP Executive Answer: “We understand that one of the biggest challenges of any senior executive is how to justify spending capital on an LP solution, especially when shrink has improved over prior years.  However, it is important to note this LP solution doesn’t only reduce shrink.  It also reduces labor, provides crucial insight into what is being stolen so we can ensure proper replenishment immediately, and provides a wealth of other analytics that can be used by operations, marketing, and Loss Prevention.  Since all of these areas are priorities for us, it is imperative to integrate this LP solution.  By reducing theft, we will decrease turnover, increase average transaction size, and increase same store sales over last year.  With this improved in-stock position, customer satisfaction will undoubtedly improve.”

 Ever heard these common objections?

  • I don’t want to burden the store employees. The have enough to do!
  • This LP solution will NOT improve sales.
  • That sounds like a huge operation! We don’t have the capacity for that right now!
  • This LP solution requires additional hardware and capital expenditures.

For the answers to the above objections and more ways to win over your CFO, click here to download, “Winning Over the CFO – A Practical Guide for Loss Prevention Executives” by Nedap Retail.

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