SATO In The News: Floor Ready, Packing And Marking: Costs Of Non-Compliance


September 9, 2011

By Danika Manchester

We know what Compliance entails—ticketing, packing, labeling, and shipping merchandise correctly, with corresponding communications, and that compliance facilitates getting the correct merchandise as quickly as possible to the sales floor. While some Compliance Departments are used as profit centers, the cost of non-compliance is not just seen in Audits or Charge-backs, but in delays in getting product to the store shelf. Many Retailers view compliance as the method to which most cost effectively and quickly get merchandise to the store floor.

Where costs are incurred: at the distribution center.
When goods are not labeled or packaged correctly, or their carton labels cannot be scanned, they are set aside for processing. This delays the movement of goods to the stores. It also requires resources to be allocated to review and process the merchandise.

Where costs are incurred: at the store back room.
When goods are not labeled or packaged correctly, store associates need to re-ticket. This could be due to outdated information or missing tags. This delays the transfer of merchandise to the floor.

Where costs are incurred: on the store floor.
When the price ticket is missing or cannot be scanned, the customer may not select the merchandise. If they select the merchandise and it does not scan, then a store associate must call for a price check, delaying the Queue. Other customers may abandon their purchase because the delay is too long. If another item is not available to find the price, then the store associate may need to determine the price from a similar item, which opens the risk for a price difference, resulting in a possible loss of revenue to Retailer.

The solution is to pre-ticket goods at the item level, pack them at the store level, and carton label them for automated sortation. Include the Retailers value message-- Compare At, Multiples, and Anniversary Pricing, Retailer logo in color, Clear SKU, style and size information. With today's new more durable materials, print production methods, and adhesives, there is not a good reason for merchandise not to be labeled correctly for efficient processing to the Retailer. Remember—while your goods are set aside for manual processing, your competitors' products may be flowing right through to the store shelf!

From Vendor Compliance Federation seminars "All About Retail Compliance" Irvine, CA May 24, 2011 and Newark, NJ June 14, 2011

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