Aligning Innovation

As retailers seek out solutions that provide visibility throughout the demand chain, they are relying on the expertise of technology partners.

Deena M. Amato-McCoy, senior editor of Chain Store Age, spoke with Kim Macaulay, VP global marketing and product management, Avery Dennison Retail Information Services, Information and Brand Management Division, who revealed how a recent acquisition is enabling the company to drive value for its customers as they look to Avery Dennison’s expertise and labeling technologies to increase responsiveness within their demand chains.

Chain Store Age: How has the RFID landscape changed the way retailers look at demand-chain visibility?

Kim Macaulay: Today, RFID comes up in every conversation. In terms of scale and item-level applications, European companies have put a lot of their attention here and done well. Marks & Spencer, for example, has a successful item-level program. However, the U.S. marketplace has not embraced RFID to the depth that Marks & Spencer and other European companies have, and that is disappointing.

CSA: What is the state of the industry when it comes to RFID projects?

Macaulay: Retailers want to be educated [about RFID], and they want to talk about it. They are curious about what it can do for their business and they want to learn which applications are right for them.

A few retailers are doing small-scale pilots to test out their hypotheses, but the big change for us is that technology vendors and partners, including our company, have taken on the role of educator and consultant. Over the last three years, that has prompted us to dedicate more resources to promoting RFID.

CSA: Adding new services often generates opportunities for more partnerships. What other trends are fueling acquisitions?

Macaulay: All companies, including retailers, brand owners and suppliers, are trying to compete in a global marketplace and competition is clearly increasing. Many companies are consolidating to gain market share and penetration in new geographies. Companies that are teaming up often have complementary strengths. The same is true between our customer base and suppliers.

Consolidation is also fueled by consumer behavior. Today, consumers have tremendous choices when purchasing goods. Our customer base is striving to create demand and re-generate new demand.

This means companies need to constantly reinvent themselves to capture consumers’ attention. We are committed to doing the same thing.

CSA: What is Avery Dennison’s perspective on mergers?

Macaulay: Our customer base is comprised of thousands of factories as well as retailers and brand owners, so we try to tailor our product offering to meet the needs of both. We pay attention to what products retailers need to manage operations throughout the supply chain, and we equally focus on the factories that serve them. We look for companies that can add to our product portfolio or geographic locations.

CSA: Why is your recent partnership with Paxar a “perfect fit”?

Macaulay: First, it strengthens Avery Dennison’s Retail Information Services Group. We are the second-largest business within Avery Dennison, and we are focused on expanding growth in the global retail-information and brand-identification market. We do that through three separate, but related divisions: information and brand management, printer systems and fasteners.

By blending the complementary capabilities and strengths of Paxar and Avery Dennison into a single organization, we will create superior value for our customers. This includes enhancing speed of service, improving product quality, global scale, presence and resources, and increasing responsiveness and customer-driven innovation.

CSA: What specific benefits will the acquisition provide?

Macaulay: Paxar’s global footprint will help us bring more services to our customers, and it provides the opportunity to invest in product development and innovation at a greater rate than in the past.

CSA: How can this help spur more interest for retailers pursuing projects such as RFID, for example?

Macaulay: We actively educate the marketplace, especially in the United States and Americas, about how RFID can help with enhanced supply chain visibility and profitability. Paxar’s success at item level has helped us tell the story, and we can demonstrate the benefits as we vertically integrate our product lines.