KM makes inroads into retail

Also, the tags themselves don’t provide retailers with any additional information until the back-end technologies for traceability and analysis of the RFID information are added, which has yet to occur, according to Mullen.

He expects a large increase in use of RFID in the next year or two, as the technology works its way from the back end of the distribution chain further into the front end. Although not as advanced as the Metro system, Wal-Mart has introduced RFID technology in about 1,000 stores, and other major retailers are looking closely at pushing the technology further along the supply chain, Mullen says.

Value of product knowledge

While many retailers have tried to improve margins by reducing personnel, sales of durable goods, products designed to last a few years, often depend on a salesperson to convert a prospect into a buyer, according to Ara Ohanian, CEO of Certpoint Systems, a company that provides e-learning management systems.

Use of the company’s VLS learning application has expanded in the retail market in the last year, from 1,500 retail locations to more than 7,000, according to Ohanian. Retailers of high-value, durable goods must keep up with consumers’ increasing product knowledge, Ohanian explains.

"Consumers are becoming more knowledgeable about the products that they are buying," Ohanian says. "Salespeople have to adequately be able to represent the brands that they are selling, or [potential customers] will walk out the door. Salespeople have to be able to carry on fruitful dialogue with customers or sales will be compromised."

For example, Ohanian says, Black & Decker hires part-time salespeople to help at its outlets and at home improvement warehouse stores during its Thanksgiving to Father’s Day peak selling season. Black & Decker inputs critical information about its products into the VLS application, which the seasonal salespeople can access to learn about features, benefits, assembly and other critical knowledge.

Similarly, Toyota uses the software to keep service technicians updated on repairs, parts and other information they need to fix vehicles and other dealership-level personnel informed on new product specs. Toyota’s learning sessions on Certpoint’s software doubled in the last year, which Ohanian credits to the increasing number of products Toyota employees sell and service. 

A way to go

Despite the successes firms are having with some knowledge management tools, detailed knowledge management systems are still in their infancy in the retail space, according to Russell Jonnes, director of retail for AlixPartners, a global corporate advisory firm that offers research, surveys and advice in retail and other industries.

The need for knowledge management in retail has grown, particularly with the advent of the Internet. Retailers face such challenges as managing information on products they sell, distinguishing between how they tell their consumers about the product vs. the information the merchandisers get from the manufacturer, being consistent in how the manufacturer describes the information vs. how the retailer describes it, deciding the levels and types of information each needs to provide, and managing the information for different purposes.

Part of the challenge in retail, Jonnes says, is that the Internet has added complexity to what exactly should be included on paper forms for product information, including parts/ingredients, assembly instructions and legal information (e.g., warnings such as choking hazards). Most retailers have yet to develop a knowledge sharing system that integrates the physical and online environments.

"In retail, there is a growing need for content management systems to provide information about the products a company is selling," Jonnes says. There has yet to be a definition of what content should be included, where it should be included (on the packaging, on separate documentation within the packaging, etc.).

For better knowledge management, retailers must have a better handle on what detail needs to go where on the Web and in the physical store, Jonnes says, with better information flow between manufacturers, retailers and logistics firms.