Gillette's Fusion Launch Makes a Good Business Case for RFID - ' Planning A Massive Launch '

The Fusion launch was not the first time P&G has dipped its toes into RFID waters. And Gillette, acquired by P&G in the fall of 2005, had already run several trials of its own. One such trial, which tracked displays of the company's Venus line of razors for women, taught the company a dismal truth about display compliance: More than 30 percent of the displays were not getting set up on the sales floor on time. A similar trial with Gillette's Braun CruZer electric shavers yielded equally dim results.

But the Fusion launch was intended to be a different animal from the very beginning, thanks in part to P&G's need to convince Wall Street that the $57 billion it forked over for Gillette was money well spent. For starters, the company planned to spend a reported $200 million to support the launch of the product. The launch date was set for Feb. 5, Super Bowl Sunday, and the marketing blitz included not one but two Super Bowl ads, at a total cost of $6 million. P&G took out ads in every major men's magazine, from Sports Illustrated to Esquire. Paula Abdul and Randy Jackson, of American Idol fame, stumped across the country looking for the "Face of Fusion." P&G blanketed the earth with ads and promotions, desperate to make Fusion, the five-bladed razor (six if you count the trimmer on the back, for those "hard-to-reach spots") that sells for about $10—blades are extra—its flagship shaving product, replacing the widely used Mach III.

"There were enormous resources behind getting that product to retail," says Paul Fox, spokesperson for Gillette. "Mach III is considered one of the best consumer product launches ever, and the investment behind Fusion was even greater than that." A critical part of that launch for P&G was timing product availability and visibility in stores with the date of the launch. In the first week alone, 180,000 promotional Fusion displays were sent out to stores. They varied from self-contained perforated cardboard boxes that fold into shelf-level promotions, to entire pallets that were rolled into the middle of supermarket aisles. But just sending out the displays wasn't going to be enough.

In the retail business, promotional display compliance rates are not what they should be. Manufacturers are lucky if 60 percent of their displays make it out on the sales floor within three days of a launch or promotion. And the results can be disastrous. "The problem of out-of-stocks is very simple," says Sanjay Sarma, a cofounder of the Auto-ID Center at MIT and CTO of OATSystems, an RFID vendor that works with P&G. "If you don't make the sale, then both the retailer and supplier lose. It just so happens that sales typically spike around promotions, so if you flub a promotion, it results in an especially great loss."

Given the high stakes, Gillette executives started planning well in advance of the actual launch date to use RFID to ensure Fusion's display compliance. In fact, RFID was taken into account two years before the launch, after the product had been developed but before the packaging was designed. "We put our RFID engineers together with our packaging engineers to make sure decisions affecting the packaging were made in such a way that the product would be what we call "EPC friendly," says Cantwell.

From the type of aluminum foil used in the packaging to where the tags should be placed on pallets and displays, Gillette's engineers were looking for what is known as the "sweet spot," the placement that would give them the most consistent reading. "With Fusion, we were able to start from scratch," says Cantwell. "We were able to configure the materials, and the way the product was arranged in the pack, so we could get a sweet spot pretty much anywhere on the package." The collaboration between packaging engineers and RFID experts within P&G offers a glimpse at how electronic tagging will eventually affect the entire product lifecycle, from conception to sale.

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