Gillette's Fusion Launch Makes a Good Business Case for RFID - ' Weak Links in '

Of course, with such a high-profile launch, display compliance was bound to be high. P&G made its retail partners acutely aware of the launch's importance, so that even the most reclusive floor manager would have stumbled across a Fusion ad or two leading up to the launch date. "There was no store or store employee that wasn't aware that something huge was happening," says Cantwell. "The strategy was to surround the consumer with Fusion communications, so they couldn't help but realize there was a major new product being brought to market."

Among the goals of tagging the Fusion displays was to boost sales at the 400 stores participating in Gillette's RFID program. But perhaps more important was what P&G learned from the launch. Cantwell received data readings from the tags at a number of spots along the supply chain: leaving P&G's distribution center; arriving at the retailer's distribution center; leaving the retailer's distribution center; entering the retail store's stockroom; entering the sales floor; and finally, entering the retail store's box crusher.

As soon as the data began feeding back to Cantwell and his team, the problems started showing up. Some stores were getting too much product. Some got none at all. The inefficiencies in the supply chain were immediately apparent. "If a display arrives a week before it is supposed to go out on the floor, it's put up on some reserve racks in the warehouse or some other place that's not very prominent," says Simon Langford, director of RFID strategy and transportation systems at Wal-Mart Stores Inc., one of two retail partners participating in the launch (Gillette declined to name the other). "Sometimes our associates just forget. This is the real world. With 4,000 stores, mistakes happen."

When it comes to poor store execution, Gillette executives readily admit that the blame needs to be spread evenly among manufacturers and retailers. "There's culpability on both sides of the equation," says Gillette's Fox. "Error creeps in from the time we're packaging the product."

In response, Gillette representatives were able to notify their retailers and redirect product, usually within 24 hours. Stock clerks used handheld devices to find Fusion displays buried behind other merchandise. And P&G merchandising employees were dispatched to stores that were not in compliance with the schedule to correct the problems.

By the launch's third day, the EPC-enabled stores had achieved 92 percent compliance, a level that exceeded expectations, even given the typical boost in compliance for such high-profile launches. In fact, the 400 stores involved in the pilot achieved significantly higher sales numbers as well, which Cantwell says more than covered the costs of applying the tags. (Gillette executives declined to share exact figures, citing competitive reasons.) "This was a really practical application of a very new technology," says Christine Overby, an analyst at Forrester Research Inc. "It's not science fiction, and that's a good thing."

The overall launch was pretty successful as well. In its first four weeks on the market, Fusion and Fusion Power (the battery-powered variety) gobbled up a jaw-dropping 55 percent of the razor market, according to one Wall Street analyst. Sales have since slowed considerably, and there is some indication that consumers are not buying refills as quickly as predicted, but the launch itself was an unqualified success.

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