Moving to 100% RFID Tagging of General Merchandise

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1 Moving to 100% RFID Tagging of General Merchandise Kim Phillips: M&S Head of GM Packaging October 2013

2 Marks and Spencer plc Key Facts Founded in 1884 Group Turnover 10bn 49% General Merchandise 51% Food Over 750 UK stores & 430 international stores in 53 territories 82,000 employees worldwide 2,000 suppliers 21 million customers visit M&S stores each week Plan A Aims to be world s most sustainable major retailer by 2015

3 Transforming the business

4 Execution: 24 minutes to inspire and impress

5 Execution: Availability RFID Scanning

6 History of RFID in M&S M&S were the first major retailer to adopt RFID technology Will use over 400m tags per annum by 2014 Have been using RFID on Food totes since 2000 Currently have 9m totes with HF RFID tags Started trials on clothing RFID in 2003 Decision to roll-out on clothing made in 2005 Extension to all General merchandise agreed 2012

7 Business Case Objectives for RFID in Clothing Get accurate information on the stock position in each store, and keep it accurate! Improve the TRUE availability of sizes and colours to the customer. Become known as The store in which you can always find your size Increase customer satisfaction and reduce manual stock checking by staff. Deliver Increased Sales and a rapid Return on Investment

8 Evolution of RFID Readers in M&S In 2004 reader was tethered to a shopping trolley! In 2006 we adopted a 2 piece wireless reader Today we have new Gen 2 HHT readers

9 RFID Scanning in M&S

10 How it works in M&S Completed count submitted to Central RFID database Garments arrive in store with RFID tags applied at source. Customer assistant scans garments on a 2 weekly cycle Count validated and sent on to Stock Mgmt All sizes on display to maximise availability & sales Replenishment prompted

11 RFID in M&S Today Top 270 stores count stock with a mobile reader to correct their inventory data Extending RFID to all items and 750 stores in Spring 2014 Over 200 factories in 20 countries apply RFID tickets and labels Replenish from the DC more accurately Better availability proven to increase sales. During 2012 converted to Gen 2 EPC standards Intelligent Label TM now replaced by RFID ISO emblem Sole supply of RFID tags from Avery Dennison

12 We are using a variety of tagging solutions Integrated RFID Tickets

13 Self Adhesive RFID Labels on promotional tickets

14 Metal Costume Jewelry uses normal RFID labels

15 Many Home items can use RFID labels similar to Clothing Avery Dennison has developed specialist RFID labels for: Cosmetics Pastes Metals Small footprint or diameter Stacked products Foil packaging

16 Lessons from 8 years of RFID Scanning Business case for RFID stock accuracy remains strong RFID delivers the stock accuracy you need for multi-channel retailing. Almost 1 billion tags supplied by Avery Dennison with no data loss or duplication Good change management and compliance reporting is essential Initial focus should always be on one or two major benefits to achieve a quick ROI Longer term strategy needs to build ROI on multiple benefit applications across the supply chain. One tag many functions!

17 M&S current RFID solution 1 RFID tags and labels delivered from Avery Dennison service bureau or in-plant solution 2 Rapid RFID inventory scanning

18 Future End to End RFID solution 2 Work in Process progress tracking via RFID 3 Packing plans verified via RFID carton scans 4 RFID shipping labels generated 8 RFID store destination labels generated 9 Pick and Pack cartons RFID verified 10 RFID inventory counts 14 Rapid RFID inventory scanning 15 RFID point of sale transaction 5 Automated RFID shipping 7 Automated Advance Ship Notice generation RFID tag scanning for loss prevention 6 Automated Advance Ship Notice generation 1 RFID tags and labels delivered from Avery Dennison service bureau or in-plant solution Automated RFID receiving 12 Automated RFID receiving 13 Exception reporting for immediate sales floor replenishment

19 Execution: Footwear & Accessories

20 Important for Consumers to have accurate information about RFID We support the new Consumer Web Site developed by RFID in Europe

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22 Thank you for your attention!