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Goliath Unlocks Retail Secrets with RFID

In December 2005, we reported on a contract that Goliath Solutions had secured with Walgreens to equip all 5,000+ of the drugstore chain's locations with an RFID-based promotions tracking system. Today RFID Update interviewed Goliath for an update on how the company's business has progressed since the Walgreens deal put it on the map.
Apr 05, 2007This article was originally published by RFID Update.

April 5, 2007—In December 2005, RFID Update reported on a contract that Goliath Solutions had secured with Walgreens to equip all 5,000+ of the giant U.S. drugstore chain's locations with an RFID-based promotions tracking system. While more concept than reality at the time, promotions tracking has since emerged as one of the most talked-about applications of RFID for retailers and the manufacturers whose products line store shelves. Today RFID Update interviewed Goliath's executive vice president of sales and marketing John Stermer for an update on how the company's business has progressed since the Walgreens deal put it on the map.

According to Stermer, the Walgreens deployment will be completed within the year. "We'll be completely covering Walgreens' existing stores and any new ones we can pick up before the end of the year, and then we'll keep that cadence going forward [as Walgreens opens new locations]." Goliath sees drugstores as a key target market for its solution, and is working with other drugstore chains in addition to Walgreens. The company is also targeting office supply, grocery, and big-box electronics retailers. While Stermer couldn't cite any clients by name, he did say that certain engagements will be revealed in forthcoming announcements from the company.

When asked with which RFID companies Goliath competes, Stermer answered that the company does not consider itself a technology company. While RFID tags and readers are used to track and trace promotions displays within stores (see How It Works for more details on the technology itself), the Goliath solution is more holistic than simply hardware. Track-and-trace is but one component; the company then works with clients to help optimize the execution and placement of in-store promotions. This optimization -- based on algorithms, analytics, and data processing -- is actually where much of the value proposition lies, explained Stermer. "Really it's a whole business process. Only a small piece of it happens to be RFID related."

Given this holistic approach, the company's pricing model is not based on the number of tags, readers, or sites, as is often the case with technology vendors. Instead, the company licenses the collected data and the resulting analysis on a per period (typically a year) or per campaign basis.

Stermer was confident in the return on investment that Goliath has delivered to clients. He said that the company offers very clear and compelling explanations for how a retailer or manufacturer will achieve ROI from the Goliath solution.

As a demonstration of its value, Stermer shared a major finding it uncovered through work with its clients: the location of in-store promotions can have a dramatic impact on the sales of seasonal items. "The big ah-ha for us was location, location, location," he said. One example was tape, which was best placed toward the front of the store during the holiday season -- or so said the conventional wisdom. Goliath's analysis revealed that placing tape by wrapping paper actually resulted in considerably stronger sales. Another example was candy gift items for Valentine's Day. Here again the custom is to place such seasonal promotions near the front of the store, where visibility is highest. But Goliath found that the item sold better when promoted in the cosmetics section, where men would already be actively looking for a gift. "We've seen 100 to 200 percent increase in sales depending on location," said Stermer.

Perhaps it is findings like these that have led CPG manufacturers Procter & Gamble and Kimberly-Clark to embrace promotional display tracking as a sweet spot for RFID. Richard Cantwell, Procter & Gamble vice president and chairman of the EPCglobal Board of Governors, has publicly stated on numerous occasions how enthusiastic P&G is about promotions tracking. Kimberly-Clark, maker of such household brands as Kleenex and Huggies, announced last week that it had deployed the just-released Real-Time Promotion Execution Solution from OATSystems to monitor and better manage in-store promotions with one of its retail customers.
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