Last week, RILA convened our community of internal audit executives for a bi-annual in-person meeting at Tractor Supply Company headquarters in Brentwood, Tennessee. The meeting serves as an opportunity for industry peers to network, benchmark, and discuss hot topics related to internal audit practices in the retail industry.
With attendees from Apple, AutoZone, Dollar General, Home Depot, Target, and more, the meeting was one of the committee's most successful yet. Below are highlights from the program.
Benchmarking & Interactive Sessions
- Attendees participated in peer-to-peer a benchmarking session on a variety of relevant topics, including:
- Measuring internal audit department performance
- The ERM function's placement within the organization
- Auditing an agile company
- Auditing "buy online, pick up in store" processes
- Handling store audits
- Inventory cycle counts
- Karen Hold, president of Experience Labs, led an interactive "Journey Map" exercise with attendees focusing on recruitment, training, and retention of internal audit talent.
Member Case Studies/Executive Spotlights
- Walmart's Vice President of Global Audit Services Vicki Chinchar presented a case study on Walmart's Rapid Automation Project, which included a discussion on how the retailer identified opportunities for automation and how they subsequently built the business case for implementation.
- Tractor Supply's Vice President of Legal Karen Austen shared insights on fostering collaboration between legal and internal audit departments.
- Tractor Supply's Vice President of IT Infrastructure, Operations, and Information Security Michael Mangold and Vice President of Audit Jim Hays discussed collaboration between IT security and internal audit departments as it pertains to the California Consumer Privacy Act
- PwC Principal Bob Hesselgesser and Director Bob Herman led an overview of eight emerging technologies and their potential impact on internal audit functions.
- Josh Trusley, partner, assurance service for EY presented on best practices for external and internal audit partnerships.
- Nathan Roe, senior manager, IT Risk & Insurance for EY discussed the California Consumer Privacy Act and its implications for retailers.
For more information on RILA's Internal Audit Committee, please reach out to Kathleen McGuigan.
On this date exactly one year ago, representatives from RILA, leading retailers, South Dakota, and many others entered the chamber of the United States Supreme Court to hear oral arguments in South Dakota v. Wayfair. This moment was the culmination of a decade of hard-fought legislative battles and two years of strategic litigation. Hanging in the balance was the opportunity to eliminate the unfair competitive advantage that the law gave to online-only retailers at the expense of brick-and-mortar retailers for more than a quarter century. With the retail industry behind him, then South Dakota Attorney General Marty Jackley took center stage and made his arguments in front of the nine Justices.
On June 21, 2018, the Justice's handed down their judgment. In a complete and total victory, the Supreme Court officially overruled its earlier decisions in Quill and Bellas Hess and recognized the "economic nexus" approach in South Dakota's law (that RILA constructed) as a valid and constitutional approach to state authority over the collection and remittance of sales tax on online purchases. The law thus became the road map for all other states to begin requiring collection and remittance by all retailers, thereby beginning the implementation process to end the unfair advantage that online-only retailers had enjoyed for a quarter of a century.
As soon as the Court agreed to hear the case, RILA began preparations by engaging with our members on the priorities and tactics that would be needed if the Court overturned Quill. Together, we built consensus on model legislation that could be utilized by the industry and our state retail partners in order to expedite state action heading into 2019. We focused on two key components: implementing economic nexus that follow guidelines set forth by South Dakota to avoid undue burden and ensuring that marketplace sales were included in each sales tax state.
Now – less than a year from the fateful day on which the Court heard oral argument – the industry is in great shape. Our model has been utilized across the country and the industry has positioned itself as leaders on this issue and an honest broker at the negotiating table.
To date, 40 states (including D.C.) have implemented economic nexus either through a regulatory process stemming from previously passed laws or new laws, and the remaining 6 states have action pending. In addition, 23 states have implemented marketplace collection, with 18 additional pending statutes and we anticipate at least one more to be introduced this session.
We are optimistic about the success of most pending bills; however, we have confronted political opposition and intransigent dynamics playing out in a few Capitols. As we wrap up state sessions this year our focus will turn to clean up any remaining states in 2020.
For more information on RILA's efforts to ensure a level sales tax playing field, please contact Jason Brewer.
Each year, we plan our Retail Asset Protection Conference with the goal of presenting attendees with the most engaging, compelling, and relevant content to their role as retail AP practitioners. Over the last several years, with industry and consumer trends in mind, innovation has increasingly become a greater focus of our program.
As retailers look to cutting-edge technology to solve for operational challenges and improve the customer experience, we're excited for the opportunity to curate innovation content for our community of AP executives. Below are program highlights from our upcoming Retail Asset Protection Conference taking place May 5-8 in Denver.
RTech AP Innovation Awards
Now in our fourth year, the RTech Asset Protection Innovation Awards recognize companies with game-changing technologies designed to help mitigate total retail loss and revolutionize retail AP. The conference will allow the Awards finalists – selected by a group of AP technology experts – a stage to showcase their technology to attendees.
After getting a glimpse into these promising solutions, attendees will then cast their vote and RILA will award first, second, and third place, as well as retailers' choice award in a ceremony on the main conference stage.
This year's finalists:
To give retailers the opportunity to connect with different startups that could potentially transform their business, this year we're featuring Startup Speed Dating in the Expo Experience. Attendees will be matched with startups based on their chosen innovation topic and will then participate in quick-fire conversations (or "speed dates") with startups. Innovation topics include:
- Frictionless Checkout
- On-Shelf Availability & Hot Products
- Colleague Safety
- Leveraging Data & AI
- Reducing Crime
In addition to these events, we're also featuring sessions throughout the conference program that give attendees chances to dive deeper into the emerging innovation trends, challenges, and opportunities facing their companies.
- Understanding and Controlling the Risk of Self-Checkout Technologies
- This session will focus on key insights from recent research into the vulnerabilities with self-checkout technologies and how retailers can mitigate risk
- Speakers include Paul Jaeckle, vice president, asset protection, Meijer, Professor Adrian Beck, Department of Criminology, University of Leicester, and Stephanie Lin, research scientist, Loss Prevention Research Council
- The Rise of the Robot Detectives: Automating ORC Investigations with AI
- James Cosseboom, senior manager, investigation & corporate AP, Retail Business Services LLC and Dean Takacs, founder, Detective Analytics LLC will share how the latest advances in AI technology can give investigative teams clarity into criminal activity across the entire organization and deliver pre-linked and pre-built investigative cases.
- Leveraging Artificial Intelligence to Boost Your Fraud & Safety Programs
- In another AI-focused session, PetSmart and Appriss Retail will dive into the technology's role in proactively detecting safety concerns, employee fraud, and other outlier behavior.
To participate in RILA's innovation activities at the 2019 Retail Asset Protection Conference, register to join your AP peers here.
Earlier this month, we shared a look at some of the incredible women who help shape our supply chain-focused communities and some of the female-driven content featured at our recent LINK conference. As we continue our Women's History Month celebration, we're now turning our attention to our upcoming Retail Asset Protection Conference. Held May 5-8 in Denver, the leading conference for top level asset protection executives from the most progressive retailers in the world is the perfect opportunity for us to continue fostering a community of strong women in retail and AP.
Here's a look at how we'll be celebrating women at the Retail Asset Protection Conference:
Similar to our Women in Supply Chain community (which is now 11 years strong!), we're launching an official Women in Retail Asset Protection (WRAP) group designed to connect and support female advancement in the industry. We'll be holding a few events at the conference to help kick off the start of WRAP:
- Women in Retail Asset Protection Networking Event
- This special reception for women in asset protection will be held at the RILA Lounge in the Expo Experience. Join other female leaders for cocktails while you participate in a fun networking activity that will inform RILA's groundbreaking Diversity & Inclusion initiative.
- Women in Retail Asset Protection Breakfast
- Women and men are invited to attend this inaugural conference session.
- Facilitated by Jessica Pierce, district manager, loss prevention, DICK'S Sporting Goods, the breakfast will feature top women law enforcement officials sharing their personal career stories, as well as their perspectives on criminal justice reform.
- Speakers include Doreen Jokerst, Chief of Police, University of Colorado Police Department; Maggie Conboy, Senior Chief Deputy District Attorney, Office of Denver District Attorney; Janeen Diguiseppi, Assistant Special Agent in Charge, Federal Bureau of Investigations
In 2018, RILA launched our Diversity & Inclusion Initiative led by CEOs like RILA chairman and Target CEO Brian Cornell and other top executives from leading retailers to unify the industry's commitment to a diverse workforce that reflects its customers. The initiative is focused on developing new tools and resources tailored to retailers' unique needs and deepening D&I engagement across companies. To that end, we will dedicate time and programming at the upcoming conference to just that.
- Crisis Management: Why Integrating D&I Into AP is Crucial
- In this breakout session, we will discuss how integrating D&I principles into the AP ecosystem may prevent a consumer crisis as well as improve response when a crisis inevitably occurs. Rafael Fantauzzi, equality, diversity & inclusion, IKEA U.S. and Janice Little, global chief diversity officer & vice president, talent development, Lowe's will share first hand experiences and best practices for how retailers can effectively manage an AP crisis.
- Diversity & Inclusion Leadership Council Meeting
- This is a private meeting for RILA members on the Diversity & Inclusion Leaders Council. For more information on getting involved, contact RILA Vice President of Workforce Evan Armstrong.
Do you know of a colleague that could benefit from and/or contribute to our diverse community of retail AP professionals? Make sure they reserve a spot at this year's conference. Registration is open now.
And for more information on RILA's AP communities and to get involved, contact Lisa LaBruno.
This is a guest post by Jeff Ashcroft of the Supply Chain Network
For me, the highlight of this year's RILA LINK Conference, the latest evolution of RILA's annual Supply Chain event, came in the opening keynote with Dick Johnson, Chairman and CEO of Footlocker.
Multiple times during his session he spoke of what he sees as the burning need for Footlocker to establish MiniHubs of inventory closer to both customers and local stores to satisfy their growing omnichannel needs.
As someone who's been a proponent for Distributed Logistics for a number of years now, it was music to my ears to hear the top leader of a major retail organization making the call to move forward with MiniHubs as a key part of their go forward retailing strategy.
Even more interestingly, during the Q&A when Dick Johnson was asked if he could share more with the assembled retail supply chain leaders about the Footlocker strategy for MiniHubs, he was brutally honest in saying they were still not sure how they were going to do it, just that it needed to be done.
So in order to make the case for adding MiniHubs to your fulfillment network, what are the seven ways that adding MiniHubs can benefit your logistics network and overall retail business?
Benefit from Distributed Order Management (DOM) - Working with a series of MiniHubs will require effective order management allowing all parties to rapidly know if the In-House Fulfillment Center, Store or which of the provider of Micro-Fulfillment centers will be delivering the consumer order. All successful retailers and etailers going forward will almost certainly need some form of DOM capability and integrating with MiniHubs might provide these capabilities at virtually no additional cost as an integrated component of the service offering.
Cost Effectively Add Automated Local Micro-Fulfillment Centers - As mentioned, most current fulfillment networks cannot provide the needed improvements in consumer delivery without massive additional investment. Working with a MiniHub Provider can allow logistics and e-commerce business executives to work together to design the solution which best fits the needs of the business. Important to note is the flexibility in the MiniHub offerings means that the number and locations of micro-fulfillment centers used can be adjusted on an ongoing annual basis to match the changing needs of the business and consumers. Driving the need for these micro-fulfillment centers is something called The Automated Local Fulfillment Imperative.
Capture Delivery Savings Utilizing Local to Local Delivery Options - Shifting inventory closer to customers and shipping from stores means traditional courier hub and spoke models are becoming less efficient as they add time and cost to delivery. Utilizing a MiniHub micro-fulfillment network provides a methodology of intercepting these shipments and redirecting for immediate delivery and lower delivery cost.
Improved Carbon Footprint for Network – By making the shift to more local delivery options your overall carbon footprint can also be significantly reduced by utilizing more short distance ground transportation option for last mile deliveries versus long distance air delivery services which release carbon higher in the atmosphere generating roughly four times the carbon impact.
Double, Triple or Quadruple Same & Next Day Delivery Coverage - Working with a MiniHub Fulfillment Provider means that businesses can quickly understand and implement the desired customer delivery service levels and geographic coverage. MiniHub models have been developed and show required micro-fulfillment center utilization in order to double, triple and quadruple the population covered by service level.
Benefit by Adding Flexible Replenishment Options for B2B Wholesale or Store Replenishment - Given the number of channels Brands and Retailers need to deliver to, the complexity and compliance requirements are now bordering on the ridiculous for in-house operations to support so many varying pack, label and deliver methods. Brands and retailers can ship product to the MiniHub in bulk and then MiniHub will configure and deliver based on the directions provided via the Distributed Order Management (DOM) system. As well, if desired rapid store replenishment at the each level for selected categories can also be driven from the MiniHub micro-fulfillment centers allowing for potential store space and inventory reductions
Sales Increases Based on Proximity to Customers – There's a growing body of evidence, and the prime example of Amazon, which suggests that utilizing MiniHubs to deploy inventory closer to customers and stores will also drive increased sales. Here's a blogpost I wrote called How Getting Logistically Closer to Customers Means More Sales which discusses this phenomena in greater detail.
So when you're considering your logistics network strategy going forward, be sure to include the option of utilizing MiniHubs as a potential variable component to ensure your retail supply chain is incorporating all potential solutions to drive the greatest value and benefit for the overall retail business and your customers.
Thanks again to RILA for a great LINK 2019 Conference and already looking forward to next year's event!
March 8 is International Women's Day, and the theme is #BalanceforBetter. But in the world of retail, where women drive 70-80% of U.S. consumer purchasing, the role of women is critical 365 days a year. Without gender balance in leadership roles, retailers may be missing out on the best solutions and insights. Research by groups including Carnegie Mellon, MIT, Gartner, and others has shown that companies with a more balanced proportion of women in board and executive roles have higher valuations, better returns on equity, and higher payout ratios.
RILA is helping retailers address these gaps. Last year, we launched the Retail Diversity and Inclusion Initiative, led by CEOs like RILA chairman and Target CEO Brian Cornell and other top executives from leading retailers, to unify the industry's commitment to a diverse workforce that reflects its customers. These retail leaders have been leveraging member companies' current work in diversity and inclusion, while developing new tools and resources tailored to retailers' unique needs. The initiative has had a busy first year and is already making great strides in deepening D&I engagement across companies.
Caroline Wanga, Chief Diversity Officer, Target and Matt Zabel, Senior Vice President, Risk & Government Affairs, Target presenting "When D&I Stops Being Nice and Starts Getting Real" at RILA's 2019 Retail CEO Forum.
RILA has a long history of strengthening the role of women in the retail industry. Last week, at LINK2019, RILA's Retail Supply Chain Conference, we marked 11 years of RILA's Women in Supply Chain Network (WISC). For over a decade, WISC has sought to provide networking, educational and professional development opportunities for women in the retail supply chain field, via events, resources, and industry partnerships.
WISC Networking Reception in the Expo Experience at LINK2019
At LINK2019, women executives expanded their networks and shared common challenges at a dedicated reception, amidst innovative solution provider exhibits in the Expo Experience hall. The conference featured a joint session with AWESOME (Achieving Women's Excellence in Supply Chain Operations, Management and Education), where female and male executives discussed 15 actionable ways to achieve more balanced representation in retail leadership. In retail supply chain, recruiting and retaining top talent is consistently a primary challenge—and a frequent topic among the 30+ breakout and main stage sessions at LINK2019.
Heather Sheehan, Executive Director at AWESOME, and Michelle Livingstone, Vice President, Transportation at The Home Depot presenting "Making Waves: Actions for Supply Chain Leadership – Women In Supply Chain Breakfast Session" at LINK2019.
WISC is already laying the groundwork for activities at LINK2020 (February 23-26 in Dallas), but RILA's other communities have big plans for the rest of 2019. Next: RILA's industry-leading Retail Asset Protection Conference (May 5-8 in Denver) will feature additional sessions and opportunities for women—and men—in retail asset protection to ensure their organizations represent the diversity of the 21st Century workforce.
RILA is excited to launch this important initiative and invite you to join us on our journey. If you are interested in participating, contact us to learn more:
- To get involved with RILA's Women in Supply Chain Initiative and/or RILA's asset protection community, contact Lisa LaBruno
- To get involved with RILA's Diversity & Inclusion Initiative, contact Evan Armstrong
In 2016, RILA introduced the retail industry to a new way of thinking about loss prevention. The concept of Total Retail Loss (TRL) was developed to be a more manageable and meaningful approach to defining and measuring retail losses. And since we first published the research which fully outlined TRL and its applicability for retailers, we've seen more and more companies adopt the approach to advance their LP practices.
In a Convenience Store Decisions article this week, c-store chain Kum & Go was the latest retailer to reveal how the company's approach to loss prevention is evolving as they embark on the 'TRL path.'
Kum & Go's Manager of Loss Prevention Britt Davidson explained how the company began using the TRL typology to identify and categorize areas of loss and create efficiencies within their LP program.
"Specifically, it provides a much better way to define and measure loss of all kinds by providing a typology consisting of 33 different categories that cross the entire spectrum of retail theft and fraud." – Britt Davidson, manager of loss prevention for Kum & Go
The full article can be read here.
Want to learn more about retailers' adoption of TRL and other LP best practices? Meet members of the Kum & Go team, as well as hundreds of other industry peers May 5–8 at RILA's Retail Asset Protection Conference in Denver, Colorado. Visit www.rila.org/ap to learn more and register.
This week, RILA hosted over 70 members of the Association's Consumer Products Committee for a meeting in Washington, DC. The committee, comprised of quality assurance, sourcing, legal, and government affairs professionals from RILA member companies, meets twice a year for peer-to-peer benchmarking and discussions around shared product safety compliance challenges and industry trends. This year's event brought attendees from Five Below, Home Depot, J. Crew, Starbucks, Target, and more.
Kicking off the meeting, The Toy Association's SVP of Technical Affairs Alan Kaufman presented on lessons learned from navigating the state of Oregon's Toxic Free Kids Act process to be exempted from chemical reporting requirements, to see if it could potentially be replicated by RILA.
Attendees were also joined by Costco Product Safety Analysis & Reporting Supervisor Erin Bradley and Corporate Counsel Derek Snead, who shared a case study on the company's recently issued civil penalty issued by the Consumer Product Safety Commission (CPSC) and how they used that experience to improve their compliance program.
CPSC Commissioner Peter Feldman later engaged in a question and answer panel discussion moderated by RILA's Autumn Moore and Matt Howsare from Mitz Levin. Commissioner Feldman highlighted some of his priorities for his term at the commission, which include updating the agency's data streams and data analytics capabilities.
Wrapping up the meeting, Cory Anderson from the Retail Council of Canada provided an international perspective on product safety, with an update on the latest trends in Canada.
The meeting also featured several opportunities for benchmarking among retail industry peers on important topics in consumer product safety.
For more information about RILA's Consumer Products Committee, please reach out to Autumn Moore.
By Lisa LaBruno, executive vice president, retail operations & innovation
This year, RILA launched the Supply Chain Innovation Awards with a single mission in mind: to find and recognize startups and legacy solution providers developing game-changing technology that will reimagine and transform retail supply chains. We called on companies that are helping retailers innovate in areas like customer experience, internal operations, leveraging data, automation, and supply chain management.
A panel of top retail supply chain executives helped narrow the pack from fifty applicants to seven finalists: Bell and Howell, Dematic, DHL, FourKites, Kindred, Onfleet, and Shyft.
The finalists joined us in Orlando this week at RILA LINK, RILA's Retail Supply Chain Conference to pitch their technologies from the main stage to a captive audience of over 1,500 retail supply chain executives. A committee of retail executives and industry thought leaders experienced the finalists' technology first-hand and subsequently selected first, second, and third place winners. In addition, retailer attendees cast their vote for "Retailers' Choice" award, reflecting the industry favorite from among the finalists.
The winners are:
"The Awards are an unparalleled opportunity to expose retailers to true innovators whose technology can empower the industry to achieve seamless supply chains," said Lisa LaBruno, RILA's executive vice president of retail operations & innovation. "These winners not only embody the spirit of innovation propelling the retail industry forward today, but they have developed tangible solutions to some of retail's biggest supply chain challenges, as well. We are thrilled to be able to showcase these companies on supply chain's biggest stage this week in Orlando."
This is the tenth in a series of blog posts about renewable energy options for retailers.
As retailers look to reduce their environmental footprint and grow renewable energy investments, RILA continues to hear from our members that understanding the ever-changing renewables procurement landscape can be challenging. That's why we are developing a new renewable energy guide, which highlights fundamentals of different procurement options and key considerations, specifically for retailers.
In a series of blog posts, we'll be outlining various topics featured in the guide; the next chapter in our series, Renewable Energy Procurement through Green Tariffs, is outlined below. We are excited to share the chapters one by one, and to work with partners like World Resources Institute in their development.
What are Green Tariffs?
Green tariffs are programs by which energy consumers – like retailers – can purchase large-scale renewable energy from local utilities more cost effectively than through traditional procurement programs. Eligible customers can buy both the energy from a renewable energy project and the associated Renewable Energy Certificates (RECs) in places where there is no retail electricity choice.
While local utilities typically cover the capital cost for the renewable energy projects, green tariff consumers effectively help pay the cost of the project off over the contracted time through their electric bill. This system allows larger buyers to support utility RE procurement while ensuring that other utility customers are not financially harmed or affected in the process.
Who uses them/What are the key benefits?
Green tariffs have been designed to address the needs of large energy buyers, including corporations and cities/municipalities. Corporate buyers, including retailers like Apple, REI, Starbucks, Target, and Walmart have utilized green tariffs to contract close to two Gigawatts of new renewable energy.
Green tariffs help companies reach RE goals when on-site generation is infeasible or insufficient, and when internal resources to execute and manage third-party RE projects are minimal. They also help provide cost predictability through varying contract lengths, fixed prices, or market-based rates for RE, and allow companies to establish a more direct financial connection to the RE they procure within given geographic areas.
Is Pursuing Green Tariffs right for your company?
- Avoid capital costs
- Access a cost-competitive hedge against market volatility
- Aggregate demand
- Act as a climate leader
- No expertise required
Ready to move forward with Green Tariffs?
- One size does not fit all
- Limited availability
- Price premium
Like any renewable energy initiative, it is important to identify what commitments have been made in the past and their outcomes. By engaging stakeholders across the organization such as your finance team, you can accurately evaluate the best renewables strategy for your company.
WRI's U.S. Renewable Energy Map presents the RE purchasing options for corporate buyers in each state; in addition, their Emerging Green Tariff in U.S. Regulated Electricity Markets
resource offers a detailed compilation of the approved and proposed green tariffs. Actively engaging with local electricity providers to help develop a green tariffs program can also be helpful in ensuring the offering reflects the needs of your company and fellow buyers.
To learn more about green tariffs, if they are a worthwhile consideration for your company, and next steps for moving forward, access the full chapter in the renewable energy guide here
and all the chapters published so far here
. For more information about RILA's renewable energy initiatives, contact Erin Hiatt