Decathlon - Group 2 - Content
Decathlon - Group 2 - Content
Group Prsentation
Group: 2
HA NOI – 2021
MỤC LỤC
GROUP INFORMATION............................................................................... 4
1.1 Overview............................................................................................... 5
1.2 Mission.................................................................................................. 6
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5. THE GLOBAL SUPPLY CHAIN MANAGEMENT ACTIVITIES OF
DECATHLON ............................................................................................ 30
7. RECOMMENDATIONS ........................................................................ 41
REFENRENCE .............................................................................................. 42
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GROUP INFORMATION
1. Members
2. Presentation’s Topic
Analyze The Global Supply Chain Of Decahlon
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ANALYZE THE GLOBAL SUPPLY CHAIN OF DECAHLON
1. INTRODUCTION OF DECATHLON
1.1 Overview
Ever-evolving and high performance design, the best quality at the lowest
possible price, and expert advice that customers of all ages, backgrounds and skill
levels can access in-store or online, from anywhere, at any time, is what makes
Decathlon who they are.
The retailer stocks a wide range of sporting goods, from tennis rackets to
advanced scuba diving equipment, usually in large superstores which are sized at
an average of 4,000m². Decathlon is not just a reseller. They’re unique because
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they have their own in-house brands. They are experts in their fields, and they
draw on their knowledge and experience to create, design and manufacture their
own products in their own studios and labs. Currently, they have over 20
Decathlon brands, each dedicated to a specific sport or practice. And, their family
ownership means they’re here for the long term. They reinvest their profits into
research and development, helping to lower the cost of participating in sport.
1.2 Mission
“To sustainably make the pleasures and benefits of sport accessible to the
many”
In a world where sport has the potential to give so much, providing innovative,
enticing and high-performance products at prices that are accessible to everyone
isn’t a job, it’s Decathlon’s mission. From designers and makers to customer
consultants and digital developers, they all come to work because Decathlon
believes sport should and can be for everyone.
In brief, Decathlon wants to change the world into a place where everybody has
access to sport. Decathlon’s way to achieve this democratization of sport is by
offering products both at low price and a good quality, or, in the company’s own
words: “to develop technical, good-looking and simple products, always at the
lowest possible prices”(Decathlon, 2017).
1.3. Vision
This is the main vision of Decathlon. Therefore, Decathlon has developed its own
R&D department and manufactures for its strong sub-brands. This has allowed
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Decathlon to become a leader in innovative sport equipment, with 12 of its new
goods in 2008 rewarded with design prizes.
Vitality: Vitality is Life, intense activity, energy, drive and vigour. The
employees of the company are full of vitality as they have, first and foremost, a
positive mindset and are extremely energetic. They are enthusiastic, love creating
and innovating, and relentlessly strive to improve and make things around them
change.
Innovation: “At Decathlon, Innovation is the heart of our product." - The CEO
of Decathlon said. This strategy has 2 main objectives:
“Innovate smart” because, first and foremost, they want to make sport easier
for people who use their products. They place the user at the heart of their
approach and focus on usage innovations. Listening to, and observing sports
people in action, in their Research & Development centre, in their laboratories,
is how the sales assistants, product managers, designers or engineers imagine
the product of the future – the product that is more practical, comfortable,
enjoyable and safe for the user.
“Innovate for the benefit of everyone”, in all product categories, not only at
the most expensive or sophisticated end. Their aim is to make their innovations
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accessible to a maximum number of customers and users worldwide because
their prices are as low as possible.
Green Planet: They help people stay healthy for longer through sports and, at
the same time, aim to have a positive impact on the planet. In Decathlon, they
believe that preserving the planet is crucial for the future. Many of the products
they design, manufacture and sell will be used in the great outdoors. They believe
in preserving our playground and so they adhere to the Blue Economy principle
and follow sustainable production methods to help extend the life of Earth and its
inhabitants.
1.5. Slogan
This is the motto of Decathlon. With them, You - the customers, deserve to
participate, try, get back up, aim higher and farther. Whether you’re just getting
started or you’re at the top of your game, Décathlon wants to make sports an
exciting part of your daily life.
Decathlon has thousands of products under its brands with different lines and
technologies which are able to meet the customer’s needs of ages, genders,
preferences, etc across the world. For example:
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Domyos: sports clothes for fitness enthusiasts
According to the company’s report in 2020, Domyos is the most famous and
benefited brand in the whole system thanks to the awareness of people about
physical and mental health these few years. That’s why our group picked Domyos
and its typical product: Gym & Fitness Clothes as the chosen representative of
Decathlon to present.
In 1998, Decathlon recognized the need to create a specific line tailored for health
and wellness goals. That’s when Domyos, the fitness brand, was born - made to
fulfill body and soul. Meaning "the way of the heart and muscle," the 'do' is the
way and 'myos' is the heart and muscle. The brand’s products are exclusively
available in every Decathlon store.
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Domyos is working towards a goal of making fitness accessible to everyone.
Develop products and clothing for adults, for all fitness activities, individual and
in group, which improve fitness in a confined space both indoor and outdoor, but
mainly urban. For example, providing clothes for the practice of aerobics, muscle
building, yoga, stretching or pilates,... For children, these activities are known
collectively as the “gym”.
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2. DECATHLON SUPPLY CHAIN OVERVIEW
b. Product Characters
For 40 years, Decathlon has led the way toward high-quality, low-cost products
with a model that produces the best value-to-price ratio in the market. That means
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every athlete has access to the most technically sound products and gear at the
best prices.
from then showing the most significant characters of Decathlon Products which
are:
High-quality
+ Direct collaborate with athletes and consumers for needs identification
+ Complex process of products design, testing and producing
+ Selective suppliers for manufacturing
Affordable Prices:
+ Design mass-market smartly by optimizing resources & simplifying design
without compromising quality.
+ Strict criterias & requirements for suppliers partnership. Aiming to form a
long-term relationship with best industrial suppliers
+ Full control and invest in logistical organization (think storage,
transportation and automation), in order to lower cost and reduce
environmental impact.
+ Actively forecasting the demands in advance to shorten the operating time
for distribution.
Ecodesign:
+ By controling all the process, the company can apply ecodesign on them
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+ Observation of preferences and online reviews to optimize replenishment.
For products earning less than 3 stars, Decathlon teams pull them from our
range and optimize them to meet expectations.
+ Place warehouses or manufacturing sources in a close proximity with
stores to take feedbacks and make quick improvements for products.
One piece of Decathlon's success equation is its supply chain. In Europe and
much of the world, the company controls every aspect, from product conception
to design to retail.
a. Product Design
With 85 different brands in the company, every stage of the design process aim
to offer the most appropriate and high-performance product. The Design
processes are in charge mainly by Decathlon teams around the world. They focus
on creating the best product to suit every athletes/consumers needs for sports. The
steps include:
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Creation stage: brainstorm and workshop for product concept, specifications
for use, products assessment (feasibility, technical, sensory and aesthetic
choices)
Industrial Prototype: formalising the request and providing the suppliers with
technical file to start the industrial prototype
Testing: the prototypes are tested several times in the aboratory and directly
on the playing fields
Product selected: select tested products for matching sport or season. Then the
launch of the collection in store to anticipate production and delivery time.
b. Manufacturing/Industrialisation
Once a product has been through all the design stages, Decathlon work on its
industrialisation before putting it on sale. This process goes from the prototype to
the mass production. It lets us go from rudimentary or handmade production to
manufacturing large-scale quantities by using industrial machines.
Decathlon manages its activities on the global market with a commercial presence
in 60 countries and production activities in 45 countries.
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- Rank 2 suppliers 362
Africa: Madagascar.
North Asia: Japan.
Southeast Asia: Cambodia, Malaysia, Myanmar (Production Stopped In
2020). Europe: Germany, Austria, Belgium, Bosnia, Bulgaria, Croatia, Spain,
Finland, Georgia, Hungary, Lithuania, Netherlands, Czech Republic, United
Kingdom, Serbia, Slovakia, Slovenia, Switzerland.
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manufactured. Morocco is another country that provides numerous articles for
Decathlon, especially textiles, while in Asia sneakers and balls occur.
Local teams based in manufacturing countries are responsible for sourcing and
managing the suppliers that produce Decathlon products. Once they are
manufactured, Decathlon products are shipped by transport providers right into
warehouses, then allocated to stores or directly supplied to customers and users
after an online order
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c. Distribution Process
This network includes 69 warehouses and logistics platforms, distributed all over
the world, allowing them to serve countries where they have a presence.
The company has several distribution centers in each area i.e. North Europe,
South Europe, EMEA, Asia, America; however retail countries can consider to
ship direct from sourcing countries instead of distribution center. The CSC will
play as an area Distribution Center/Cube. It decides the distribution of goods to
the sourcing market. The leftover, will be decide to consolidate at an Free Trade
Agreement Area (FTA) to de-consolidate and deliver to purchasing destination.
The transfering goods will be delivered from CSC to the RSC and from then go
to the warehouses systems of Decathlon to get to stores or direct address.
Local Retail
Purchasing
CSC
Order Warehouses
Global Retail RSC & Logistic End users
Platforms
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In specific, in 2005 Decathlon opened in Paris of a large continental 50,000 m2
warehouse, to be in stock and that will serve the rest European products to the
stores.
The new scheme includes the creation of a second type of store. In the future, the
multi-regional facilities, will cater to the twelve regional warehouses that the
French firm has in Europe
d. Retailing
Decathlon products are sold through 1,697 stores located in 60 countries and
digital platforms ensuring our products are accessible through all our distribution
channels.
At stores, the stock are prepared to be always in full so the consumers can always
feel and touch it. The online order from website are undertaken by many format
which can be deliver to address, click&collect,…
The warehouses are always placed in a close proximity with the retail stores to
ensure the stocking. Also contact points are important, because they allow us to
create the most direct connection with you the sports users. By then making
forecasting for goods demands and feedbacks which will go directly to the
manufacturing and regional distributing center.
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3. MOTIVATION TO SET UP A GLOBAL SUPPLY CHAIN FOR DECATHLON PRODUCT
Increase Customer
No Functions Cost Reduction Improve Quality Competitive Leverage
Satisfaction
Create an cost- Global outsourcing for Effective planning for Global outsourcing
effiecient network of suppliers with inventory, warehouse helps scaling up the
distribution center production of raw functions and economy and networks
(CSC, RSC) materials, compoments transportation. Improve of logistics in sourcing
1 Logistics
Taking advatange of and finshed the overall global countries.
optimal global market Maximizing efforts of Creating value in the Approach reduces
Market
4 entry mode, online the customer value– processes and value in design and production
Channels
presence, and creating processes, costs, focuses talents,
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alignment with alignment with the the alignment with the and reinforces
marketing mix marketing mix, and marketing mix marketing
variables understanding global
customers’ needs
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4. MARKET GLOBALIZATION DRIVERS.
4.1. Lifestyle.
The sports retailer has benefited from the changes in society. Athleisure is still a
hot trend that shows no signs of slowing down. Fitness enthusiasts are looking to
get in shape (or stay in shape), while having the ability to socialize and interact
with others. There’s a renewed focus on fitness, physical and mental health.
Nowadays, the concept "being healthy" is quite common.
This company is learning to craft more nuanced product strategies that balance
scale and local relevance.
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product's lifespan such as “Second-hand”, “part-exchange”, “Rental”... By 2026,
Decathlon is committed to eco-designing 100% of their products.
a. Scale of economies
The main core of Decathlon's business model is the low operating costs strategy.
Decathlon is recognized as one of the best retailers on the market within the
performance/price ratio.The main contributor to achieving such an outstanding
performance is a fully integrated chain allowing control of both manufacturing
and distribution processes. Each one of Decathlon’s brands conducts extensive
research in order to develop the latest and most Innovative Designs in sportswear
and to minimize operating costs.
Decathlon has room to expand further in the UK and internationally. With its
wide assortment of private label lines stocking items to support more than 70
different sports, the company has a reputation for quality at low prices, which
drives customer loyalty.
b. Accelerating Innovation
In 2020, Decathlon continued to invest in its upstream value chain to increase its
engagement, relevance and appeal among customers. This involves significant
efforts in IT and product development.
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Part of Decathlon’s success in penetrating the local market was its ability to
translate online demand into physical retail prowess, incorporating technology
into everyday experiences for shoppers. For example, shoppers can don a virtual
reality headset and experience tents through a variety of weather conditions,
allowing them to experience their purchase even before they walk out of the store.
Additionally, the smart cashless check out process and visual merchandising
within the store are two other tech-powered innovations, which has helped
Decathlon improve its customer experience metrics.
c. Advance in logistics.
Lean logistics comprises the strategies enacted to identify and remove
wasteful/unnecessary activities from the supply chain to improve product flow
and speed. It involves activities such as limiting excess inventory and improving
freight transport efficiency.
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4.5. Government globalization drivers.
a. Tariffs barriers.
When tariffs increase, businesses generally have one of three options: Absorb the
higher cost, increase prices to pass it on to customers, or rework the supply chain
to avoid the higher tariffs. However, the general trend in the future is increasing
globalization by Free trade agreements. FTA do not just reduce and eliminate
tariffs, they also help address behind-the-border barriers that would otherwise
impede the flow of goods and services; encourage investment; and improve the
rules affecting such issues as intellectual property, e-commerce and government
procurement.
b. Trading blocs.
Clearly there are global supply chain implications resulting from these trading
bloc structures that many, if not most, firms face. The creation of trading blocs is
that the larger markets result in higher efficiency and productivity through larger
factories and lower overhead. Such factors benefit large businesses that can scale
up their production and save money.
With the trend of globalization, Decathlon has opportunities to develop its supply
chain. This business can freely choose potential markets and expand the supply
chain to other areas.
a. Inbound competition
Decathlon has 10 production plants where they manufacture some of our articles.
In these plants, they develop the Decathlon Manufacturing Way (DMW) network,
which aims to increase operational excellence when it comes to managing teams,
devising manufacturing technologies and processes, implementing continuous
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improvement methods and organising flows. This DMW network can be accessed
by their partner suppliers.
The company forms long-term alliances with the best industrial suppliers, whom
it frequently audits to ensure safe working conditions. By carefully choosing its
partners, the company can ensure productivity without abandoning its core
values, such as improved risk management and improved times to market. They
maintain long-lasting relationships with their suppliers because they have
proprietary technology or sensitive production volumes.
b. Market competition
In general, Decathlon is way more affordable than its competitors. It is part of the
brand’s identity to offer “the best sports products to anyone .”
In terms of pricing strategy, there are differences between Decathlon and its
competitors. Indeed, we observe that the entry price itself is highly differentiated.
Decathlon’s most frequent price is lower than its competitors like Nike and
Adidas, well-known for selling sports products. What catches attention is the
difference in terms of maximum price. In the case of pricing comparison, we
found that a basic jogger made of French terry – brushed or unbrushed- is priced
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at €39.99 and €39.95 at Nike and Adidas, respectively. On the other hand,
Decathlon offers similar products at €9.99.
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5. THE GLOBAL SUPPLY CHAIN MANAGEMENT ACTIVITIES OF
DECATHLON
From the day our first researcher was hired in 1990 until today, the significant
increase in investment in R&D clearly illustrates its importance to Decathlon.
upstream, Decathlon SportsLab carries out research programmes into the needs
of sports people.
Downstream, it also checks the technical balance between the brands' offer and
the expectations of users. Decathlon SportsLab deploys considerable resources in
order to properly carry out the 5 steps essential to any scientific approach
(observe, understand, imagine, experiment and check):
On average, this organisation enables their teams to register 40 patents per year.
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5.2. Procurement of material and suppliers’ relationship
a. Raw materials
Cotton
Decathlon’s new code of conduct, issued in 2017, also includes a ban on cotton
from Turkmenistan in addition to Uzbekistan.
Although it's a natural produce, cotton farming has an environmental and social
impact.
These impacts are mainly linked to the huge amounts of water required to grow
cotton. They are also linked to the use of pesticides, which impact biodiversity,
contaminate the soils, and also affect the people that grow and harvest it.
To play a part in reducing these impacts, Decathlon are committed to getting their
supplies through three more sustainable sources:organically grown cotton (16%),
BCI (Better Cotton Initiative) cotton (78%), and recycled cotton (6%). Cotton
from sustainable sources today represents 95% of the cotton used at
DECATHLON.
Recycled polyester
Wool
A code of best practice was put in place in 2018 with breeding farms in South
Africa, then extended to Uruguay and Argentina. We make sure that breeders do
not practice mulesing, that their animals are raised in wide-open spaces and that
the living and shearing conditions are good, while animal welfare requirements
are being followed.
Feathers
Fabric
Biton
The purpose of Decathlon is to design fabrics that are suitable for sports uses. The
main impact of dyeing is that a lot of water is used along with high temperatures,
which leads to certain CO2 emissions and this is what makes the dying process
very polluting. The BITON technology is less significant than conventional dyed
fabric because in a way, only one thread is dyed out of the two.
Dope dyed
Dope dyeing is the process of integrating the color directly into the varn when it's
being made. The benefits of Dope Dyeing are that it saves energy and reduces
water consumption. Dope dyeing enables us to offer durable color fastness that
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will never lose its color. So when you choose a Dope Dyed product in store, you
are going to keep it for 10 years.
Packaging
As a result of the pandemic, the number of hangers collected in the stores and
warehouses naturally decreased in 2020 due to the COVID requirements on
minimising the handling operations at checkout as much as possible, combined
with the increase in e-commerce. The cycling rate of hangers reached 38.6%, and
their reuse attained 22% worldwide.
b. Supplier
- Tier 3 suppliers: those that work with the suppliers of Decathlon’s suppliers
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technical, logistics and ethical criteria to select them. Partnership can start when
a factory meets all these criteria.
By the end of 2020, Decathlon had worked with 1007 tier 1 suppliers (finished
products and components) and 346 tier 2 suppliers located in Africa, the
Americas, Asia, Europe and Russia. Among these factories, nine belong to
Decathlon.
This meticulous selection of suppliers and this rigorous monitoring has allowed
Decathlon to forge solid relations based on trust. This results in establishing long-
term collaborations. Decathlon greatly favors these types of long-lasting
relationships, given they are more aligned with Decathlon’s values. Decathlon’s
aim is to subsequently augment the number of Decathlon’s suppliers in favour of
long-term partnerships.
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Decathlon shares with Decathlon’s suppliers the same desire: offering you
products with the best value for money. A goal that must be achieved in the right
conditions, where everyone benefits from an optimal operational framework. For
this reason, Decathlon’s partners are committed to providing their employees a
good quality working environment, based on respect, the teams' fulfilment and
preserving the environment.
RTID technology
RFID is an abbreviation that refers to any electronic device that uses radio waves
to facilitate the communication of data for the purpose of identification, and
sometimes to locate and/or sense the condition(s), of animate and inanimate
objects.
Decathlon is now using RFID "all over the supply chain, from factory to stores”.
Whether the reader reads a pallet or a box, each item included is read and the data
in the central system is updated. The company aims to have 100 percent of its
products tagged "as soon as possible,"
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retailers to have automatic replenishment data sent back to its stores to make sure
that shelves are always fully stocked with inventory.
Not only are sales associates alerted when there are misplaced items, but
inventory managers are also able to better understand their customers through
data collected about how items move on the sales floor. With these valuable
insights, managers can make informed decisions about inventory and maximize
store profitability.
5.4. Logistics
Logistics network includes 69 warehouses and logistics platforms, distributed all
over the world, allowing Decathlon to serve countries where Decathlon have a
presence.
a. Air transport
Decathlon’s goal is that the air transport mode represents less than 1% of
Decathlon’s products' transport by 2026.
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Before 2018, Decathlon resorted to air transport up to 6%. It's share today is only
4%. To continue making progress in this direction, you have to understand why
Decathlon still uses air transport in certain circumstances. And especially how
and what Decathlon is going to replace it by.
Decathlon knows that air transport has a very high carbon footprint. But it is not,
it's only failing. There are also plenty of negative impacts on logistics. To
highlight these and involve Decathlon’s teams, Decathlon have implemented
weekly monitoring. Decathlon aims to make our teammates aware of the
necessity, at all times, to make other modes of transport their first choice.
- The cost: air transport has a negative impact on our productivity because
receiving stock in the warehouse requires an extra teammate than usual.
- Stock: the pallets, not immediately picked, take up space to the detriment of
other products. Their presence therefore needlessly increases stock levels.
The alternatives: Transferring from air flows to rail flows. An option already
made possible with railway lines connecting France to Germany, Russia and
China, for example.
b. Road transport
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Decathlon have included carbon valuation in Euros in Decathlon’s negotiations
for transport between Decathlon’s different warehouses and stores. The idea is to
persuade Decathlon’s teams to use “clean kilometres”. It means using natural gas,
vegetable-based oil and electric first (for big conurbations) rather than diesel.
Decathlon have already noticed an improvement for road transport between our
Regional Supply Chain Centres and our Continental Supply Chain Centres. At
the start of 2020, 25% of our kilometres Decathlon is “more sustainable” thanks
to our negotiations. On the trajectory side, Decathlon aim to achieve 35% of
“clean kilometres” in 2021, 50% in 2022 and 75% in 2023.
Decathlon believes in the principle of subsidiarity because every region has their
own specific challenges and issues. It means the decisions should be taken as
closely as possible to where they have an impact. Decathlon is more involved in
our decision making, and that makes our measures relevant to everyone's needs.
As a result, each country then decides on measures that they want to conduct
locally.
5.5. Sales
a. Retail and distribution channel
Decathlon’s products are sold through our website and in 1647 stores distributed
worldwide (including 48 in the UK). These contact points are important, because
they allow us to create the most direct connection with you the sports users.
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through the tills and make purchases online. Decathlon also have Customer
Relations Centre providing answers and supporting buyers since 1999.
b. Replenishment
Decathlon was looking for a solution to be able to provide accurate data on stock,
as well as save time taken to do stock taking manually, impacting on in-store
efficiency and productivity.
StockBot is easily deployed within different stores as it does not require any
layout modifications and is seamlessly integrated with the existing software
systems.
StockBot reads and detects all the products in-store and then validates the data.
Using this type of technology helps gain a better visibility of stock, and of course,
automate inventory tracking and workflow.
StockBot provides data on stock and business and is easily integrated with RFID
tags in-store. With StockBot once set up, pressing one button means the robot is
able to do inventories automatically, in order to save time.
Technology integration
The new store of Decathlon in Eva Mall, Bengaluru is equipped with tech-enabled
innovations. It has a VR system that allows the customers to experience the
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different types of camping tents and have a look at the products and has improved
the customer experience at the stores.
The Decathlon app allows customers to locate the exact position of the products
in the store so that they can navigate easily in the large stores. The customers can
also scan the RFID tags of the products via the app and obtain more details about
the products and look at the verified customers’ review as well. The payment can
also be done online so that the customers don’t have to stand in the queue for
checkouts, they just have to scan the QR code to confirm the purchase.
In Europe and much of the world, the company controls every aspect, from
product conception to design to retail. This vertical approach is much of what
allows it to produce its famous $10 backpacks, $30 puffy coats and popular "two-
second," $60 tents.
c. Weaknesses
Consumers may have a unique set of buying habits, something the company is
working to identify in detail. For instance, U.S. customers like to feel and touch
products before buying, so Decathlon needs to ensure the shelves are stocked All
of this leads to a heavy focus on proper forecasting.
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7. RECOMMENDATIONS
Supply Chain Dive that with information in hand, order fulfillment can be
optimized by a proper distribution center floor layout. With slower moving items,
it's key to keep them out of the way of the more popular inventory.
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REFENRENCE
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