In an effort to reduce its return rate of unsold books, Japanese publishing house Shogakukan Inc. has introduced a two-tiered distribution system for retailers. The publisher has deployed RFID technology to keep the potentially complex system accurate.
Unsold books returning from bookstores is an unwanted reality of the publishing business, especially since many of the returned volumes are destined to become waste product. Shogakukan estimates that if just 25 percent of the books returned to publishers in Japan are designated waste, the financial loss would be the equivalent of $1.5 billion U.S. dollars.
Shogakukan is combating the problem with a binary distribution system. Booksellers can take books on a consignment basis, under which the books can be returned at no cost. Booksellers can also choose a non-consignment option, which offers a higher profit margin for the retailer, but creates an extra charge if the books are returned. The goal is to encourage retailers to put more thought into the structure of their orders, ultimately resulting in less returns and waste. For instance, a bookstore might use the non-consignment option for the first batch of an anticipated new book with the expectation that the book will sell out, giving the retailer higher profits and no return penalty; later orders when the book might move more slowly or not at all would be placed under the consignment plan so unsold inventory could be returned at no cost.
The two-tiered system could result in inventory confusion for both retailers and the distribution house. This is where Shogakukan’s RFID solution, developed by Suuri-Keikaku Co. Ltd. and featuring UPM Raflatac’s UHF EPC Gen2 Crab inlays, comes into play. The RFID tags are encoded with data regarding the choice of sales system and placed in each book, helping to eliminate human error by automating data processing and logistics operations.
So far, Shogakukan reports good results from the system, and Mikko Nikkanen, the Business Development Director, UPM Raflatac RFID, says the system could work well for other elements of the publishing industry.
“Book clubs making direct monthly book deliveries have good potential to enjoy the benefits of a full RFID implementation. Customer return rates can rise above 20%, and high efficiency for returns in the supply chain is crucial. UPM Raflatac has channelled significant resources into the development of UHF products suitable for applications of this kind,” says Nikkanen.