Host Mike Graen is joined by University of Memphis President, Dr. Bill Hardgrave, to discuss the state of omni-channel in 2024. Topics of conversation in this part 1 episode include:

- Retail technologies and RFID

- Omni-channel retailing and inventory accuracy

- Inventory accuracy and its impact on retail sales

Dr. Hardgrave, it is great to see you once again, we,

we talked about a year ago or so I know we you and I've talked

several times since then. But you've, you've actually taken

the bait to agree to join this, again to talk about omni

channel. For those of you who don't know, Dr. Hardgrave, go

ahead and introduce yourself and let folks know who you are.

Hey Mike, well, hey, thanks for having me on.

You know, despite the disaster of the last time I was on your

show, you invited me back. So thanks for inviting me back.

And, you know, since we're giving weather reports, I'm in

Washington, DC today, and it is raining here today. So love it,

I guess maybe it's going to move your way or something. But I'm

happy to be here. I'm, I've known Mike for a very long time.

And when I was at the University of Arkansas, and in through my

days at Auburn, and now serve, happy to serve as the president

of the University of Memphis for the last two years.

Incredible. Incredible. What do you doing in

Washington, DC, you're supposed to be in Memphis. Solving all

Memphis problems, right?

Well, you know, part of the way we can solve

those problems in Memphis is through our representation here

in Washington, DC. So appear on them, get up here, you know, a

few times a year and visit with our delegations and make sure

that they are aware of what's important to us. And I think

we've got a really good reception from our congressmen

and women and our senators. And it's just part of what we have

to do as a university. And part of what I have to do as the

President.

That's awesome. That's awesome. So I know you

you I mean, you belt, you mentioned us. So let's just

build on that you and I met when, when we started doing this

crazy innovative technology called Radio Frequency

Identification, I think it was like 2003, 2004, something like

that. You are proud of the University of Arkansas staff.

You have the leadership and initiative to start at the

University of Arkansas RFID lab. And then you said, well, bigger

opportunities await us. So I'm going to go to Auburn. And you

became the dean of the business school at Auburn. And not only

did you do that, but you brought the lab with you, which is

fascinating. How do you pull that one off, which was

outstanding, and then got promoted to Provost of the

Auburn. And then just recently, I guess, a couple years ago, got

a chance to do take a role as the president of the University

of Memphis, what in the world? And then somehow you have time

to stay relevant to all of this omni channel and RFID retail

technologies? Do you ever sleep? I mean, how in the world do you

get all this stuff done?

I you know, back I'm blessed that I've been able

to, in my time as a as a in higher education to kind of

straddle that fence between higher education and industry

and, and I'm gonna, I'm gonna correct you, Mike. And so don't

don't get upset when I correct you on something. It was before

RFID that you and I work together, you forget that it was

the class that I was teaching. We did a project on retail link,

when you were at P&G, and you were the representative of class

projects, and you just beat those poor students up. And that

was I believe, Mike, that was not 1999. So Oh,

my gosh, I completely forgot about that.

Yes, yes, I do remember that. Yeah,

it's so anyway, so for all those join us today,

Mike and I have known each other for a very long time. And Mike's

an incredible voice and, and force in retail, and I'm blessed

to be here as well. But, you know, Mike, I, it has been one

of these interesting journeys, where I've, I've, you know,

transition from business before I went into Higher Education and

just been been able to kind of do both and work with great

companies like Walmart and got started with Walmart on in their

RFID project when they made that announcement in 2003. And it

just kind of kept kept with it along the way. And, you know,

RFID has broadened up to, you know, certainly be a tool but,

you know, just beyond that, you know, retail technologies and

things that will I know, we'll talk about today with, you know,

serialized data and, and identification and all those

things so that you know, the lab Yep, the lab started as a as a

Genesis there from Walmart in 2003. And when they started that

effort, and announced that they wanted their top 100 suppliers,

tagging pallets and cases they Dan Phillips was at Walmart at

that time as the VP and I was doing some projects for Walmart

and Dan said, Hey, hey Bill he got actually was a badge. I was

at Walmart so much and what happened to be up there? Dan,

somebody walked by pulled me in and said, Hey, Bill, what do you

know about RFID? And I said, Well, I can spell it. And he

said, good enough, you know, let's, let's get you, I want you

to get started on this project. And, you know, and things just

took off from there. And, you know, Walmart wanted us to have

a lab there at the University of Arkansas to help the suppliers

because you think back 2003 Nobody really knew what this

technology was. And Walmart was certainly on the forefront of

that. So we had a, you know, the first foray that we did in the

lab was to help the suppliers know, how do you tag a pallet in

a case at that time, and of course, it's, we the lab has

kept that laser focus on, you know, the business value of

RFID. Right? It's just, you know, how do you make that

technology work for you? How do you get business value out of it

in the lab is, as you said, we grew a lot at Arkansas. And then

when I when I moved, made the move to Auburn, it followed,

followed me to Auburn, and, you know, Justin Patton and the crew

down there and settled just done a fantastic job at that lab.

100% agree, couldn't couldn't have said it better. By

the way the that lab, I was talking to him I'm still very

actively involved with the lab and you are as well play, you

know, play a very important role, continuing to kind of lead

that work, etc. Justin told me the other day, he has over 100

students now working part time, not only on internal projects,

but projects with retailers, with brands, etc. And just to

probably put you on the spot and embarrass you, one of the key

ones is your son, he is following in your footsteps and,

and doing a lot of really, really great stuff. And it's

just amazing. Because you think about universities, the primary

role of a university, even though you're in Washington

doing whatever you're doing today, is to educate and equip

students to take jobs in the industry. Now, what a great way

to have 100 students working on projects with retailers, if you

think they're gonna hire somebody who they're gonna hire

the person they've been working with the last six months, it's

just an incredible opportunity. And your son is just doing some

great stuff at the various companies he's been working

with. Yeah,

you know, in that, and that's been the focus,

you know, since we started the lab is it's always been

predominantly housed by students. I mean, that's, that's

who serves as the the workers there. And it's, you know, only

had a handful of full time workers over it's over 20 year

life. And it's all been students, I mean, 1000s of think

about this, in its 20 year life, 1000s of students have worked at

the lab and moved on to, to great jobs in industry and

graduate school and that type of thing. And, you know, makes me

feel a little old, Mike, that my son was two years old when I

started this effort.

Oh my gosh. Come here, Gavin, I want to put a tag

in your diaper around the house. Oh, my goodness, that's crazy.

Well, let me let one more one more kind of just career I

you've got to have people that are assistant professors

associate professors thinking about moving in, who are coming

to you and going, how do I go from what I am today? To being

the president of the university? What are your keys to success?

What are the kinds of things you would tell them? In terms of,

hey, I want to follow what you've tried to do and the

career progress you've made. Talk to us about what were the

key success factors from your point of view?

Well, you know, I wished I was I could say that

I had a plan and, and executed on that plan. But you know,

Mike, I've just, throughout my career, I've just been open when

a door opens to look at that opportunity. And, and, you know,

sometimes you say no, thanks. But more often than not, I

looked at it and said, okay, that, you know, I can do that.

And that looks a little bit different. And, and, you know, I

I would have never dreamed that I would have been a president of

the university and never dreamed that I would have been in higher

education. You know, I first in my family to go to college,

actually first in my family to graduate high school. And, and

so for, for me to have that I didn't have that vision because

I You can't you can't be what you can't see. And I never, I

never saw that. And so just fortunate that all on my career,

you know, people been putting my path and I've opened some doors

and you know, just you one thing my dad did teach me if my dad

was a construction worker was Yep, well, but just work hard

and mix up a lot. And you know, Mike, if you've been around me

long time, you know, I'm not the smartest person in the room, but

but I can I can outwork most. And and I still hold onto that

today, I'll you know, I will. I'm not afraid of hard work, I'm

gonna do hard work and, and, you know, I tried to treat others as

I want to be treated I, as a leader have always been a

servant leader, which means I put a put others in front, you

know front of what I'm trying to do and, you know on a daily

basis and I've said this actually since I've since I've

been a Dean, a Provost and now President, is I tell everybody

who works at the university, whether it's somebody who's

cutting the grass or somebody's VP, I tell them two things. My

job is as President when it was Provost, the Dean, same thing,

two things, get you the resources, you need to do your

job and remove the hurdles for for you so you can do your job.

Why, and people need to let me know what resources they need

and what hurdles get in their way. And I'll do my best to take

That's, that's tremendous. One of my favorite

care of those.

question, when I had people reporting to me was what's help

look like? And there's a lot of people that can answer that I'm

good now, let have a list, what's help look like what does

help look like? Yeah. If you come in here and lay out these

challenges you've got but then you can't answer the question

what's help look like then go and think about that question,

because I want to help you. But you got to tell me what help

looks like. Because otherwise I'll do stuff that doesn't look

like help. Yep, yep, that's it. That's it? Yep. That's awesome.

Well, let's, let's get into omni channel. Because, gosh, we could

talk for another 45 minutes, I'm just just this kind of is career

advice. But in addition to your day job, which is running a full

time University, which is incredible. You've also had the

ability to have your, as we talked before, very, very laser

focused on retail technology, retail supply chain, retail,

specifically RFID. And that's morphed into more of an omni

channel focus, because part of the technology suite that solves

product location and knowing what you have, and where's it

located in the store, also can be used to, to use that for omni

channel purposes. So the purpose of this is really just to talk

about the state of omni channel. And that's really where you

spent a lot of your time over the last several years just

focused on an omni channel. So tell us a little bit about the

omni channel business? Why did you choose this field? And how's

it changed over time?

Well, it really is, at least from this idea of

channels, right? And you think about the work we're doing with

Walmart, and at the time that we were doing that, right, you

think about the late 90s, early 2000s, you know, the internet,

you know, had been around but we it was really at an at an early

age, right? That think about, you know, 2003, 2004 the iPhone

didn't exist, right? So having everything in the palm of your

hand didn't exist. And so what we saw was that, you know,

retailers, you know, who had traditional channels, and you

know, then they started adding these ecommerce channels. In

fact, Mike, do you have a, I think, there, if you do pull up

that first slide, I think that it might put some context here.

Yep.

Matt, you're gonna have to let me participate on

the screen sharing, please. Go ahead and talk through and and

while we're so

so we had we had retailers who, who had

traditional channels, you again, the Walmarts, and Target, you

know, Macy's of the world who, who had store storefronts, and

people came in and, you know, what we think of as traditional

retail. And then, you know, when we had the growing e commerce,

you know, of course, Amazon would come to mind, but many

others at the time. And what we saw then during that time was

traditional retailers like Walmart, adding, an E commerce

channel. And one of the things that that most retailers did and

and, you know, Walmart did this was they, they, it was actually

completely separate business unit. And, I mean, completely

different team, different systems, different locations,

and they treated as two different things. And that's

fine, because you now create, you went from a single channel

to multiple channels, but the channels didn't interact, you

know, the E commerce if you were if you bought something from

online store, you know, retailer A online, the traditional didn't

have any visibility into that and vice versa. And in fact, we

saw retailers Mike, I know, you saw this is that they built

fulfillment centers that were just for the online business and

there was no crossover of those things. And so there Yeah, there

you go. Got it. And, and so what we saw then was, you know, that

that was that was certainly value add, but it created these

multi channels, and so we saw these proliferations and then

what we saw was, well, the pure online you think about those

that's still a uni channel, it's still one channel. So in Amazon

was just one channel. Well, you can't serve the vast majority of

customers with just one channel. So we started seeing Amazon,

right add physical spaces. And we saw that even with anything

about Warby Parker and all, you know, other places where they

started just online, they realized, oh, wait a second,

we've got to have multiple channels. So we went from, you

know, unit channel and traditional e commerce to multi

channel, but they weren't truly integrated. And they, they

didn't have one view of the customer, and they didn't treat

inventory the same across those channels. And that's really what

led to omni channel right? This idea of omni channel, you know,

having the product, when, how and where she wants it, and

having one seamless view of that customer. And so, in doing so,

several years ago, if you go to the next slide, I came up with

something that just in the gods of the lab you like to joke

about and if they're watching today, there, I can guarantee

you they're falling out of their chair laughing. Because they

this is what I call the omni channel house. And I and I did

this to to, to try to put it in simple perspective of what what

are the pieces to be in an omni channel retailer. And this grew

out of a time this I think I first did this slide, Mike is at

the time I made this house, I think it was in 2016. This was

how long ago we started talking about omni channel. And at the

time that I did this. I think about 80% of them at that time

said oh yeah, we're omni channel. Well, we don't have any

80% of them are omni channel today. And you know, and I think

it was just maybe more wishful thinking than anything. But this

kind of lays out, hey, what what do you what do you need to be

omni channel, and it's in this whole idea of you've got to have

inventory accuracy. And I'm sure we'll talk about that. Not that

RFID enabled inventory accuracy, because I still believe that the

only way you get a reliable, accurate and cost efficient way

to have inventory accuracy is via RFID, you've got to blend

the physical and digital channels together, you have to

have visibility to that single unit. And then you have things

like buy online pick up in store or ship in store, which are

characteristics. And there's other characteristics there. All

of that, of course leading to that, you know, that superior

customer experience, but this was just, you know, something to

show to say, look, if you think about omni channel, you can't

you can't start say, Well, I've got buy online pickup in store

and that's what I'm going to do. And that makes me omni channel

No, no, you've got to have information accuracy you've got

to blend the digital and physical channels, you got to

have visibility, that single unit, then you can do these

other things.

I know we're gonna get to this here in a little

bit. But what I find interesting is you started this conversation

off saying, when we first started devices like this, we're

not even available. Right? Right. And really the retailer

was in control of the messaging, and the product assortment, etc.

Now, your superior customer experience is almost at the

bottom of this. It's a foundational because if I want a

specific item, I have no longer have any connections to

retailer, my loyalty is not to the retailer, my loyalty is the

item I'm looking for. Because I have all kinds of options with

this device. Yep. And so one of the things that would be very

interesting is, you know, we'll get into some of this later, but

the folks who don't get that if they're in retail, and don't

think that that availability is ultimately in the responsibility

of the customer. Wake up, because you're not going to be

around long. Because people have options and you don't carry it.

They're going to use your Wi Fi in order from somebody else and

have it delivered to their house. Thank you very much.

Yeah and Mike, that's, you know, one of the

things we have to think about from a historical perspective as

well, you know, there's generally what we see is the

three eras of retail, and you think about when retail, you the

beginnings of retail, and you know, let's just go back, maybe

retail has been around for a long time. Let's just go back to

the late 1800s, early 1900s, retail 1.0 suppliers were in

charge, right? Those who made the products because they

decided who could sell their products and for how much they

would charge. And then, as we got more retailers involved in

the retailers got bigger within we shifted to retail 2.0 Where

retailers were in charge, right because retailers decided what

to sell, and how much to charge. Yeah, but now, in the last 10

years, we have clearly shifted to retail 3.0 where customers

are in charge of customers to your point and that's why I

wanted to bring this up as customers demand anywhere,

anytime, any product retailing, and if you as a retailer, don't

have it, or don't have it, where I want it, when I want it, they

will they will use this, and they'll find it. Yeah. And and

there is the customers in charge if you're a retailer who doesn't

believe that you're in trouble.

Yeah, yeah. Awesome. Well, you got a couple of

practical examples here and a couple of other slides about how

it's evolved and change, I think it'd be really helpful to have

you cover these talk about, you know, the importance of

inventory accuracy in the traditional model. And then what

does it mean when we go to an omni channel platform?

Well, and thanks for putting up the slides. You

know, one of the things that we've looked at for some time is

is how important inventory accuracy is. But, you know, for

those who have been around retail for a long time,

inventory accuracy was just one of those things that you

accepted as well, it's not going to be real accurate. And you

actually retailers built business processes around having

inaccurate inventory information. Yeah. And, and I

kind of laugh because it seems silly to do that. But in the

absence of being able to have good inventory, actually, you

have to build systems around it, right. And inventory accuracy

outside of an omni channel is pretty straightforward. So you

think about a store. And it's just a storefront, you know,

traditional retail will inventory accuracy obviously

impacts your forecast and your replacement, which impacts your

product availability, customer satisfaction, your sales, it's

pretty straightforward. And we know that, hey, if we can turn

that dial on inventory accuracy, well, we can really, very

quickly impact sales. And we saw that in a non omni channel

environment in the early days of RFID of retailers going holy

cow, I can You mean I can get my inventory accuracy from 65% to

98%? Well, that unlocks right, a lot of this customer experience

in sales. But when you when you then layer in omni channel, and

the things that come with an omni channel that we just showed

you, for the omni channel houses, you can go the next

slide, it gets much more complicated, right? Because

inventory accuracy then plays a much bigger role. Because it's

not just about your forecast replacement, but it's about Well

Can Can I ship from the store? Do I have it in store? Can I

have visibility to it at the store that impacts the inventory

that we have it impacts the buy online, pick up in store and

research online buy in store. All of that which then impacts

you know, such things as unplanned purchases, it becomes

a much more complicated, but much more impactful element in

the you know, the journey to increasing your sales. And

that's where RFID that we've seen, you know when you can when

you turn that dial 65% 98% for example. Well, that's that

change that changes what you can do as a retailer. And conversely

Mike in in an omni channel world, if you have, poor

inventory accuracy, you're in a world of hurt. Because you can't

do such things as be effective at buy online pickup in store.

You can't be effective in ship from store. And if you can't do

those, your competitors will figure out a way to do it.

Great point. So you've got a couple of terms

here. I think people have heard of BOPIS before, which is buy

online pick up in store. You very quickly said research was

ROBIS. I know I've heard it before many times but I'm not

sure the audience says yeah, Opus.

So ROBIS is a research online buy in store.

That's a pretty simple concept. Because you know, I'm sure that

most everybody listening, listening and watching today has

done that. And that's where you say, look, I want to I want to

go buy a new toaster. Let me go see if Walmart has what they

have in toasters and what they have, oh, I like this one. Do

they have it in stock? And you know, research six different

toasters. I found the one I want, it shows us his stock. Now

I'm gonna drive to Walmart and pick it up. 74% of retailers.

I'm sorry, 74% of consumers last year. Did that at least one

time? And what we know is that number you get in the habit of

doing that I do it all the time. Before I go to the store and buy

something does it have any consequence? If it's something

like a toaster, I'll go online find what I'm looking for then

see if it's in stock. And you know what Mike if I went to you

if I found the toaster I wanted and I went to Walmart and said

Do you have oh you don't have that one stock? You know what to

do. Then I look at Target and I say okay, just target up Nope,

they don't have it that I will find a retailer has it and I'll

drive there and buy that. That that's see. Without good

inventory accuracy, right retailers aren't show Knowing

that inventory, you're missing out, we retailers really miss

out on these. And there we call those hidden lost sales because

you don't as a retailer, you don't even know that you've lost

that sale. Because you never gave that opportunity for that

sale to ever occur.

They they came in, they looked around, they left

empty handed, they had no idea. You disappointed them? No,

that's right.

Yeah, that's exactly right. It's sad, because

this isn't like adding something to the cart, you know, and then

abandon your cart. You can you can keep up with that as a

retailer, but you don't know, as somebody comes in, looks around

and abandons, you know, just drops off your website, because

they saw that you didn't have that in stock, right? There's

nothing, there's no way to know that. So there's this hidden

cost to poor inventory accuracy.

All right. Here's the big question. Yep. You just

said 74%. I never heard that number before. 74% of consumers

routinely log on to check availability of products. Yep.

But my what my perception is very few retailers have the

courage or systems to deliver that data. Talk to us a little

bit about that. Because there's that I can think of three or

four retailers that actually say only three left, only four left,

most of them say check store for availability, which is just

frustrating, because you basically say, I'm not telling

you even if I know. Talk to us about that, that trend? Because

if we got 74% of shoppers customers routinely looking for

that. What about the ones that don't do that? And what are the

potential risks in terms of their loyalty?

Well, so So you know, that number is, if you

think about it, right. 74 percent consumers, you went out

and research online before they they wanted to go to store and

buy. And at first you look at that number go, Wow, that's a

really high number. But think about it, right? I mean, we

almost everyone does that now at some point, right? In the

retail, whatever it may be buying. But now now, then the

the flip side of that is as of last year, and we did a pretty

extensive study in the last few years on on buy online pickup

store. Only 17% of the retailers as of last year when we were

when we last updated study actually displayed in store

quantities on their website. Wow. So so now let's say I've

done a research online buy in store, right? And I go looking

for this toaster. Now, retailers who are confident in their

inventory. We're seeing you know, we're seeing them put

their their inventory out there. And they say yeah, we have, we

have three, you know, one of these three, but we'll see

others it'll just say in stock. And they don't take they don't

tell you how many's in stock question, huh? Do you really

have in stock. And, you know, I've had experience that I

shared this at a presentation that I did late last year, where

I was buying a ladder, and I won't mention the home

improvement store. But a ladder these are these are big, big

things right? And I was looking for particular ladder, this

local home improvement store said yes, we have it. So I went

to the store to get this ladder. I go in I can't find this ladder

anywhere. So I find somebody I chase somebody down you know it

takes a while to find somebody to actually help you in the

store. Say look for this ladder. You know they've got their

little handheld and said oh yeah, we've got six of them. So

my first thought was what if you show on your handout did you

have six so why don't you show me online that I have six some

but that's a separate issue right? We've got six of them. So

well where are they? I looked all over the place couldn't

find. How do you lose six ladders. And I walked out of

there empty handed. They didn't they did not have it.Sso but

Mike, the reason I shared that is for two reasons. One is the

showing it online. Two their inventory was so inaccurate. The

reason they didn't show me the quantity online because they

didn't actually know how many they had. They thought they had

six so they thought it was safe to at least online. Say yeah,

we're we're in stock. But now here's the downside of that. Do

you think I'll go back to that? That home improvement retailer

the next time I need something like that? No, because I don't I

don't trust that they will. Yeah, when I get there. Yeah.

By the way, did you find a ladder?

I went to another home improvement

Did they expose the on hands?

Yes they did actually yes while I was

standing in the store frustrated the first one I went online

found it the second one. It showed me that it was there, I

went over there and actually bought it