Mike Graen sits down with an industry panel discussing RFID at retail that includes:

Andy Murray – Founder and Executive Chair of the Customer Centric Leadership Initiative – Former CMO of ASDA, P&G and Saatchi and Saatchi.

Deanah Baker – SVP-General Merchandise Manager Apparel (Retired)  - Business leader for the RFID initiative at Walmart.

Bill Hardgrave – President of the University of Memphis – Industry expert on Omni-channel.

Justin Patton – Director of the Auburn RFID Lab.

Understand the customer journey implications, retail merchant implications to RFID in the Omni-channel space.  Hear the back story of how Walmart implemented an RFID solution to drive on hand accuracy in their stores for both Brick and mortar and omni-channel retailing.

I am super excited to spend some time talking to an

incredible panel talking about on shelf availability, on hand

accuracy, buy online pickup in store and Walmart's initiative

to get back into the RFID business to get their on hands

correct. I'm joined by several incredible guests, including

Andy Murray, who is the ex CMO, Chief Marketing Officer at ASDA

Corporation, also the ex CEO of Saatchi and Saatchi X. I'm

joined by a retired Senior Vice President Deanah Backer, who was

I attribute to the leading of getting Walmart back into the

RFID for apparel space and really excited to hear the story

behind the scenes story behind that. Dr. Bill Hardgrave who is

the University of Memphis professor but also an industry

expert in buy online, pickup in store and a new term called

research online and buy in store, and Justin Patton, who's

the director of the RFID lab. So without any further delay, let's

hear what the panel has to say. Well, good afternoon, everybody.

My name is Mike Graen and it is a pleasure to welcome you to

another version of the conversations on retail and the

University of Arkansas podcast. Matt Fifer and Donnie Williams

and I from the University of Arkansas and Conversations On

Retail have been doing this for about a year now. And this is

obviously the biggest one we've ever done. I think we've got

over 60 people who are registered and they are still

coming in and we got another 50 or so that are at a conference

in Las Vegas, they've asked for a recording of it. So I'm

really, really excited about this one. And I appreciate our

guests taking the time, we're going to we're going to go

through a couple of just quick logistical ground rules here.

First off, just a little bit of background on me, I've been in

the industry for 40 years, spent 25 years with Procter and

Gamble, actually working with Andy at Procter and Gamble,

he'll probably jump into that a little bit, and then we both

were at Walmart for a while. I was in the retail technology

area, specifically RFID and retail links and things like

that, and then left Walmart and actually had them call me and

come back to do some work of RFID. And that's really the

purpose of today is to really talk about RFID and the

implications of the omni channel customer. So just a couple of

quick logistical ground rules. Number one, we're going to try

and keep this very interactive, we're going to ask you to stay

on mute if unless you have a question or a comment. Keep your

video on when especially when you're asking questions, and

obviously the panelists are going to keep their video on as

well. If you'd rather actually ask your question anonymously,

just go ahead and use the chat function and we will be

monitoring the chat function. And we this is probably not as

relevant as it is other times but usually we have you know,

competing suppliers on here who've got technology so we want

to make sure we're following antitrust guidelines and making

sure that we're not talking about pricing or anything that's

competitively sensitive. Okay. Again, thanks to Conversations

On Retail with Matt Fifer. Look him up he's he's doing some

really good job of educating the retail community about things

that are going on and capability that's available. And then a

University of Arkansas with the supply chain department with Dr.

Williams and Brian Fugate are doing a great job of really

driving supply chain education. And I should not say this with

Dr. Hargrave on but they do have the number one Gartner supply

chain organization and go hogs, that's all I'll say. Alright,

I'll pay for that one later. Okay. No more background and

detail. I want to open it up and do some introductions first. And

the purpose of this is really to hear from the industry leaders,

in my opinion around the omni channel, the customer shopping

experience, the ability for retailers to have enough

confidence to expose inventories for buy online, pickup in store.

We've got a great panel set up for this but we're gonna start

from the left and Deanah, why don't you go ahead and unmute

and introduce yourself to the to the audience.

Okay, I think I am unmuted, right?

You are.

Oh good. Awesome. So thanks for having me Mike.

Deanah Baker, and I just retired from Walmart after a 32 year

career in merchandising. And my last position there was SVP

General Merchandise Manager of Omni apparel for Walmart US.

Omni apparel Walmart US, that's a big job Deanah.

That's a big job.

Gotta love it.

That's awesome. That's awesome. I'm gonna say

I'm gonna ask this question just because I saw it on your

LinkedIn profile, so I'm assuming it's public knowledge.

What's next for Deanah Baker?

Well, I was highly creative and I chose the name

Deanah Baker Consulting. So I am entering into the world of

consulting. And the reason I went with my name is because

it's spelled so uniquely, I knew that it hadn't been taken. Free

and clear. But that's what I'm doing next, just in mode of

discovery right now, Mike.

That's awesome. That's tremendous. So your

LinkedIn profile QR code is there. If anybody wants to reach

out to her, during or after this conference, feel free to do so.

Dr. Bill. Hardgrave, President of University of Memphis, right?

Thanks Mike.

Memphis University, right?

Yes, sir. Thank you.

All right.

Yeah. Appreciate the opportunity to be here.

Awesome. I've got you set up, but why would I have

the president of a University on a podcast? Because Bill has

spent probably the better part of 20 years focusing on retail,

focusing on technology, focusing on the omni channel, customer

buy online pick up in store, and he's going to spend some time

yet you probably I don't know, if you still do that as a job or

if it's a hobby, or it's a little bit of both, but he is

the industry expert, when it comes to that, so we're gonna

get to hear from him.

Yeah. So some would, some would suggest my job

as President is my hobby, and my real job is is retail and RFID,

but we'll take that up at a later time. So Mike, glad glad

to be here. Thanks for having me. I have worked with actually

worked with Walmart, when I was a professor at the University of

Arkansas since 1995, actually, and started on the RFID project

in 2003. When Walmart said in 2005, we wanted to start with

our first top 100 suppliers tagging at the DC. I've been on

I started working for Walmart on that project then, and I have

continued to work on RFID as a project and helping retailers

and brand owners across the world since that time, started

the RFID lab there at the University of Arkansas, which

moved to Auburn, and Justin has been with me for a long time

with who you'll hear from in just a minute. Glad to be here.

Thanks Mike.

That's awesome. Thanks, Doctor Hardgrave,

appreciate it. Justin Patton, he just set you up for a win man,

Auburn RFID Lab Director. You've been doing this for about 20

years as well. And you just told me I asked you a question kind

of off camera of, of how many people did you start with at the

lab and how many you have now but go ahead and introduce

yourself because you are definitely an expert in this in

this field with retail as well as other RFID formats in

aerospace and other things like that.

So we've been focusing on RFID technology

deployment since 2005. Lot of retail, clearly, especially

starting there at the University of Arkansas lab, and then also

working a lot with aerospace and aviation right now, whether it's

stuff in NASA up in orbit or you know, commercial aircraft for

baggage tracking and other things. A little bit of pharma,

there's a lot going on with food and restaurants, supply chain in

general. So it's not just RFID, either, you know, we kind of

moved in the past 17 years RFID, from especially passive UHF,

from an innovation technology to more of just a deployable tool.

It's not really innovation anymore. It's just something you

do. But we are very heavily focusing on any type of

serialized identification technologies that we can use.

Whether it's computer vision, you know, any type of RF

systems, whatever it may be, to try to figure out how we're

gonna get to serialized unit level inventory on everything in

the next 10 to 15 years.

Outstanding. Outstanding. So as I didn't I

didn't hear the number. How many did you start with in the lab?

And how many do you have at the Auburn RFID lab now?

So we started with, you know, it's about 15 to

25 that first year, when we were really growing up with students,

including me. And then now we have 90, I think, 91 people here

now, and 83 of them are students. So and it keeps

growing. It's been a supply chain has been a little bit

messed up the last few years in case nobody noticed. COVID

really kept everybody for a loop. So it's been a lot of

interesting activity and people trying to figure out how to get

their operations back in order for the last few years. So it's

kind of a boom time for any type of ID technology right now.

Awesome. Thank you, Justin. Mr. Andy Murray. Andy

and I have known each other for a long time started at P&G,

about the same time. He got the itch to really go into the

consumer shopper marketing brand work, et cetera, had some great

runs with brand works his own companies as CEO of Saatchi and

Saatchi X became a a thought leader in the marketing

department in the Walmart in US and then actually became the CMO

of ASDA. So, Andy, thank you for being here. I completely screwed

up your introduction because I did it for you but what else

you'd like to share with us? You're on mute Andy.

There you go. So Deanah thought she was on mute

and wasn't, and I thought I wasn't. So anyway, thanks, Mike

for that. Good to see you again. For those who don't know, Mike

was actually my day host at P&G and got me through the system

and hired and so I've known Mike for since I think 1984. That's a

long journey, and also was my boss in the end when I moved to

Fayetteville, but love the passion, very passionate about

the space of being customer centric, and how do you develop

customer centric leadership, and specifically now working a lot

around connected commerce in the different areas that that

entails. Currently, lead is the founder and chair of the

Customer Centric Leadership Initiative through the

University of Arkansas, which dovetails nicely to a lot of the

work Mike, you're doing around supply chain. So I'm excited to

be here and I look forward to these conversations.

Awesome. Well, I had you introduced last, but I want

you to go first. Okay, because from my perspective, Andy, all

of this discussion whether you're a merchandiser, whether

you're a technologist, whether you're in the supply chain,

whether you're a CPG, brand owner, whether you're a

retailer, it all about the customer, and the customers

choices about how they receive their products. So you have

spent most of your career focusing on that customer, the

customer journey. Tell us a little bit about that customer

today, tell us a little bit about what they're looking for,

and what kind of choices do they have?

Sure, you know, Mike, I think the customers big

core behaviors and thoughts and beliefs about the shopping

journey haven't fundamentally changed much, but certain

elements have certainly accelerated. I like to look at

the customer have having three budgets, we talked about the

customer having a budget, but they actually have three budgets

that really affects their behavior. They've got a money

budget, of course, a time budget, and a frustration

budget. And those will vary based on categories in terms of

how they shop, but it's really important to pay attention to

all three of those budgets in when we get to the subjects of

out of stocks and what that means. It really impacts the

frustration budget in a way that can influence significantly

behavior of the customer.

So so talk a little bit about the second two, which

is especially probably the last one, the frustration budget,

what do you mean by a frustration budget?

Well, it's what's it gets behind what are the

satisfiers and how much they're gonna give a certain situation.

So it when they're browsing, let's say an in store

environment, they're browsing a category, in their mind, they

allocate, let's say, 90 seconds for this particular category in

their mind, of how they're thinking about that experience.

And if they can't find what they're looking for, very

quickly, or within those 90 seconds, they're gone. And

they'll often leave the category, they'll often leave

the store without a purchase in that on that item. But when you

can satisfy that, that expectation faster what we

found, especially in refill categories, like you know,

razors and such, they might actually double back and give

you browsing behavior if you haven't exhausted their

frustration budget, but if they're out, if it's out of

stock, it really pings that frustration level. And some of

the research that that I've seen recently about this topic of the

impact on the consumer and their attitudes, is pretty phenomenal.

I mean, we think about out of stocks as an industry

professional, as a loss transaction, perhaps. But it's

far bigger than that, from the consumers perspective, it's also

a loss of trust. It's not just about transaction. And when we

look at the, some of the data behind that, it's pretty, pretty

phenomenal. I mean, they have expectations they manage, they

measure their experience based on their expectations. If they

expected to find it, and they didn't find it. That's what it

is, no matter what reason it doesn't really matter. That is a

ding against that particular area of frustration.

Interesting, I think about the research I had is that when

you're out of stock about 70% will, on the first time of that

particular item they regularly shop, about 70% will get a

substitute. The third time that happens, they'll switch brands.

And because they shop on habit, and they've got a limit on what

that means for them. If it happens four or five times, then

they'll often will also also switch stores. And that loyalty

factor we talk a lot about loyalty, but the truth behind

loyalty and I highly recommend reading the book How Brands Grow

by Dr. Byron Sharp but, but it's really more about habits and

taking friction out of their purchasing process. And if if

you can take that friction out, we tend to not think a lot about

loyalty we think about the habits and routines. And when

you start getting out of stock it disrupts that that routine,

and makes you go do other things that adds friction to the whole

experience, and that's where we tend to lose customers and

they'll switch out. When we were, when I was at Asda, we had

what's called a customer promoter score, which we looked

at what drove sharing and promoting the brand, and what

were the dissatisfiers. And routinely, the dissatisfiers, if

you were to rank order them, you'd have clean, fast and

friendly, as key drivers of dissatisfaction or satisfaction

at the top. But they also when those missed, it really spiked

the dissatisfied experience. But right there along with that was

I can't find the item I came in to buy. And whether it's out of

stock or too hard to locate, but mostly it was out of stock. It

was a huge driver of frustration and friction that was clearly

registered for the customer as as an annoyance that needs to be

addressed.

Absolutely, absolutely. So as we focus on

this, we learned really quickly that this this particular quote

from Sam Walton, this is just as relevant as today as it was when

he gave it. And it's probably even more so I would think,

Andy, because, literally, with this technology we all have with

us. If I go to the store and expect to purchase something,

let's say a printer cartridge for my printer, and I go all the

way to that store, I may even call them ahead of time and say,

Do you have it? Yep, looks like we got three and you get to the

store and you don't have it. People are pulling out these

phones, and literally ordering it from another retailer in a

heartbeat. So they're not necessarily loyal to the brand

ie Walmart anymore. They're loyal to the product they want.

And they can fire anybody they want simply by spending their

money elsewhere, this has made it a breakthrough to be able to

do that. So you better have what you want you you better have

what they want. And as we're going to hear from Dr. Hardgrave

in a minute, if you're going to, you're going to have enough

confidence to actually expose that inventory. It allows for

them to be able to make that decision to purchase it. So

Yeah

Go ahead,

Mike to just build on that. I think Sam's statement

couldn't be more true. But there's an added element today

that didn't exist when Mr. Sam shared those words. I mean, it's

true, the customer can fire everybody in the company and the

chairman. But today, they can do something much worse. Not just

not shop you but go to the reviews, and talk about you in a

way that impacts many, many more people than just them firing

you. It's also they put you on notice in ways that's very

public reviews and ratings drive so much in search, and and being

able to help customers make decisions. And the last thing

you want is those reviews spiking negative because of the

experiences they're getting. And that's what happens when you get

dissatisfied customers.

Great point. Great point. Let's, let's turn to

migrate a little bit. Deanah? Deanah, you are an interesting

position, I'm going to ask you to kind of unmute and tell your

story because I know if I go back to it's 2018 and 2019. And

you and I were having a conversation about I want to be

omni channel with my retailer at Walmart I have to become

relevant omni channel wise. And I think I showed you this chart

that literally showed the percentage of business that is

being done in an omni channel or electronic version. And it was

literally almost 37%, almost 40% of the apparel purchases were

were done online. And you wanted to you wanted to figure out how

to be able to do that more effectively. So go ahead and

unmute and tell your story. I think this is a fascinating

story of how Walmart got back into the RFID business, and what

the driving factors were.

Sure, happy to share. So at that time, and this

is probably the latter half of 2018 we were having a lot of

conversations as a team. At that time, Walmart stores and

ecommerce were working independently to try and serve

the customer with grocery pickup, you know, and scheduling

and trying to figure all the kinks out of that and really

growing by leaps and bounds, and then also shipping most GM and

certainly all of apparel to customers home via our fashion

distribution centers. So I wanted to be able to leverage

the store pickup process within what I saw as developing in the

stores, through grocery pickup for apparel and be able to

really leverage that inventory. The issue with with my goal was

that it's really hard to program a business that has a high

degree of variability in sales from store to store and has a

relatively short shelf life, right? I mean in apparel, the

aim is to sell through that inventory of a season, get a

high sell through, move on to the next set. And then in

addition, you just think about the the shirt you're wearing

right now the t shirt you're wearing. That could come in 10

or more colors, six or more sizes, so 60 SKUs, right, the

slowest of those size color combos might hold one item in

each store. And so, you know, gambling on building around

apparel was something that was going to be that volatile, we

were going to need some help. I knew the customer was rapidly

changing, you and I had talked. And they were adapting to

shopping back and forth across channels with ease. It was

definitely our problem to solve. And they were in the driver's

seat. So it didn't really matter if my goal was going to be

difficult to achieve, we had to figure it out. And, you know, so

I started studying other retailers and they were doing it

and seeing value in it. You know, we studied the likes of

Macy's, Lululemon, Target, and they all were, you know, full

steam ahead. I knew that in order to be included in the

store pickup program, and the internal tools that were being

developed for our store associates, apparel had to

become as systematic as possible, like the rest of the

box, and being a one off process was not going to really get any

traction inside our organization. I also knew that

resource investment would only occur if there was trust in our

inventory accuracy. No one was going to spend precious labor to

chase down phantom inventory, to then just ultimately disappoint

customers. Back to that frustration point Andy made

earlier. I knew inflating the inventory to ensure the items

were available was also not an answer, right, we need to be

confident in accuracy, down to one piece of each size color

combo of every program. So after researching and getting

leadership buy in, through those discussions, we were given the

green light to investigate further. So we came to see, see

you all. Met with you, and all of our assumptions were backed

up with the stats that you just shared with the group here. The

customer is indeed shopping more and more with Omni solutions for

their product. You know it you said 37 38% digitally

penetrated, whether it's you know, pickup bopis or direct to

their stores via fulfillment center. And then when you said

that the entire apparel industry, not just Walmart had

an accuracy rate of about 50%. That was shocking to me. You

know, it wasn't just my problem, it was an industry problem. So,

you know, I told you, I wouldn't be able to compete in an omni

store fulfillment, and I can't today, how do we fix the

inaccurate inventory data? And where in the world do I start?

So you know, as that journey continued, one of the first

steps was in understanding how RFID actually worked. And not

what I remembered from some attempts in the past and

overcoming that, I think was a huge step change for our

organization. We flew to Auburn University RFID lab met the team

there, including Justin, he walked us through. And we

learned about the technology behind RFID, the tickets

themselves, what it took to make a ticket even, and what,

depending on the route you wanted to take, what the

technology could or couldn't do. And so, you know, ultimately, we

decided, for a really quick win, our quickest win was to clear up

the inventory, make sure that we knew what we had. And we had

other discussions on infrastructure that could be

used, so we fully vetted it. But in the end, cost and time were

our two biggest factors that that made our decision. We

gained leadership buy in, we rallied the organization to

secure resources and develop internal processes and tools for

our store associates and 4000 stores. Because if we couldn't

make them successful in using the technology, it was going to

fall flat. Once we got that, we communicated with all of our

supplier partners, right and really rallied them and it took

a full year to flush through the inventory to be all RFID tagged.

You know that time we were doing store testing, making sure that

all the tags were being captured, and the scans were

good and that we could actually create the value that that RFID

was going to give us. So, you know, this I've super

oversimplified what went on in the interest of time, but, you

know, the truth is that none of this really would have come to

fruition had we not had advocates and champions within

the various disciplines of the box to really help us bring RFID

to a to Walmart and our dream a reality. So, you know, Mike, I

think you know, what you and I talked about as of late you

know, the the true success mark is the fact that not only has it

proven value for apparel, but by tackling the most SKU intensive,

the most laborious product in the box to manage it really can

now be leveraged across many categories inside Walmart right?

So many GM categories are now able to utilize that and extract

value from RFID.

So, two questions that I just got. The first one

is this wasn't Walmart's first go around about RFID. I mean,

Dr. Hardgrave mentioned that it started back in 2003, there was

a Sam's iteration, there was a Walmart apparel, one that ended

up having to get shut down because of some patent laws we

had to work through as an industry. You took a really

brave move to push back and say, it may not have been right, this

business case that then or we had some other issues, but we

need to move forward. And you did that with confidence. Tell

me what kind of because there's other retailers on the line here

who are probably having the same conversations, that doesn't

really work, and it's too expensive, etc. How did you

combat? I don't want specifics, but how did you combat that old

history of what we've done in the past? And why are we trying

this again?

Yeah, well, it's just you know, as a merchant, an

answer can be right or wrong, depending on the variables

around it. Right. So timing is everything. You know, there were

there were definitely hurdles in the past one just being the cost

of tickets alone, right, when you're talking about EDLP

opening price point on a large portion of the assortment. But

honestly, it was educating everyone in our organization of

why now was the right time, and actually what it would unlock.

So trying to focus on the goal of having apparel be picked.

That was the goal. And see, that was new. We weren't talking

about that in 2003. Right. So there was a new solution that

need to be met. And a problem to solve. And the technology was

right to do that. So I mean in all fairness, it's, it's the

timing was dead on for us.

Awesome. The second question I'm getting is you also

had a pretty large focus and direction on working

collaboratively with your suppliers, your brand owners,

because they're a part of that solution. They have to do the

RFID tagging at source in order for this to be successful. What

were some of the key Ahas and learnings and how you made that

successful? Because you got basically all of your apparel

suppliers to jump on board?

Yeah, yeah. Devils in the details is what I would

say to that. Because, you know, as a leader, you have to really

get down in the weeds with your team at the inception. And okay,

what does it mean, if I want to tag everything? Well, we have

umpteen different kinds of tags, right? We have stickers, what do

you do for that? We have things that are on metal, what do you

do for that? And really helping clear the way for them to run

fast, I think was was at the beginning. So there were a lot

of conversations with suppliers. Why we were doing this now, I've

always been of the opinion to share as much as I can with our

supplier base, because they are my hands and feet and extension

of what I'm able to do. And so really communicating the reasons

why to them, and then being able to question back kind of helped

me see some blind spots I had. And so just you have to leverage

them as partners and be willing to take the criticism. But they

all rose to the challenge and couldn't ask for a better

supplier community, honestly.

That's awesome, awesome. All right. Let me go

ahead and take a pause real quick. I don't have any more

questions in the chats that are relevant. I got a couple of

questions, but that are more focused against I think, Dr.

Hardgrave and Justin, let me give the opportunity to unmute

for anybody who's on the actual podcast, Matt, are we able to

allow them to be able to unmute and ask the question of either

Andy about the consumer shopper or Deanah, from a merchandise

retailer perspective? Do we have any questions out there?

Matt are they able to ask questions or not?

They are able to raise their hand or submit a question

via q&a.

So if you have a question for either one. Well,

I've got one here. Let me just say this. If you have a

question, I should have been more clear on this. Go ahead and

raise your hand on the chat. And Matt will unmute you and you can

ask your question live. I got a question from George's. Can you

talk a bit about why large organizations take a long time

to adopt new technology, knowing that many of the merchandise

were already RFID tagged for a long time? And that's for

anybody on the panel. That could be a Dr. Hardgrave and Justin

question as well. But you know, why does it Why does it take so

long to get the adoption? Justin or Dr. Hardgrave do you guys

want to answer that one because that's a you guys deal with a

lot more retailers any any perspective you got on why it

takes so long?

I can say you know, this question is about new

tech in general. So I can speak from the perspective of RFID.

But a lot of it's because it's changes at the source. So you're

having to go back to the factory level when it comes to RFID. And

then the other thing, I think that really has been a hurdle to

overcome is, it's not the technology, it's not the

hardware, it's not the tags and the readers and all that stuff

to the problem is that we're moving to a serialized unit

level inventory management system. So we're not doing

quantity level accounting anymore, we're moving to

individual records of each item. And most people in supply chain,

whether they're shippers or 3PLs, or DCs, and definitely

most stores are not set up to handle serialized inventory

management systems. So what that means is that we're collecting a

lot of data. And people are either compressing it down to

quantity on hands by field, or they're spending a whole lot of

time trying to update their existing systems to handle all

that data. I mean, we're talking about exponential change, you

can make an ASN with 300 items in there in two fields, a SKU

number and a quantity. But if you go to RFID, those are 300

individual fields from serialized inventory

perspective. So I think the biggest problem has been on the

back end and figuring out how to leverage and use all the data

and all that that entails. More so than just putting the

hardware on but it's no small task to ask people to put all

these tags on it's source and all these different locations as

well. It just, it's not a one, two quarter project. And that's

another thing too is a lot of people need some type of results

faster. The culture of retail now, as I think most people

acknowledged, is it's much, much faster than it was 10, 15, 20

years ago. People need to be able to deliver numbers in in a

year. They don't have two and three and four year initiatives

sometimes to work against. So I think there's a lot of pressures

on that.

Yeah, I think the other thing of being around this

for 20 years as well, is this is not a technology problem

project. It's not. It is a What's the business problem?

What's the technology solution? There's Deanah you just said it

from the time you said, we need you guys to do this from a

supplier to we've we got all the tags coming into the store

tagged and tagged correctly, was a year. And that was with a

group of suppliers that for the most part had an understanding

of how RFID tags work, etc. Then we've got stolen we got

technology to put in place. We have databases to build. We've

got store process to include. We got training to do, we've got

execution to do, we got monitoring to do and make sure

all the KPIs. These are major major efforts to fundamentally

change the business process. It's not just well, I saw the

RFID demo looks simple. Yeah, the demo looks simple. But

actually put it into practice is very difficult.

And Michael, the coordination of the different

groups that need to come together, so I had suppliers

saying, okay, Deanah, I'm going to be putting tags on this, it's

going to cost money for the next year. And it can't even be

leveraged. When will the technology be ready in stores

for us to get a bang for the buck, right? And then I'll see

my orders increase because the inventory you think you have

will come out, and the system is going then reorder to get you

back in stock. When will I see that? So there was a whole lot

of orchestration that had to go on. So when you just think about

a retailer of any size, I just think it's I mean, it's

complicated, no matter if it's a small, small, specialized

retailer, but it's just exponentially you know, large.

100% Yep. Pete Davis, you've got your hand up,

you've been patient. Go ahead and unmute and ask your

question.

Hey, Mike, just confirming you guys can hear me

okay.

We can fine, yes, sir.

Great. We are a D10 battery supplier. We just went

live last.

Congratulations

We just went live last week with RFID. Recently

just left store 100 to see how the tags are looking. But what

we're experiencing right now is a shortage of RFID tags. Justin,

I know we worked with you at the Auburn store over there in

Alabama. And I know lead acid presents a whole unique

challenge. But as Walmart expands the RFID program, I see

more and more demand coming for RFID tags. What's the panel's

thoughts on overall global availability of RFID tags?

I can, I can probably cover this because I do

this about half of every day. So like, this is the number one

question we get asked a lot. So right now, in 20, this year,

we're looking at about 30 billion RFID tags going on

products globally in 2022. 2023, we're looking at about 50 plus

billion I think, so that's a pretty significant growth curve.

There was some supply chain constraints not just in RFID but

just in chipset availability in general. You saw this with

pickup trucks backed up on loading docks waiting for ECU

chips and things like that too. That has eased considerably.

There's two things. There's a lot more foundries that have

come online, and then also consumer demand is backed off.

So there was a short term pinch in terms of tagging chipset

availability, but it's looking like that should be cleared up

by Q1 next year. There may be some lingering into Q2 for some

specialty tags and chipsets, but it's not really a passive UHF

thing. It's just everything got backed up for a while. I mean,

furniture was three months out in some places. So I think, you

know, chipset availability was short, but it's it's pretty well

And Pete, if I can add you know when I was working

cleared up.

at Walmart, both for the apparel implementation working with

Deanah's team, as well as the the home and entertainment and

hard lines and automotive, one of the things that we did before

we talked to any supplier about doing this is went and talked to

the various inlay manufacturers, the impinges the NXPs, the Avery

Dennison's, the smart tracks, the Seminoles etc. And basically

said, we're about to go do a big ask this is about the amount of

volume that we're going to ask you that for our suppliers or

for in store tagging, are we good? We did that both times.

Now what ends up happening is the big number together, we may

be good, but unfortunately, they've only got 30%. And

they've got 30%. And they've got 40%. So they're buckets of it

between the inland manufacturers. But we definitely

do not do anything like, well, let's just go out and ask them

and they'll figure it out. It's very, very to Deanah's point, we

collaborate with not only our suppliers of product, but we

collaborate very closely with our technology surprised to make

sure the hardware and the software and the tag

availability is there to be able to do that. Unfortunately,

Justin gets to deal with all of the issues because somebody

wants some from this company that doesn't have enough, and

they've got to get it from somebody else, etc. And that

does happen. I'm going to answer one more question from Scott.

Scott, when are there different types of RFID tags that will

work with only specific type of systems? IE, I love this

analogy, beta versus VHS? Justin will have to explain what beta

and VHS is to you probably. Well, let's look we're gonna

hold that particular question till Justin talks a little bit

about the RFID technology. I'm gonna go ahead and switch to Dr.

Hardgrave. And I'm going to kind of set it up as a little bit.

Okay, so we've heard from the shopper perspective, that they

want to know where products are buying online, pick up in store

and have enough trust, etc. We've heard from Deanah going, I

want to be an omni channel retailer, and I'm going to

figure out how to how to drive this particular work. And it was

obviously very successful at Walmart. I guess the big

question for you is, from an industry expert, we want to

know, it's been around for a long time, tell us how RFID is

enabling this omni channel, buy online and pick up in store kind

of activity from your perspective?

Yeah, so let me let me add a little bit of

flavor and some some information, some data around

omni channel, and that'll lead me into the use of RFID. I want

to go back a few years and and Deanah was looking at this in

2018. And it was actually at a I was at a conference. I don't

remember where it was now. But it was and omni channel been

talked to talked about for three or four years, right, it was

starting to become really the buzzword. And there was some

data presented, I don't remember who it was, but they suggested

that 80% of retailers believe they were omni channel enabled.

That they were they were omni channel, 80%. And I thought you

know, that's that's really an interesting number. Because, you

know, we had been working with RFID and many retailers who were

struggling just to have good inventory accuracy. And so we

did some work then at the lab at the time of what does it really

take to be omni channel we built some these this model around the

elements. And one of the characteristics, or one of the,

I'm sorry one of the capabilities that you need to be

omni channel ready is buy online pick up in store. In fact, we

would argue that's the simplest capability that you can add as

an omni channel retailer, right? What's more simple than saying,

hey, I want to buy and I will come by the store and pick it

up. So so, you know, we started looking at that actually in

2018, during the holiday season of 2018 to just do a test of how

well are retailers executing on this omni channel promise and in

particular buy online pick up in store. Now I want to put this in

perspective on how important that capability is to our

consumers following what Andy and Deanah were talking about.

So these are 2021 numbers because obviously we're still in

2022 but in 2021 64% of US shoppers regularly did some type

of bopis. 75% did bopis at least some point during 2021. I think

about those numbers are actually pretty staggering, right?

That's, that is a deep penetration into a capability.

Yet, only seven or only 53% of retailers actually offer that as

an option. Now, I also want to make sure that we you know, we

talked about buy online pickup in store, but there's a kind of

a hidden bopis called robis research online and buy in

store. And that's where, for example, Mike, the the slide,

you're showing on the screen now, what a lot of people will

do, and I would challenge you, you know, those on the panel,

probably those on the call, or on the webinar today, how many

times have you went and said, Hey, let me go check the website

and see if they show that they have it in store, I'm not going

to do a buy online pickup in store, but if I see that they

have it, hey, I'm 10 minutes from the store I'll run by,

right? And so you know, that's, that's a hidden part of bopis is

that research online, buy in stores. 74% of consumers have

done that at least once during the year. Lots of you know, we

have all kinds of data about what that really means. And

we're seeing that, you know, for example, in 2021 $81 billion of

merchandise sold via bopis. 40% of the holiday season 2021

bopis. And, you know, from an operations perspective, bopis is

fantastic. It costs 90% less when doing bopis and picking it

up in the store for the retailer versus shipping it. And there's

an added benefit of that right now, the best estimate that we

have based upon tracking credit card information is there's,

there's 25% of the consumers who go in to pick up a bopis order

by something else. So that's, that's bonus, you're getting

them in the store, they're buying it. However, execution is

not good. And I've got some data I share on that from our own

studies. But there was some interesting data came out again

late or early this year based upon 2021 data, that about 50%

of bopis transactions had some type of issues. 45 million units

that were trying to try to be buy online, pickup in store 45

million units not found, which which results in about 670

million in lost revenue, and 226 million in wasted labor cost

from people going and looking for the items and couldn't find

it. So with all of that, you know, what, what are we doing as

far as retailers and, you know, I've suggested that we're not

executing properly. We've got all kinds of papers out there,

if you go to auburn.edu/rfid, there's papers out there that

show the results of our studies on bopis, but here's the thing,

just a couple of stats from those from those studies. You

see on the screen there, this this slide and Mike, go to the

previous slide. And you see there, there's a different slide

from a different retailer and you see, you know, here's two

day delivery. And then and then go back to the next slide. And

here it tells you okay, you can pick it up tomorrow. So ones buy

online pickup in store, the other one is kind of a faux buy

online pick up in store, right that, that it'll be ready in two

days, or you can get it delivered in two days.

Yeah, the first one was this one. The first one was

pre RFID at Walmart, it was just fulfillment from a fulfillment

center, it wasn't pick up in store.

Gotcha. Gotcha. All right. And so so with this

one, you see, okay, they're they're giving you how many

items that they have. That's one of the most important things

that consumers look for when they buy online, pick up in

store. They want to know, you know, it, do you have it. And

again, it could be that because I want to come by the store and

get it. Yet only 35% of retailers from our studies are

providing that inventory count. And here's the here's the bigger

one, Mike, the accuracy of the online inventory count from our

research is about 13%. So the root cause of all of that is

poor inventory accuracy at the store.

So I think it's important to walk through that.

Where did you get that number? You actually sent students to

the store and literally had them do the research. It says they

have four but they don't have four, is that is that how you

collected that data?

We did a cluster, a lot of retailers

across a lot of categories, across a lot of items. Where

literally we would be in the store and we would we would we

would pick out, you know, products at random we would see

you know if they showed it online, what they showed in the

store versus what we saw in the store. Or if they didn't show it

on, if they didn't give you a count, did they actually say

they had it in stock? And in many cases, Mike, what we would

see is, we'd be standing in the store and say, Alright, we want

to buy online, pickup in store and the retailer would say,

sorry, that's out of stock. Yet we're looking at it in the

store, right? And so so you're actually keeping somebody from

buying that. Or they would say, yes, you'll be ready in an hour

buy online pickup in store, and so and we're looking at it,

there is nothing in the store. So so you know that 13%, that's

a ridiculously low number. We know that inventory accuracy is

a problem. But it really highlights the issues that we

have, when you're going to put it out there for everybody to

see, which by the way, is probably why only 35% actually

put that number out there, because they're really not sure

what they have.

Just just to build on that, I know, we've used

these numbers before a lot Justin and Dr. Hardgrave and

actually my conversation with Deanah is I got four items here,

and basically three of them are wrong from an accuracy

perspective. Some of them Justin are literally ghost inventory

where it says we have three but we don't have any, if we don't

have any, we don't sell any, if we think we have three, we're

not going to reorder because our reorder point is two. So we've

been quoting 50 to 65%, Dr. Hardgrave of just inventory

accuracy. But what you're saying is for buy online, pick up in

store research, it's actually lower than that is what you're

telling us?

Well, it's lower than that, because of the way

that they're trying to present it online and trying to share

that information. And and what happens is retailers we're

finding hide in hide inventory, right from the consumers, which

you think as a retailer kind of blows your mind, why in the

world would you want to hide inventory from somebody who's

trying to buy it? Well, it's because they're not sure that

they have something right? And so so instead of, instead of

taking that risk of saying, Yes, we have it, you know, come in

and buy it, or we'll you know, we'll hold it for you. They'd

rather tell you, they don't have it, than to have you come to the

store and be disappointed. And so they're hiding it. So Mike,

that's why that inventory accuracy is lower in bopis

because they're intentionally hiding product from from the

consumer, which again, is ridiculous. And and you know,

we're seeing more and more retailers who are using RFID.

Because you get from that, that 50 to 65%, you get that up to

the upper 90s. Now, you have confidence that when you say we

have three, we have three, right? And when you get down and

you say we have one, we have one right? Down to the individual

level. And that's the difference that RFID makes that you just

can't get there otherwise.

Gotcha. Justin, I'm going to I'm going to transition

to you. We got a bunch of questions here that are kind of

more how to get started, I'm going to put the slide up that

kind of describes how RFID works. Maybe you can walk

through that. And I do have a specific question from Scott

which is, is this kind of like VHS versus Betamax. And how does

this work so you can share this information across multiple

retailers, brand owners, etc. But bottom line is how does RFID

work? And how is it industry standard so there's their

guidelines of what tags to select, and exactly how to how

to make sure that people can read them across the platform.

Sure, so so RFID is a blanket term that covers

hundreds of technologies. So basically, anything that works

over radio waves to identify something is technically RFID.

That includes you know, passive UHF, HF, which is a lot of what

you use for hotel room key cards and, and payment systems and

things like that. Bluetooth is technically RFID, Wi Fi is

technically RFID when it's used for identification markers.

There's there's hundreds of different flavors or types of

RFID. The one that we talk about the most here is a passive UHF.

Passive UHF means that there's no battery on board. So when you

see those tags on the left hand side of the screen, there's a

small silicon chip, and then there's the antenna that goes

around it, which is usually printed aluminum ink. It's like

the same ink that they would use on a toothpaste box or something

like that. The way it works is you have a reader, you have a

couple of different types on the right there. That antenna is

directional, so it sends out a signal towards the tag, it

charges up the tag, the tag responds back with its

identification number to the reader unit. So the advantage

over a traditional barcode is you can read hundreds per

second, you can read them very very quickly. So you can read

400 plus tags per second. And then also because it's radio

waves, you can read through things so you can read through

boxes you can read through stacks of clothing and things

like that. So with that speed to count and then that ability to

not require line of sight to count what passive UHF RFID is

is is it is an amazing technology for counting a lot of

inventory very, very quickly. Going from a section of a store,

that may have 10,000 items that may take a few hours to count

with a manual barcode, we can count that whole section down in

in two, three minutes. So at its at its core, there are different

kinds of RFID readers, there's handhelds, which is what most

people use, you just walk around cycle count it. Handhelds are

not just used for cycle counting, they can also be used

as a finder function to find things. There's overhead systems

that will monitor whether things are going in and out of an area

or even location within a space. If you have some overhead

systems that are covering a space to try to find items in a

specific area. Robotic systems are pretty great. I mean,

robotic systems are kind of like a handheld that moves by itself.

So they can go through a space and count things that way. But

it collects all that data, it pushes to some type of system

that's going to manage that whether it's local software

infrastructure, cloud solution, whatever it may be. And then

we'd normally do a little bit of investigation to validate that

we trust the data. And then if we do, then we update the on

hands against what RFID tells us. At its base level, that's

how most RFID works in in retail operations.

Perfect. I'm going to throw out about three or four

questions kind of rapid style, because I want to make sure we

get to everybody's questions. Denise is saying, this is

probably for Dr. Hardgrave and Justin, is a broad statement to

say most everything in a store could be enabled in RFID other

than grocery and I would argue there's parts of grocery that

are currently being especially the food area that are

definitely taking advantage of RFID from outdated product, etc.

But is it safe to say that everything other than grocery,

which is the question, can be RFID enabled?

I think that's a safe statement to make at this

point. I mean most every category, I mean, we have its

challenges, but we find ways to work around it. And we're

starting to see it now on on various elements of grocery

depending upon what it is. But yes, I think that's fair

statement. Yes, I agree with that.

Right now, one of the biggest new initiatives is

restaurants. So you're seeing a lot of restaurants, they're

getting into it now with tracking food, everything from

hamburgers to, you know, french fries through their supply

chain, for FISMA compliance, and traceability and other things.

And then also at the case level, and even at the item level, you

know, we're seeing BLE, Bluetooth, all kinds of other

stuff, which are technically RF technologies on it. So there's,

there's a lot of ways to skin the cat there. But I would,

there's not many things that are just totally out of play in

terms of automated identification in a store in the

next five years.

And I had, I had a really good conversation with an

old boss of mine, Adam Anderson, who was at Avery Dennison. And

he's talking about some of the great things they're doing in

terms of putting RFID tags on packaged meat and bakery, etc,

for product rotation and markdowns, etc. So you can

donate the product before you throw it away. And the consumer

always has the freshest product, I think it's I think the sky's

the limit, we are also seeing some some indications from a

pharmacy perspective of tracking, you know, pharmacy

medications and things like that. So I think it's definitely

going to be taking off. Steve has asked, based on the US are

there campuses, in APAC or ANZ, that replicate the RFID testing

that you do, and I think that's for you, Justin.

Forthe lab. Um, we do benchmark testing for

inlay performance through the art program. There's about I

think, last count, there's about 150 different chambers globally

that are kind of calibrated back to this main unit where people

do development and testing for tags and inlays. So there's a

lot. And you know, when it comes to some of the testing we do now

it's just whether the suppliers did proper formatting and stuff

like that, too. I think lots of people have their own homegrown

programs and things as well. So I think that there's a lot of

different areas that do pieces of what we do I mean, but

everybody likes to think that they're the best in in their, in

their space. So I think so far, we're the only one kind of

brings all this together in one academic institution anywhere.

So, Dr. Hardgrave, I'm gonna, I'm gonna point to

you on this one, and I'm gonna build on it a little bit. So

it's based on your experience can you contrast Amazon's

ability to change and execute compared to a traditional brick

and mortar retailer was what was the impact of Amazon's impact of

retailers to move faster? And then I'm going to add on to that

for the bopis work. What did the 2020 global pandemic do to

retailers having to react quicker because people didn't

want to go in the store? I think that's why we're dealing with

some of that as people jumped into it because they had to but

they weren't really ready to so, Amazon's impact and then the

global pandemics impact.

Yeah, you know, so, so, very quickly and simply,

if you think about the difference between managing a

distribution center or warehouse versus a store, you can get to

six sigma, right processes are repeatable, they're consistent,

they're, they're predictable. You can you can get there in a

distribution center, and a store like to say that there's no

sigma, right? I mean, it's, it's you can't predict that processes

are not consistent because customers, customers mess

everything up in the store, right? Their behavior is not

predictable, the sales are not predictable with any type of

accuracy. So therefore, it's much harder in the store, to

control inventory, and to know what you have and where it is

versus in in the distribution center. Which is why by the way,

in Walmart start, in the distribution center case level,

not individual item, but that's why Amazon was able to move so

much, much quicker, and and what was Amazon's impact for

retailers move faster? Absolutely. It was, there was an

impact because Amazon was owning that space of providing to the,

to the consumer what they have, right. And you know, we I think

we use the example earlier, I think it was Andy that, look, if

you're in the store, and and you're wanting to buy something,

they don't have it, I'll go to Amazon, and I'll buy it from

right there. Because Amazon will tell you what, you know, hey,

I've got it. You'll get it tomorrow, or you get it in two

days. That's what caused the retailers to move faster. Now,

your second part of the question about what did the pandemic do

to bopis? Well, it shot a gigantic light on those

retailers who could not execute, right, because consumers

completely shifted their behavior of you know what, I

don't want to go in the store, but I still want to buy stuff

from you. And those retailers who didn't know what they had,

they failed to execute. And boy, that it ran the consumers away,

because they found they found the retailers who could execute.

And we saw these retailers like Lululemon and Nike, who were

tagging everything, who absolutely outperformed

everybody else when it came to execution during that time.

I saw a quote by the CEO of Nike, who said, if you're

in a Dick's Sporting Goods or an Academy, and you can't find our

stuff, you come to us, we'll get it to you. That's a little bit

brazen. But I mean, what he's saying is we know where our

stuff is, we know what we have, and we know where it's located,

we will get you the product you want, even if, unfortunately,

brick and mortar retailer can do that.

And he could say that, because they had the

confidence

Right

Of knowing what they had.

Right, right. Well, I am so happy that we've had a

chance to talk about this, and we're still getting questions in

but we're gonna have to, we're gonna have to cut it off at this

point in time. A couple of things that I want to just add

on because I've been doing this for literally 20 years. These

are my these are my takeaways. Number one, this is business

driven technology. This is not technology looking for a shiny

object, you got to have a business problem. And you have

to apply the right technology to it. And I think so many times

we've, we've looked for the shiny object, which is this cool

technology. Let's let's go check it out and see what we can do

with it. That's not the way this works. Number two, when I put

this slide together, and I shared this at RFID Journal

Deanah, you were the one I had right here in the middle of the

thing, retailer top leadership sponsorship, not Innovation Lab,

not a tech lab, none of that stuff. We need people who are

leading it from the top of the company from a merchandising and

operations saying, We can't continue to operate if we don't

know what we have, and we don't know where it's located. So I

again, thank you and give you a tremendous amount of credit for

really pushing that initiative, at least for Walmart, and

frankly, for the rest of the industry. I know we took a

number of chats at it, but I feel really, really good about

where we are. Thirdly, and this is Scott Wynn's question, this

is all driven on industry standard. So a tag that you can

read in a Walmart, will work in a Target, will work in a Macy's,

it'll work across the industry. We're not well, I'm not gonna

say that, some retailers are demanding using specific tags.

But for the most part, most of them follow the Auburn arc spec,

which is, these are the set of tags that will work for this

business use case for this category. The way you encode the

tag use GS one standards, which is, which is perfect. And then

the last two is measure everything, everything in

process, as well as the KPIs for results. I like what you said

Deanah, share the results with your retailer or with your CPG

partners, because at the end of the day, they're already making

an investment hoping this is going to drive better sales for

them. If you can share that with them, that's, that's awesome.

That's the way it should be. Because the retailer is also

investing hardware, software, people, labor, processes,

databases, etc. They're spending a lot of money to do this as

well. Everybody's going to win if we do this the right way. And

last but not least, the data capture that Justin talked

about, really think about what you want to do short term versus

what you wanted to do long term. Deanah, we made a decision to

use handhelds. That was the right decision because we wanted

to move quickly. That had some definite benefits of being able

to be fairly inexpensive and fairly quick to implement. It

has some long term implications of people get tired of wanding,

and there's some things like shrink and, and asset protection

kinds of things you can't do with a handheld with a wand, you

really need different data capture messages. So those are

my things. Deanah, Andy, Justin, Dr. Hardgrave, thank you so

much. I really do appreciate this. For those of you on the

call, we will be creating both a video and an audio podcast of

this and be making it available in probably a couple of weeks

will take us some time to get that all set up. But we'll do

that through both Conversations in Retail, as well as the

University of Arkansas. So I've got 301. So we're a whole one

minute over, but I think we started a minute late. So

Deanah, Andy, Justin, Dr. Hardgrave, thank you so much. I

appreciate your time, and we certainly appreciate you giving

back to the industry.

ThaBiank you.

Thank you, Mike.

Thank you, Mike.

I hope you enjoyed that podcast on the RFID apparel

story at Walmart and the industry experts regarding buy

online, pick up in store, research online pickup in store,

the customer engagement and interaction of that, and then

specifically how you get started and what some of the

fundamentals are. Join us next time we are going to go back

into the fixed camera space. We're going to be joined by a

couple of companies that do actual in store data collection

and analysis. One is the Trucks Corporation and one is Field

Agent Corporation. Please join us next time for that podcast.