Host Mike Graen has a discussion with Dean Frew from SML Technologies about the current and future opportunities of RFID at Retail and the business-use cases that are being considered.

Well, good afternoon. This is Mike Graen.

We are going to go ahead and get started with our Conversations

on Retail and the University of Arkansas Supply Chain

Organization podcast. Good afternoon, happy Friday,

wherever you might be, or good morning or good evening,

depending on what time zone you're in. So thank you for

spending a little bit of time with us. I am extremely excited

to be have a time to spend some with some time with Dean Frew.

Dean Frew is the Chief Technology Officer and Senior

Vice President of RFID solutions at the SML Technologies Group.

Known Dean for a long, long time, and I'm really excited to

get into his background, his history, his thoughts on the

industry, and all things related to both on shelf availability

and specifically, we'll be focusing today on the topic of

radio frequency identification at retail. Before we get too far

into this, I want to kick it over to Matt Pfeiffer. Matt is

the head of the Conversations on Retail. He's got a couple of

special things that he wants to share with us before we start on

today's podcast. Matt, go ahead.

All right, well, good afternoon, everyone. It's

great to see you. I know a lot of folks are getting caught up

after being in snow all week. Mike if you go ahead and kick it

to that next slide. We're so excited that you're here and we

just want to let everyone know that the on shelf availability

group and series is presented by the University of Arkansas. On

shelf availability, as I said in 2022 and 2020 undergraduate

supply chain program was ranked number one in North America by

Gartner which is leading global research firm. This ranking is

highly respected throughout industry, which makes University

of Arkansas graduates very sought after as they move on to

internships and careers. As stated by Gartner, this number

one ranking is reflective of inclusion of global content,

great popularity within the industry, robust program size,

strong internship, inter co op partnership, and starting

salary. So for more information about the supply chain program,

you can see the link there below.

It doesn't hurt that they're co located in Northwest

Arkansas with companies like Walmart and JB Hunt either, just

just wanted to throw that out there for what it's worth. All

right.

We're also excited to celebrate our

featured sponsor for this particular meetup, which is

Brain Corp. Brain Corp knows that retailers want to operate

smarter but with many solutions add complexities and not

efficiencies. With over 26,000 robots deployed across five

continents, Brain Corp is helping retailers with

frictionless deployment of robots at scale to automate

tasks like inventory management. Already powering the world's

largest fleet of robotic inventory scanners, Brain Corp

is now excited to offer retailers its analytic solution

called Brain OS inventory insights developed in

partnership with Google Cloud. Brain OS inventory insights

creates a true end to end solution for analyzing the

inventory data collected by Purina West, robots so retailers

can quickly respond to out of stock and low stock events, and

assess product details such as product location, planogram

compliance and price tag compliance. So for more

information, you can contact Gavin Donnelly there at Brain

Corp.

With that, I'm going to open it up and basically open

it up and introduce my friend, Dean, that I've already done a

little bit. I'm gonna stop sharing because at the end of

the day, we're not going to have a lot more screens and things to

share. But Dean, you have been, you've been in this area for 20

years or so. You've been leading a lot of very incredible retail

technology companies. You are now the CTO from the SML

Corporation. Got a lot of customers and I'm sure we'll get

into some examples here in a little bit. But just tell us

about yourself before we kind of open it up for some specific

questions around on shelf availability.

Yeah, you bet. And thanks again, Matt and Mike for

the opportunity to talk to you guys today and for the audience

taking time. Yeah, so Dean Frew, background in RFID going all the

way back to Texas Instruments. Started a company focused as I

was part of the tech development tech standards at MIT and part

of another company. Thought that there was something going on

with UHF and so started a company called Xterprise venture

funded, bought it back from the VCs in 2010, and then sold it to

SML in 2013 and was president of a software division and then

ultimately took on the CTO role. So again, SML, one of the top

providers of encoded RFID tags in the market and one of the top

if not the top provider of RFID solutions for stores for

inventory management and store operations. Headquartered here

in Frozen Dallas today, frozen Dallas, I should say. But we, my

team has offices in Singapore, Sweden, France, Dubai, UK, US,

Mexico, and Hong Kong and China. So we're seeing a dramatic

increase in interest around the world and excited to be on the

call today.

That's awesome. That's awesome. So, suffice it

to say, you've been in this technology area for a while.

You've been at SML obviously for a while. But in addition to

that, and one of the reasons that I wanted to make sure that

you came on is you're just as much as a business partner, as

you are a technologist. You think about things from a

business perspective you think about it, and a lot of the

questions we're going to be talking about today, are

business driven. So I think that's really going to be

important for us to do. So before we get into the actual

topic of RFID and some of the things that we do with SML. I'm

going to ask you to put your customer hat on because we've

all been customers before at the end of the day, I think it's a

great way to think about the business when you're engaging

with that. But I've asked this almost every time with folks who

have who've been on the podcast, which is have you had an

experience where you wanted something from for your own

personal use and you got frustrated because the store

said they had it, they couldn't find it, you had this website

say it was available then it became an on shelf availability

or out of stock issue. I'm sure you've got a story because

everybody does. Do you have one that you can share with us from

a customer perspective about this?

Yeah, definitely. The the one I won't talk about is

the fact that it took me 10 months to get my pickup truck.

So we won't talk about that one.

That's because you because you bought the wrong one

Dean.

But, you know, it happens all the time and we have

a distributed family and so ordering things and having

things shipped, ordering things and having someone try to go

pick it up is something that happens all the time for us.

And, you know, example this Christmas, someone saying that

they had the product, then they told us they didn't. So we

reordered it, and then it showed up anyway, okay, I won't mention

the retailer. But but you know, basically, we're seeing this all

the time. And it's you know, as, as we look across the problem,

my you know, my wife goes, how come these guys aren't using

what you guys do? And I said that's a great question, put

that in your response back to them when you go comment. But

it's happening everywhere, everybody is scrambling to meet

the new model where you're using every one of your existing

inventory stores, whether it be a store, a DC, or direct from

factory to fulfill orders and and we're seeing it in clothing,

we see it personally clothing, furniture, shoes, some people

are doing better. Some people don't make promises that they

can't keep and they'll just tell you honestly, when it's going to

show up and it tends to have done it. I've seen that now with

two different footwear vendors where they just tell you, we

don't have it now, but we'll have it to you in a week and a

half. Okay, I can live with that. Not the I'm gonna get it

now. I think we continue to see we're huge Amazon Prime people,

and we continue to see them set the bar on, they tend to have

less problems is our observation than what some other people have

had.

Yep.

So we're all we're all in the same boat, I think,

struggling through trial and error. Returns has become a part

of my life. Okay, more so than it was even two years ago. So

Say more, say more about that. Do you mean

personally or from a business perspective?

Yeah, personally. Yeah could be both, but

personally, the whole concept of you know, I think the Frew

family has adopted the buy three, figure out which one fits

and then send two of them back. I've seen that be a behavioral

change inside our clan. And and so the whole concept of returns

is a normal weekly process for us now.

Yeah. Yep. For sure. And I think we, we need to

probably retouch on that when we get a little later into

solutions, because obviously RFID has some some potential to

help help track that better than what we've had in the past.

Yeah

So, so I guess, I guess one of the things that and

unfortunately, I was unable to attend NRF this year. Dean, I

believe you were as well because you had some other stuff going

on. But a lot of excitement. If I heard one word I heard it a

thousand times from the folks that I talked to who attended

NRF which is RFID is here to stay. RFID is now sort of like

the old UPC barcode. I mean, if you're not in that certain

business, you better be or you won't become relevant. So what

are some of the things that you heard coming out of NRF

specifically as it relates to RFID?

Yeah, I mean, clearly the there wasn't, there wasn't

much discussion around how does this work. I think that was one

of the big takeaways that our team had is the discussions were

around those retailers that, you know, as we say, have come to

acknowledge they have a problem. And that problem is they can't

continue to use an annual PI count as the basis for their ERP

systems inventory ledger and throughout the rest of the year.

And not everybody has come to that, but we're seeing a growing

number every year, whether it be a retail expo in London, or

whether it be in Dubai, or whether it be here in the US and

in our app. We're continuing to see retailers who are focused on

the right thing, which is the fact that they have a

fundamental problem of running their business. There's always

going to be excitement about some of the things that you

know, that we're working on. But when it comes down to it, the

fundamental element is if you know what you have, and you know

what to replenish and you know what to commit to customers. And

coming up with simple solutions for that is what we found

customers interested in. And again, for us, trying to focus

them on to that fundamental issue, because everything else

doesn't doesn't matter, doing customer experience, doing self

checkout, all those things doing loss prevention, doesn't matter

if you're not doing that fundamental element.

Yeah, so let's talk about that a little bit. So what

I hear quite a bit is there's a whole hierarchy of capability

that this particular technology, it allows you to know, at a very

high level of accuracy, what do you have and where is it

located. By the way, that that particular information can also

be provided to your customers in a way that allows them to be

able to purchase product. Bill Hardgrave, Dr. Hardgrave from

the University of Memphis calls that researching online, buying

in store. I've also heard it called reserve online, pickup in

store but exposing those on hands, for customers. But let's

just talk through this, the inventory accuracy has always

been the base of the triangle. We've got to know what we have

and what we know we have, where it's located. It seems to be a

little bit of a shift now where I've seen some retailers that

say, no, I need to know that but not necessarily for customer. I

need to know that for asset protections or inventory

accuracy purposes of where's, where's my inventory becoming

inaccurate. Your response to that, because I'm seeing a lot

more of that from from a retail perspective.

Yeah, I mean, I think any of the asset, any of the

asset protection, the where, what stuff do I have where is a

component of what we see from customers, but the biggest one

is them looking to the consumer relationship and seeing how do

they improve that, which ultimately, they've, they've

associated with increase in sales. Okay, and better customer

satisfaction. So, you know, while there's somebody on the

committee that's interested in that, the one who has the

loudest voice based on our experience, are those that are

saying, I need to reduce my cancel rates on bopis, I need to

make sure my out of stocks have gone are almost zero in the

store, I need to make it so that I really understand what I'm

doing as far as receiving in my store. And because if I can do

those three things, then I am going to sell more product, I'm

going to satisfy more customers, rather than operational things

inside the business about how many items do I have more asset

protection side side of things.

Yep. And I think you guys have done an incredible job

of understanding that entire flow, which is, so walk us

through the SML solution, if you will, if I'm a brand new

retailer, because it's not just I want stuff, and I get the on

hands right. That's certainly the foundational element, but

everything from I'm able to receive product in and account

for it, I'm able to move it from the back of the store to the

sales floor, and I can account for it, I can, I can see it's

left the store. The thing we were just talking about returns,

this is gonna be a big broad question. But how does SML

deliver those kind of capabilities, because that's

what retailers really want.

Yeah, and our philosophy is pretty simple and

that is that once you've made the investment to put the RFID

data carrier on your product there are it's our it's, it's

ourselves in a stewardship responsibility are to provide

you as much value for that investment as we can, okay. You

know, it's just like, you know, my new truck, if I just use my

new truck to commute to the office, then it's not that

valuable, but my new truck carrying all my stuff into the

mountains and whatever. I want to try to do as much as I can

with that asset. And so our philosophy has been to continue

to expand and to grow the use of item level RFID in the store. So

it starts out with stocking, it starts out with receiving,

starts out with moving from front to back, it starts out

with stock lookup and Geiger counter finding, then it's

moving into replenishment, it's moving into markdowns, it's

moving into bopis. Last year, this time of year, we bought a

company out of Sweden, Sumzed, and we've added a complete

customer experience line. So smart dressing room, kiosks,

point of information terminals, bopis pick up kiosks, and also

self checkout and associate level check, you know, assisted

checkout using RFID. You know, then the as we started seeing

that one of the things we've been involved in a long time is

the supply chain. And so what we started seeing is all of our

retailers, the thousands and thousands of stores that are out

there using clarity in the store, they started recognize

that there was value and as we had as well up in the supply

chain. And so, you know, we've made strategic investments in

that space, because we believe it's a natural to help the

client extend their return on investment at a marginal cost

because the most important part is already there. So we've done

supply chain work with multiple brands and retailers now and

things like being able to read hundreds of items in a box in

one second, at 100% accuracy and do that at speed so that you're

at a thousand cases an hour. Okay. And so, you know, for us,

it's basically tying all that together into a complete suite

of functionality that leverages item level. And I would tell you

that the way we talked about this, and what we're seeing is

is this is not about RFID, it's about the move from SKU to item

level. Okay, and RFID happens to be one of the technologies we

can use, but the fundamental change and the reason there's an

opportunity for companies like ourselves is that their existing

ERP systems have no idea what to do with item level data

Right

They don't even you know, they don't even think with

serial numbers on every blue medium t shirt. And so for us,

it's that transformation from SKU level to item level. And

having that dialogue with the client, retailer or brand to say

this is the transformational thing you guys should be looking

at. It's not just about do I use RFID on things it's about, am I

going to start manage my inventory at the at the item

level?

So let's let's double click into that, because

that that I think is a really important distinguishing factor.

There's a lot of people who are out there, leveraging RFID

systems to just better have a better job of knowing what they

have and where it's located. We've already talked about that.

But that means taking all those serialized G10s, rolling them up

to a G10 and go, oh, I've got four of those not ten. Okay,

great, we make the onhand change. What you just said, I

think is transformational, which is I can now do things like

assign attributes to an individual SKU, not a SKU, but

the item of that SKU. How many, how many retailers do you think

are really taking advantage of that? And number two, why are

why are not more retailers being able to do that? Is it legacy

systems? How do you think through that, because that, to

me, seems like the next big opportunity to leverage that

serialized data.

It is and it's again, it's one of those things that I

mean, I'm, I'm not going to give away since my competitors are

probably on this. But basically, there are opportunities that to

know if if if an event is taking place with a blue medium, a

specific blue medium t shirt, that would allow me to address a

lot of business benefit. Okay, and but you've got to have all

that information first, you've got to be able to have received

it, you've got to be able to do have done a stock count here,

you know, frequently. And and what we're seeing is, again,

back to that pyramid that we use, once you've got that

fundamental in place, you're opening up a whole nother set

of, of business opportunities, of leveraging that information,

whether it be loss prevention, whether it be customer

engagement, whether it be fraud, whether it be there's a number

of things out there that we are currently. You know, take for

example, it's not a secret, but we have a markdown application

that's deployed in multiple retailers. Simply being able to

know that I've got three medium blue T shirts that need to be

marked down and I'm going to use Geiger counter to make sure I

find them.

Yep.

Okay. Not a very sexy app, but a huge value for many

retailers out there and you couldn't really do it if you

were operating only at the SKU level not effectively at least.

Right. Yep, absolutely. So you can see in to

we have a couple of questions. One from Robert Taylor, I think

it's more of a comment than a question but could be

transformation with products that have expiration dates of

various sizes. Obviously, in the food industry, people are

definitely looking at that because that particular

serialized G10, we know what date and time that tag got

provided and potentially could have a when does it expire, when

does it need to be marked down, etc. Great perspective. Julie's

asking, how is, how's location a product track by RFID? I think

that that allows a little bit with the Geiger counter

function, maybe explain that one a little bit more Dean.

Yeah, I mean, there are technology. Let me talk to

the main just comment on Roberts comment. I think that there are

a lot of things, believe it or not, in the retail sector

outside of food, that have expiration dates. For example,

cosmetics, a bunch of cosmetics have expiration dates, just like

packs of cheese. And so that whole concept of being able to

address lot code and expiration day, are is our data attributes

that are having to become part of the product that we're

involved in. Okay. I think it was Julie asked the question?

Yeah, Julie asked the question.

Yeah, and, you know, RFID is really, really good at

counting a lot of things fast. What it's not good at,

especially now that the technology has evolved is

without a lot of money and a lot of infrastructure to be able to

pinpoint something down to a very small number of the small

area, a CEP, if you will, taking the military term. And so you

So So I want to I want to jump to a question that wasn't asked,

know, so it can be done, but what we're finding is most

retailers out there kind of know where everything is, and they

don't, they're having labor issues now. The last thing, you

but it was kind of inferred by these questions. In the past,

know, we have customers that are replenishing 1000 to 2000 items

a day on the floor. They don't have time to go look on a

the GS1 and coding standards has basically been I have the

handheld to go look at a dot someplace on a screen, you know.

They know where they put away the children's wear and now they

basically the G 10 of the item, I have a serialized number of

use Geiger counter to zero in on the size 12 onesies and pull

those to the floor through our replenishment app. So location

is something that I think is going to continue to evolve. But

that item and everything else was a data. So it provided me

again, we're very driven by customers and, and customers, we

want to be very sensitive to all their problems, not just their

not only the UPC of the item, but a unique number that

inventory problems. And one of their problems is they're just

trying to staff their stores and minimize the impact on their on

connected those things together, right. In the future, we're

their store staff. And so a lot of what we do with our

applications is trying to make their their jobs more efficient.

going to see an expansion by GS 1 and this is not a GS 1

And to do it in a way where the user is not just inundated with

information, but we try to boil it down and allow them to sort

commercial, so I'm not trying to do that, but there's going to be

it and so on and I think location is part of that so. I

think we're a ways away from, there could be breakthroughs,

but we're a ways away from coming up with something that a

a standard that says, if we open up the amount of size that we

user will actually, other than a cool demo, if you think about

doing this every day in a store that has 200,000 items in it. It

could actually contain more things like food safety things

doesn't seem practical to me right now.

Yeah, I mean, it's something we're wrestling through right

now. I think that there's there's pros and cons of putting

like expiration date, etc. Where do you think the industry is on

stuff in the cloud versus putting it in the tag. I'm, you

that because I think it's going to be a very interesting, the

good news is what's available today doesn't change. So we

don't have to migrate to that. But where do you where do you

see the vision of where will your SML company is going to be

in terms of leveraging that?

know, I tend to lean toward, alright, what has to change and

what would adapt to change more effectively? Since we don't

really know and to me anytime you have to change something in

the hardware, you have to change something in the software itself

to read the items. That just seems like friction to me, okay.

It might be the best solution but again, coming from where I

have at Texas Instruments I watched a lot of technologies

that were better not get adopted because of the amount of inertia

that it would take to break through that. And I think we're

gonna, we're gonna have to work, I think there's gonna be markets

where it makes a lot of sense and there's gonna be markets

where it just takes too much inertia to move it off of the 96

bit, but we'll see.

Yeah

We're looking at both of them.

Yeah, well, clearly, as you think about new use cases

i.e. food, fast, ready to serve restaurants, you know,

expiration dates, etc. That's tougher to do with the way the

standards are today. So those may be first movers. But for the

core of what we're talking about here, which is apparel, general

merchandise, electronics, those kinds of things, yeah, right.

There's, there's some, there's some, there's some reason why

Yeah one thing to think about is that let's say we

went to 128 or 256 bit tag

Yeah.

Everybody who encodes tags would have to change their

software to encode it. Okay. They would have to change the

system behind it to be able to handle now every single EPC

would have attribute data that would have to be encoded into

the tag.

Yep.

And so if you just start at the headwaters of this

process, you know, there's change, and I'm sure that some,

some technology providers were will move down that path, but

for mass marketing, there's a lot of change that has to take

place so.

Yep. So it actually took 25 minutes for JW to

actually ask a question. That's the latest he's ever been so JW,

I'm picking on you a little bit. But JW is a he participates a

lot of these and asks very, very good questions and I think his

question is a pretty good one, which is the GS 1 standards and

leveraging EPCIS, which is the kind of it's been around for a

lot of years, the way that serialized data gets

transferred. He specifically asking about potentially

leveraging that from a claims compliance. Is it too early to

tell whether that's going to be successful or would you plan on

that kind of be the right, broad approach?

Well, I think that I mean, back when we were

establishing the standards in 99 to 2001, EPCIS was becoming was

was part of that dialogue. And, and I think the challenge has

always been, what's the business value, in the context of every

customer has their own ERP systems? So is it going to be

food where EPCIS is going to be or pharmaceuticals or something

else other than the mass market that we're currently involved

in. And I think the jury's out on that. But you know the, when

you think about to truly leverage EPCIS, we have one

customer that we've got thousands of stores live, they

have hundreds of factories, hundreds of DCs for you to truly

use EPCIS and global location numbers and so on, you've got to

put in a ton of item level infrastructure to make that

happen. And if you don't, then you've got gaps basically in

some of those things. So I think it's, you know, it's, it's going

to be interesting to see how that plays out over time.

Well, hope you enjoyed that podcast with Dean

Frew, we didn't have enough time to get through all of it. So

we're going to pick it up right again next time. Just at this

same level. We're going to talk a little bit about some of the

future technology and capabilities we see with RFID.