Mike Graen sits down with Paul Baboian from Zebra Technologies to discuss the Zebra solutions for many opportunities in the Retail Supply Chain.

Part #1 of this series explains the driving forces for RFID in the retail supply chain and the Zebra Handheld solutions available today.

Greetings. My name is Mike Graen. Welcome to

another conversations on retail and the University of Arkansas

Supply Chain Management Department. Focus on on shelf

availability. I am super excited today to welcome my good friend

Paul Boyden from Zebra Technologies. Obviously, Zebra

is a industry leader in lots of different applications, lots of

different technologies. But today we're going to be focusing

primarily on the RFID technology to talk about how you

specifically leverage some of these solutions in retail. My

name is migraine, and I appreciate the opportunity to

spend some time with you. Before we get started too far into

this, I want to introduce my good fault friend Paul Boyan.

Paul is in the incredibly warm town of Chicago, Illinois. 10.

Paul, what's the temperature there right now? About 10? By

10. And he just got back from a little bit of family time in

Florida. What was the temperature down there, Paul?

Oh, about 75?

Mm hmm. You went the wrong way. It went the wrong

way. For sure. For sure. So, Paul, give us a little

background on yourself. I know you've been with Motorola, and

then zebra and in the space for a long time. So how about a

little introduction about yourself and kind of your role

at Zebra?

Yeah, sure. Thanks, Mike. Pleasure to be

here. I've been supporting RFID projects for virtually all of my

career in the 90s, I was more on the industrial factory

automation side and really focused on semiconductor and

electronics manufacturing, when the majority of electronics and

semiconductors were manufactured here in the States and

leveraging more of a proprietary RFID system. And then, in the

early 2000s, when the DOD and Walmart, you know, made a big

splash with EPC RFID, this, you know, new technology disrupter

in terms of a very low cost RFID solution, I joined on with

Zebra, and supported all of the Walmart, primarily the Walmart

suppliers. And that was my first entry into the, you know,

passive RFID and expensive interoperable systems. And since

then, have been supporting manufacturers and transportation

logistics companies. And within the last five years or so, I

have strictly been supporting retailers. So retail stores and

distribution centers. So a lot of experience in terms of

supporting implementations out there. So glad to be with you

today. Thank you.

Well, I'm glad to finally find somebody who's

actually been in the RFID space longer. And I have I got

involved in about 2005 When Walmart and P&G started talking

about leveraging RFID at the case of power level, I didn't

realize you actually had experienced before that that's,

that's tremendous. That's tremendous. Well, we're gonna go

ahead and get started with us. And the first just as a

introductory, we're going to have the the folks on the line

who who have are interested in questions, just raise your hand

or put something in the chat function. Matt and myself will

be kind of monitoring that chat function for any questions that

you guys may have. And we will certainly open up give you an

opportunity to answer the question via chat. If you'd

prefer to ask your question live, just raise your hand and

again matter or I will unmute you and allow you to ask your

questions directly from Paul. Just want to again thank for

conversations on retail, a great platform for for sharing

information about the retail platform. This one happens to be

on on shelf availability. But Matt has done a great job of

building out lots of different things and you can go see his

his website for that a conversations on retail. And

then of course the University of Arkansas the number one Gardner

rated undergraduate supply chain department, I always have to

plug that for the folks at the University of Arkansas but our

two LinkedIn profiles, myself and Paul's are right below and

without Without further ado, we're just going to kind of go

into what we want to talk about here. So before we before we

jump into the actual content of RFID. Paul, I have I have a

personal question that I love to ask my guests because in

addition to a retail supply chain and RFID expert, you're

also a customer and you order things from stores you order

stuff online. Tell me about a time over the last call three

three to six months where you are disappointed by a potential

purchase as a Customer, tell me a little bit about what

happened. You don't have to name the retailer if it was a bad

experience or if it was a good experience. But this whole idea

that we are actually customers as well, I think is really

important. And it's always interesting to hear what kind of

experiences my guests have had.

There's, there's one in particular I can think

of, which was before Thanksgiving, and it's a fairly

well known housewares retailer where we were having a family

get together, and we needed to replace some glasses. And we

ordered from the local retailer local store online, and they're

not right down the street. So it was a drive to head out that

way. And did a little bit of shopping and a few other stores

nearby and stopped by that retailer. And oh, by the way,

when we were when we were online shopping, you know that the

products were, you know, were available, they indicated that

they were available on the line items. And so, you know, when I

went in the store to pick them up, I started, you know, showed

the email and said, Hey, I've got this order, it should be in

the queue. But, you know, I ordered a few hours ago, I

assume they they'd be ready by now. So they went and looked and

came back and said, Oh, I'm sorry, we don't have those, you

know, in stock. And I was like, Well, when I was online, and I

ordered them, you know, they were available. And they just

apologized and said, Well, we we should we bring them in from

other store. So it doesn't mean that they're here in the store.

And that was really disappointing. Maybe because it

was a bit spoiled at some of the other retailers that do a better

job and you know, focus more on what's in their store inventory.

But yeah, that was disappointing. And of course, we

had our get together and we were missing some, you know, some

glasses, so we, you know, we we couldn't get them in time? Hmm.

Not a good experience.

Not a good experience. No, very, very

disappointed. Very disappointing.

You know, I've yet to ask that question yet, where

somebody has given me a tremendous experience, it's

usually always a negative experience. So I had

some were, you know, during COVID, while well

out of retailers, you know, weren't quite there yet. I had

some really good experiences, you know, and a number of

different retailers. You know, I don't do it now. So much. But

you know, during that time being in a parking slot, and waiting

for my, you know, delivery I it was it was impressive. So there

are a lot of retailers, you know, there that are getting it

right. But boy, when you get disappointed like that, it's you

remember?

Well, I don't think that could have be a better

segue to the slide that I'm about to show. Because the

world's biggest retailer feels your pain. We got a quote here

from Doug McMillon. Mr. Sam actually had one like this as

far but this one's a more recent one from Doug McMillon, the CEO

of Walmart, it's really simple. If you're not meeting the wants

and the needs of the customer, you're done. There's not a lot

of loyalty there. Because I would imagine Paul with whatever

retailer you were doing business with, if there was another

option for another retail or you wanted those glasses, and you

would have found a way to get those glasses. So I think people

don't have loyalty to a specific retailer anymore. They have they

have loyalty to the products that they want. So with that as

a backdrop, what I think is really important is to just to

speak a little bit about the business drivers behind this

technology. And I've showed these before, but I think

they're always worthwhile looking at IHL a few years ago,

I did one that says retailers are missing out on a trillion

dollars in sales. Because they don't have what they want on

hand what the customers want to buy. Amazon Prime facing empty

shelves are 52 Prime members are more likely 52% more likely to

take out their phones and buy what they need online. And

what's ironic is you're actually using the retailer Wi Fi to

order it from another competitor, which I think is as

a little bit ironic. In the last day 24% of Amazon's current

retail comes from customers who try and buy it. I've shared

these before but I always think they're they're worthwhile

going. I've also updated this one so this one's a pretty

interesting one. This is from insider intelligence. The box on

the left hand side is the percentage of retail sales

that's coming from E commerce and E commerce could be buy it

online. Have it delivered to your home, buy it online, pick

it up in store, otherwise known as bogus. There's a there's a

term Paul that the bell Hargrave from the University of Memphis

has coined called repurpose, which I think is interesting,

which is research Which online pickup in store, that's where

you look online to see if it's available and then drive to the

store, you may not place the order, but you actually do the

research ahead of time, before you go to the store. As you can

see on the right hand side, and this is the new one, this is

this is continuing to grow. These are the percentages of

growth in these various categories that are going to be

doing online. So that doesn't mean real retail stores are no

longer gonna exist, they absolutely are. But they're also

going to turn into more fulfillment center kind of

opportunities. And in order to be able to do that you you

definitely have to know what you have and where it's located. And

again, I'll share this last screen and then open it up for

Paul for a couple of comments here. But this kind of inventory

accuracy, where it says the store says I have on the top

one, four, and I actually have four, if those would have been

your glasses, Paul, we would have been fine. Right? It said

you have four, you ordered four, we're all good. The problem is

too many times we are thinking we have them like the bottom

one, three pairs of jeans, and we actually don't have any at

all. And therefore you buy them online. And then you go to pick

them up. I'm saying we sorry, we can't find them. Not only do you

not sell them, but because the reorder point is to over the

right hand side. When he kept his bad to to order more from

the supplier? Well, guess what? It's never gonna go down to two

because the on hand things I have three, I don't have any. So

I'm not going to sell any I'm not going to worry any. So

that's that is the that is the game that we are focusing on

from a retail perspective. And obviously apparel as part of

that, but we're seeing Paul, we're seeing we're seeing some

companies kind of expand outside of apparel, correct?

Absolutely. Yeah. Categories are expanding quite a

bit.

Well, I Paul, Paul was nice enough to send me this

slide. I think this is really a good slide. And he actually just

updated it with a couple of things. Paul, walk us through

this, what are some of the retail trends that you're seeing

in the industry?

Well, I won't go through each one, I think you

can, you know, take a read through these, but I'm gonna

pick out a few that I think, you know, there's a lot of insight.

You know, first off in terms of the customer experience, really,

in today's, you know, marketplace, the retailers, you

know, the ability to compete in today's world with the

customers, you have to expose accurate, you know, inventory

onto your web or within your application, because as you

mentioned earlier, you know, customers, a lot of

sophisticated customers are utilizing their phone while

they're in the store and they're looking for information. Or

prior to going to the store, they want to know which store

has that inventory as I you know, as when I my experience,

so that loyalty the loyal customers is definitely the

fusion of being in the store and leveraging that data and needing

accurate data, that's really a retailers right to play. And if

they're not doing that, then you know, they're not on an equal

footing with others out there, the more advanced that are doing

it, that's number one. And number two, we'll just talk

about the E commerce picks. I think, now that a lot of

retailers are picking from their own inventory, and in most

cases, they're picking from their shelves, they're on store,

you know, for sale shelves, they're actually feeling the

impact, they're getting no picks because of the out of stock. So

it's affecting, you know, their processes firsthand, which is

new, you know, which is really new with ecommerce and Omni

hitting within the last couple of years. The last piece is the

profitability pressures. I think, you know, it's now a lot

of reports, actually, in the most recent IHL report, they

indicated that, you know, on the fulfillment is between a five to

15% burden on margins. So in terms of operational

efficiencies and figuring out what makes sense in terms of on

the fulfillment from stores from a local micro fulfillment center

in the backroom, you know, how to handle that, that those

processes are still being refining because, you know, they

need to improve that bottom line. And I guess the last I'll

speak about is the theft. This is you know, recent, you know,

we've seen an increase in theft to x from 2021. And, you know,

the input the feedback from customers, they don't like the

security vaults, right? There's been a lot of vaults installed.

There's been a lot of now checking receipts not just at

the clubs, but at retailers. Many retailers were checking on

receipts going out and this is a big issue that we are all trying

to get, you know our arms around you can see there's you know,

there's There's the supply chain constraints. And of course,

labor not going away. But I'll leave it at that this will be in

the deck, take a look at that.

Awesome. Awesome. The other the other piece of

this, which is, I think, really fascinating, which is, and

we've, we've said this quote before, but if, as a retailer,

you're turning your brick and mortar stores into fulfillment

centers. Yeah, I don't know that they were necessarily ever

designed to be fulfillment centers. But that's the

migration is going on. And that means you've got to make the

product available for the brick and mortar shoppers as well as

fulfillment centers and building on that profitability pressure.

You're paying your associates or your team members not only to

stock the product, check out the customer, but also to pick

product for customers, so that costs from a profitability

becomes a bit of an issue from a retail perspective as well.

Well, from a from a solution perspective, sorry, I'm going

the wrong way. From a solution perspective, I guess the

question is, well, what's the what's the role? And what

exactly is RFID? Technology play? Paul, how does RFID play a

role in helping to become a disrupter?

Yeah, it is, you know, for sure, a disrupter.

Because as you can, you know, no, knowing what you have, and

where, yeah, where it is, with little or no labor involved, is

that's that's a disruption to what has typically been, you

know, in terms of inventory accuracy in the back room, or on

the shelves of 50, maybe generously 65%, inventory

accuracy to a 95% Plus, let's say high 90s percent inventory

accuracy, that that is a game changer, right. So first off,

it's, it's fixing that distortion in terms of what's

incoming, what's coming in from the distribution centers at the

store, and what is going out, you know, what is paid for, but

just as important in terms of inventory levels, what is unpaid

for those going out the doors as well. And that's, that's really

key. That's the critical, the fundamental of RFID in the value

provides is the inventory levels. And then of course, at

the same time, I'm just reducing those mundane tasks because of

the automatic data collection that RFID provides. It reduces

time on tasks, and in some cases, it eliminates those time

on tasks. And of course it at the same time supports on the

channel. So it's Yeah,

well, what I really like about this is the way

you've you've laid out these business challenges. I believe

that all of the folks whether it's a tag provider, whether

it's a solution provider, whether it's a software

solution, whether it's a hardware solution, they have to

work together, these are pieces of the puzzle. And I think that

to really lay out what some of the business drivers factors are

is really important for folks to do, the way I try and look at it

as a triangle. This is the way I call kind of the business value

triangle. And usually, it was interesting before this year,

everybody always said, Well, it all starts with on hand

accuracy, knowing what you have knowing where it's located at a

high degree of accuracy. I've started to see a little bit of

some of the retailers actually jumping involved in actually

bypassing the on hand accuracy benefits and going right into

asset protection, which we'll talk about in a minute. But But

Paul talks about honesty and accuracy, I think we got a

couple slides here, which kind of demonstrate some of the zebra

solutions for this on here and accuracy walk us walk us through

what some of these would look like.

So high level in terms of reading, you know,

tagged items, to gain that that unhand accuracy that we all

start with starts out with tagging that source. So in other

words RFID tagging merchandise at at Factory. And the RFID tags

are integrated into the price tags integrated into you know,

the informational tags into the tickets. And it's it's a

basically the RFID tag data has a UPC plus a serial number so

that that's key, so that we can differentiate the same item the

same UPC if there's five pairs because of that unique serial

number. On every item we can differentiate when we read these

tags and the infrastructure. The reader infrastructure can be a

handheld device that's leveraged with what the associates use

today a handheld computer or it can be fixed readers or fixed

mounted Leaders, they're installed at strategic

locations, at transitions, or over sales far in the back room,

or most recently, within the last couple of years, we've

seen, you know, we're now trending where we're leveraging

RFID readers or on robots for autonomous vehicles. So RFID,

instrumented AMRs. And all of those reads, basically are

pushed to a data repository. And from that data repository, the

inventory management system that consumes that data, so the so

the on hands are consumed, so that, you know, we can provide

dynamic replenishments or, you know, insight in terms of

upstream processes.

Absolutely. Perfect. And so when we think about the

zebra rollin this, yeah, do we think about Zebra is a kind of a

one stop shop for all of these pieces? Or do you guys

particularly specialize in a specific one of these portions

of this?

We, we provide we are, I would say, we're almost a

one stop shop. So we press a hardware layer very well. And

for those retailers who are more of app developers or do it

yourselfers, we, you know, we work closely with them, but at

the same time, we have partners that are very laser focused on

RFID inventory management, or RFID, for retail solutions that

provide commercially off the shelf, you know, RFID solutions,

so whether it's in terms of inventory scanning, or Omni

picking, or replenishments, that tie to their back end system. So

it we we are to some degree, one stop shoppers veer off what I've

called the do it yourselfers, but at the same time, for those

who are looking for, you know, commercially off the shelf

shrink wrap software, because they want to get started quick.

You know, we have a lot of partners out there that you

know, focus on this market as

well. Yep. So it may not be something you provide,

but you work very collaboratively with label

providers, software providers, etc. And I guess the other

question would be okay, well, but zebra probably doesn't talk

to all retailers just because of the number of retailers are out

there, the big ones, the small ones, etc. I believe you work

very closely with other companies like marketing, etc.

If they have a retailer that doesn't have the amount of

buying power, that they can collaboratively work with you

for that equipment as well, correct?

Yes, absolutely. Yeah. Very significant ecosystem

of even independent software providers, and also, you know,

value added resale partner. So

awesome. Awesome. Well, I think we've got a, we

think we've got a quick piece of this, which is actually shows

some of the results in these results. We don't have to read

these. But the bottom line, Paul, you put this together,

this is from Auburn zipper project study. But some of these

are amazing. I mean, the inventory accuracy was just what

we go back to what we said before 60 to 65%. And now we're

up to 9599. It was interesting, we had a interesting debate on

LinkedIn the other day, which is what is the expected on hand

accuracy. And somebody says, well, we shouldn't expect

anything less than 99 point something percent. And I was

like, wow, that's really hard to get 99% Probably, you could

probably do it, but there's a lot of pieces, but even getting

it from the point was even getting it from 65 to 95 is a

huge, huge benefit. So

I wouldn't say this, that the genesis of you

know, really RFID and retail, the genesis was apparel, and

apparel is relatively speaking as our transparent so it is very

high 90s You know, 9899 at the same time, now, a lot of

retailers, you know, the more advanced, it's within general

merchandise, or even tagging food. So there are some physics,

you know, challenges there. But I would say on average, what I'm

seeing out there, you know, is when it comes to general

merchandise and food included, is at a minimum mid 90s. So it's

it's even with adding, you know, a number of new categories that

are beyond, you know, the RF transparent apparel, the tags

have become much more sensitive, and the reader technology in

terms of being able to read these tags, there's a lot of new

knobs that we can turn over the last, you know, three or four

years that enables us to really get dialed in, in terms of

reading item, you know, level tags, so

yep. And we've actually got a video of while

some Folks at Auburn we're just using this is a RFD 8500 device

from Zebra with, I believe your RFID 123 application. What's

interesting here as it's counting the number of unique

tags, which is the big number in the middle, the 285 286. But you

look at the number of tags that read, duplicate many, many

times. So 40 629 tags that read over 250 tags per second, that's

just amazing compared to line of sight, kind of kind of things.

So we actually have a question from our good friend JW from

from barcoding. We hear so much about big retailers adopting

RFID. But what is the adoption rate or market opportunity with

small to mid sized retailers? Let's say less than 100? Store?

Locations, Paul, any perspective on that?

Um, less than 100 stores? So yeah, that would

definitely that'd be in the small category. Ideal

significant with the larger, you know, with the big box and some

of the boutiques that fall into the 500 store or more at the 100

store level, there certainly is opportunity, they faced the same

challenges in terms of scaling out it there, you know, there

may, they may, there may be more of an interest in leveraging,

you know, for example, that handheld technology and relying

on more of the cycle counts value proposition versus being

able, you know, to provide the infrastructure like, you know,

reader infrastructure throughout. So just because of

the total cost of ownership, and usually the stores investment,

but yeah, there certainly is opportunity there.

Yeah, I think JB I would agree with that. The only

thing I would add is I think one of the challenges the smaller

retailers have is the ability to influence source tagging. So if

a lot of their product is coming from, from suppliers, CPG

companies that already do tagging, and they've already

kind of hit that tipping point that says, hey, I'm tagging for

all the big ones, I'm just gonna go ahead and tag everything,

then it makes a lot of sense for the smaller retailers to jump

involved. But if you're a small retailer with under 100 stores,

and you somehow have to influence your particular

suppliers that don't do RFID with anybody else, that becomes

a bit of a challenge and opportunity. So you got to kind

of balance that because again, to Paul's point, you can tag it

the DC, you can tag at the store every time you get closer or

farther away from source tagging, you introduce errors of

people tagging incorrectly not tagging everything, double

tagging, etc. And then you have a bad you know, the merchandise.

And that's why I think 99% is really a tough hurdle to make.

Because that makes a big assumption almost everything is

tagged correctly. Everything is double tagged, nothing's Miss,

you know, all those other kinds of things that we work with GS

one and Auburn on and software, etc. So hopefully that answers

the question. So let's keep going here, Paul. I guess the

next thing is, all right. So here's a couple of the solutions

that we saw in the actual video, we didn't see the printer. But

those are the ones that actually allow you to scan and print but

but this is kind of your normal portfolio when it comes from for

hey, I want to I want to get started in RFID. Tell me about

the various roles that this stuff plays.

Yep, the journey typically starts with the

handheld cycle counting. And you know, the associates are

familiar with a zebra, you know, handheld computer that's

utilized and by literally Bluetooth pairing, the RFID

reader the sled that's on the bottom with a handheld computer.

So the application resides on the handheld computer, you're

SACU counting, you're collecting data, there might be a couple of

clicks in terms of if you're in a particular section of the

store or the front of the store or the back room. But you're

automatically collecting that data as we saw in the video. So

cycle counting, or there's a find it function as well, for

for both as pickers or on the pickers, we can use the Geiger

counter function. And then for items if their returns and the

tickets missing or the RFID tag is missing, for exception

praying, you know, we have a portable RFID printer. So while

it's printing the label, it's also encoding the RFID tag. So

we want that RFID tag, you know to be the UPC, again plus the

serial number, so they're printed on demand for those

particular items, but it's a you know, simple relatively speaking

to get started your investment is relatively low. To get into

RFID

Paul, thank you very much for sharing that

information with us. really do appreciate it. will join us next

time we're going to go back to our discussion with Pavel

Boyens. speaking a little bit more about fixed infrastructure,

and some of the supply chain and asset protection opportunities

with RFID and Zebra Technologies. We'll see you