Mike Graen sits down with industry Experts on Retail Fixed Camera Solutions and impact to the Retail industry including:

Suzy Monford – Focal Systems

Michael Unmüßig – SES-Imagotag

Derek Johnson – Invue Technologies

I am super excited to spend some time with you

today to talk about some technologies that are used in

retail today to drive on shelf availability reporting,

alerting, and resolution. We've talked about a lot of things.

We've talked about algorithms. We've talked about robotic

cameras that go up and down and shelf scanning robots that go up

and down the aisle and scan out of stocks. We've talked about

RFID. The next one we want to talk about is fixed cameras in

stores and on shelf availability sensors. Got three really good

guests, one from SES-Imagotag, one from InVue Corporation,

InVue technology and another one from Focal Systems. Let's listen

in to the podcasts that we have to talk about fixed camera and

sensors solutions.

Well, good afternoon, everybody. My name is Mike Graen. It is a

pleasure to have you on this on this Friday. We are continuing

our series on conversations in retail and the University of

Arkansas on on shelf availability. I'm joined with a

couple of three very, very interesting people who are in

the fixed camera and sensor space, and we'll get into

introducing them in just a second. But just just a couple

of housekeeping things. First off, we're going to we're going

to walk through this just introduce myself. I've been in

the retail supplier world for about 40 years, been with P&G,

Walmart, Collaboration LLC, I really have a strong passion for

on shelf availability. And I'm starting to hit the senior years

of my career, and I really want to give back to the industry

that's treated me so well, and I believe on shelf availability is

an incredibly important area. So I'm volunteering with

conversations in retail and the University of Arkansas and

really excited about what we're talking about here today for

sure. Just a couple of housekeeping rules. We're going

to keep this conversation very active, interactive with the

panelists, we're going to ask the the participants to stay on

the mute unless you have a question and a comment. And if

you do have a question or comment, please make sure use

the chat function to send those into us. And I'll make sure we

get those. I do have some prescripted questions that we

want to walk through, but we will have plenty of time at at

the end of every big portion of our discussion to cover any

questions you guys have. We're going to cover this based on

antitrust guidelines, we have three companies that could be

perceived as being direct competitors. So we're not here

to talk about things like prices and margins and discounts and

ROI or anything like that. We'll give you their contact

information. If you're interested in contacting with

them about any of these functions, we'd encourage you to

have those conversations offline for this. Okay. With that, I do

want to recognize two organizations which are

absolutely instrumental to help us get this put on. One is

Conversations on Retail our good met friend Matt Fifer owns that

company as an entrepreneur in the retail space, we'd encourage

you to look at conversations on in on retail, both on the

website as well as LinkedIn and consider becoming part of that.

A lot of different kinds of technology and a lot of

different areas like marketing and sales and things like that,

a lot of information about what's going on in the industry,

and obviously he's very passionate about on shelf

availability like I am. And the second is the University of

Arkansas, the Sam Walton College. The Sam Walton College

didn't get its name because of anything other than Sam Walton.

So for sure, they are very interested in the retail supply

chain, and you we're connected with the supply chain

department, which is now called the JB Hunt Supply Chain

Department. They just did a big grant with the JB Hunt

organization. So we would encourage you to get involved

with the outreach group, which is part of the University of

Arkansas in the supply chain center, and we can get you more

information on that as well. We're going to we're going to

briefly say that this is a continuing series we have looked

at algorithms as a way of being able to take algorithms and

calculate algorithms to produce OSA, that's already out there

saved on YouTube and LinkedIn if you're interested in that. We

are going to be talking about store audits in a few weeks

things like field agent and tracks etc. are going to be talk

about how to collect that data from an in store site

crowdsourcing. We've talked about shelf scanning robots,

like badger robot, zippity robot, Simbi robot, the brain

robot, those are all really good alternatives to be able to do

shelf scanning robots. We've talked about RFID. We've had a

whole presentation on radio frequency identification. And

now, there's two others that are very important one is we've got

a lot of companies doing online shopping, in stores, things like

Instacart, or individual retailers that are doing

shopping on behalf of customers and delivering it to their carts

or to their homes or to their, their cars, etc. That's another

source those no picks where I couldn't find a product, and I

have to indicate that are another good source of on shelf

availability information. But the one we're really excited to

talk about today is the fixed cameras space. And so we've got

three representatives here that we're just going to jump to that

that piece. There are three individual companies that either

have cameras or sensors that allow you to know if a products

on the shelf. Some of them tell you if they're low stock, some

of them tell you if they're plugged products, etc. So,

without any further ado, we're going to introduce, have them

introduce themselves. We're going to start out with Suzy

from Focal Systems. Suzy, would you like to go ahead and

introduce yourself and tell us a little bit about Focal Systems.

You bet Mike, thanks and I would be remiss,

since this is on behalf of University of Arkansas, if I

didn't say Hook em Horns, since I'm in Austin, and an avid

Longhorn. It's the first time I've lived in Texas in the last

15 years, so I'm feeling extra burnt orange so. But thanks,

Mike, and we really appreciate being included. Suzy Monford,

I've spent Gosh, 25, almost 30 years in the grocery industry

and I sometimes say I feel like I've been the luckiest girl in

grocery because I got to start my grocery career here in Texas

with H-E-B Central Market division. Four or five years

with them when they were nascent and growing and I got to help

develop everything from run the business new technology to store

design, then another five or six years with H-E-B writ large and

more of the same. Since that time I've twice moved to

Australia. I've worked for Kohl's, I've worked for

Woolworths leading innovation, a lot of that tech enabled

innovation. And then back here in the US, I've had opportunity

to be CEO of beloved community grocers like Andronicos.

Community markets in San Francisco Bay Area, have spent

three years working for Kroger running a banner Pacific

Northwest, being Group Vice President for Fresh, based in

Cincy, being group vice president of E commerce. And

I've been able to curate a really interesting experience

across grocery operations and merchandising and technology and

store innovations. And along the way, what's been, what's enabled

me to be effective in my job and help grow and run companies, and

equally turn companies around was really leaning into what's

new, and what's next in technology. That's why I'm so

thrilled to be with Focal Systems. I've been part of their

journey since 2015. Did the first POC in San Francisco,

brought them into Kroger and really happy to be working with

them now. Thank you.

Wow that's awesome. And except for that Texas

comment, I agree with everything you said. Hey, Suzy, you also

had a one pager that you wanted to kind of describe a little bit

about the Focal System, I think that would help our audience

understand that a little bit. Why don't you go ahead and cover

that.

Great, you want to move on to that. Awesome. So

yeah, moving from left to right, this was kind of the elevator

slide. Really, really simple. Because, uh, you know, I'm a

grocer. I'm a merchant at heart. I'm an operator at heart, I like

to keep things simple. We have best in class, fixed shelf

camera, it's tiny. It's the size of my thumb. And we kind of talk

about it as the single source of truth. These cameras are very

fast to install, very inexpensive. You know, as soon

as the iPhone got really good at, at cameras, you know, where

that technology got much more affordable. So we have an

incredibly powerful camera built into a very small, fixed shelf

cam that runs for about three years on two double A batteries,

we can install a whole aisle in about four minutes. We had some

fun with it not not too long ago, we had a race who could

install the fastest aisle. So from that single source of truth

that camera, we measure out of stocks planogram non compliance,

we measure when products are low, and when products have been

restocked by the teammates who use something called an action

tool out in the field. And so, and so what? Well, we use AI

computer vision, we pull it through our deep learning model.

We are a deep learning first company, and we have a stack, we

automate hourly shelf scans, which as an operator, oh my

gosh, you tell me I never have to scan loads and holes again.

No more ones tons and nuns holy cow game over. And on top of

that, we know precisely what time of day things have are in

stock or when they're not in stock. So we can help promote

things like on brand and what's on what's on the seasonal add or

the end cap. So hourly automated shelf scan, automated

prioritized replenishment, we actually let you put the

customer at the center of everything you do, because you

can now replenish based on what matters most first, and what

matters most is what the customer wants. We do optimize

labor from doing that, minimally, a two to 3x ROI just

on the labor alone, we automate e-commerce. The number one

reason people don't like e-commerce is because they get a

substitution or they get just a hole in their order. We take

care of all of that. And then last, but not certainly not

least, near and dear to my merchandiser heart, adaptive

plan and grabbing. When we know what runs out at certain times

of day, we can help you localize your stores by saying, hey,

instead of one facing of this product, why don't you expand it

to two and go two cases to shelf or whatever the whatever the

case may be. So that's it in a nutshell, incredible amount of

AI, computer vision, and machine learning. But most importantly,

our deep learning algorithm is informed by over now over

100,000 cameras deployed around the world, over 2 billion images

in our database, and we're learning and growing faster

every day.

Awesome. Thank you so much. I've got about five

questions, but I can't jump into this. We are definitely going to

have time for sure. So let's move on to Derek you at InVue,

you've got a solution that's a little bit different than that.

Little bit different. Again, thanks, Mike

for inviting me and again, the opportunity to sit on panel with

these other distinguished solutions provider. Again, my

name is Derek Johnson. I'm the Product Director for our sales

enablement category. So within my responsibility, I manage

three distinct product categories that provide retail

solutions, primarily in security. But the category of

interest that I'm actually going to talk about today is

relatively new to us and its intelligence sensing. So InVues

been around for 50 years, we've been a retail technology

innovator, really providing a lot of solutions as it relates

to retail security, operations as relates to key management and

other associated activities within the store. But we've

recently launched a new ecosystem that we call Live, and

it's basically a connected ecosystem that allows for

deployment of small sensors that give you much more data than you

would see in the store. So now whether I'm inside the store or

1000 miles away, I can get insights from individual

sensors. And so this aids in not only security, but planogram

compliance, and customer behavior insights. And so we

look at what are some of the other pain points within the

retail space besides just security or associate

productivity that we can address with the solution. And that's

how we came up with the idea to develop an OSA sensor. And so I

have a video that I'll show in a second but basically the OSA

sensor, my two colleagues are going to talk about front of

shelf solutions. We are a back of shelf solution on not only

shelves but also hanging merchandise. So very small

connected IoT sensor that doesn't take pictures, it

actually just scans and it's scanning for the presence of

material in front of it. And so we can monitor what's available,

what's out of stock with, and I'll show you this in a video,

but what's available in terms of low stock as well. So, Mike, go

ahead and run that video and it'll explain a little bit more

about the OSA solution.

Yeah, I'm gonna go ahead and play it with a caveat

that once we jumped on the zoom the other videos I was playing

were a little choppy but we'll give this one a shot.

InVue's OSA sensor works with Live to accurately

track the availability of most valuable SKUs and deliver alerts

when shelves are empty so that you never miss a sale. Each

sensor can be instantly added to existing shelves or hanging

fixtures within seconds. Direct visibility of on shelf status

gives associates the information to quickly stock merchandise and

ensure your shoppers have access to the products they need. OSA

sensor accurately monitors the product assigned to each space

and sends a notification through the Live app to make associates

aware that a product needs to be restocked. When used with a

dispenser or pusher OSA sensor can also recognize when a

position is low, so you can restock before merchandise is

unavailable. All data is captured via Live software,

allowing retailers or brands to evaluate out of stock trends

across stores and implement strategies to improve sales.

Thanks Mike. So as you can see, similar to the

fixed camera solutions were battery operated so really quick

and easy to deploy. One thing that we found in terms of how

people see this and where they find value in the ability to

deploy this very quickly, only on the products that really make

sense. And now when I say sensor is not going to make sense for

every single product in the store, but on certain categories

in certain areas within the store really makes a lot of

sense. And just the, the stream of data that it can collect is

really driving a lot of value. So really excited to talk more

about that. Thanks, Mike.

Awesome. Thank you, Derek. Appreciate it very much.

Michael. Michael gets the he gets extra credit, because he's

actually calling in from vacation PTO. So Michael, tell

us a little bit about yourself. And then SES-Imagotag.

Yeah, let me thank you very much for the

introduction. Let me start with with a small, more small

introduction of myself and the company. We are since could give

me allow me to share. So I will start here with this. Perfect.

That's. So let's start. I'm working for a company called

SES-Imagotag, which is yet by far the largest manufacturer of

electronic shelf labels and IUC devices for the retailer in the

world. So typically, if we are growing by around 20 to 25%

annually, and reach the last year, just about 400 million of

revenue growing extremely fast, having a big footprint now in

the US as well. And having also very large stakeholders in the

crew with Qualcomm from the bay, are eating as the inventor

startup. It's also fair to say startup, as a part of the MIT in

Boston invented the electronic, you pay for solutions. So we are

stockless, the company in France, working together with

the largest retailers in the world having 15 offices

globally, three manufacturing plants and more than 120 people

in total R&D. We're working together with the leading

retailer 350 leading retailers globally, including various

teams, one or two very famous one in the US just Walmart

announced to work together with us in terms of digitalising the

shelf as well as cold Scroop using our IoT technology to

really help to make the digital journey or leverage the digital.

So what do we do? So it's not just it's a bit of a merge of

what my what what Susie and Derek is that the primary

product is an electronic shelf labels. And especially in this

time, where we where we see that the price is changing very

often, this is a very helpful tool. And we combine this tool,

the electronic shelf labels with new sensors. And this new

product is the camera you see here, it's an amazing product,

you just click it on the shelf, it immediately recognizes the

product on the other side of the aisle have a motion sensor into

it. And immediately recognize that out of shelf products are

recognizing this base product planogram, and so on and

compares it and prints this and transform this data into

structured data. That's one of the pictures from the latest

deployment we have in France for an example, where we just

installed this camera and it's just amazing, we install every

day in a store 100 to 120 cameras. And it's even not

necessary that we have our own employees there the technology,

it's so simple, that even their associates in the store are able

to install this kind of cameras with a battery life of up to one

year. And it's really incredible. But that's not

sufficient. That's not enough, because we have realized that

the camera can only see it to the picture. So what we have,

what we did is we used our 30 years experience in building

ultra low power IoT devices and merge them together with

inventory sensors. So we use the sensor and see that a product is

out of shelf, but we combine it with a time of flight sensor so

that we really can predict when is a product out of shelves so

that the associate can be there before product is out shelf, we

use the camera for the planogram compliance, we use the inventory

sensor if necessary for the high volume products to predict out

of shelf and we use the electronic shelf labels to adapt

the pricing and being always the ones and having a single

product, a single cloud, a single IoT management system

which combines all these three technologies. The impressive

thing on it and that's the our history is that we not just have

IoT sensors. We are CV and AI companies since we have started

30 years ago and we are working together with leading partners

so just having as a bag as a core system working since years

together with SAP with Microsoft in terms of planogram comparison

with Blue Yonder Panasonic globally in Japan in US and

Europe as well as relax and managing the camera network

together with our global partners is the extreme

networks. It's Cisco Meraki, Aruba, Lancome Huawei, they are

the global partner network. And that's what we do with our fixed

camera business. So thanks for giving me the time put in

production, and back to you, Michael.

All right. Thank you very much. Thank you very much.

So so we got, we have some questions already, from the

folks who have joined us, but I've got some setup ones. And

Suzy, we're going to start with you, and you've got a extremely

interesting background with a lot of experience in retail

running retail operations doing merchandising and retail. Now

you're on the technology side providing solutions to the

people that they used to be. So obviously the first question is,

what's the business driver here? You mentioned some of it in your

kickoff, but we'd love to double tick click a little bit why why

is suddenly these solutions have to be in place? What are the

challenges that retailers are seeing in and what's the

business challenges?

It's all I gotta just maybe say that it's a

people centric solution. Retailers very much desperately

need to put the customer at the center of everything that they

do. So they can differentiate themselves, so they can maintain

and grow market share. So to do that, you have to take care of

the other set of people that you employ, which is your employees.

And right now, we are in a decri world we live in in a day of

labor crisis, we don't have enough humans. And so to think

that we can continue to run and stand up businesses that can

survive and thrive and invest labor in what I consider to be

non value added tasks like the manual walk around the store to

do scanning of lows and old. There's no value add there.

There's not one customer that shops, you know, that shops at

Kroger stores, there's no I shop Kroger, because I see them

scanning lows and holes. So we've got to deinvest non value

added labor, and automate and optimize the store. So our

entire point of view is we're going to digitize the store, so

that we can put smart OODA Loops into how we run our business,

observe orient decide act. We've got cars that can drive

themselves that automate basic fundamental decisions, we want

to do the same thing inside our store, so that retailers and

merchants can invest that labor into being smart merchants

building and writing better ad seasonal promotions, getting

behind their own brands, having labor to invest in customer

experience, customer service, dedicating labor and teams to

digital e commerce, because we're not just you know, a store

is not just a brick and mortar store. It's also an online micro

fulfillment center. So there are many things and many places to

invest in the go to market strategy to invest that labor

in. It's certainly not in the manual tasks. So then we need to

make running stores easier, faster, we need to be able to

have speed to market when we hire a new employee, get them to

become highly effective very quickly, with smart tools in

their hand that helped them know what to do, what the customer

values most getting that product to shelf getting the most

important products to shelf in real time. So the the nuts and

bolts answer is we need to upskill labor, we need more

labor, we need technology to scale our human labor. And

that's the reason that retailers of all types, not just grocers,

are reaching toward AI computer vision for their solutions.

Wow, that's a great summary of the problem that

we've got for sure. Michael, adoption, you mentioned adoption

in your kind of opening discussion of your solution.

Clearly adoption is expanding in your space. Do you think some of

the reasons that Suzy just mentioned are the reasons for

that adoption or what are some of the driving factors for

adoption of this tech?

We see several things the first of all there

was it started with a bit of a war between the E commerce and

retail already 10, 15 years ago. So it's not new but it's

accelerated and what we see I'm working for 30 years in the IT

industry I never have seen that an industry like like retail

it's so evolving, right like right now. So there is a

shortage of personnel or associates that's one thing or

the other thing is are there are new expectations from the

shoppers as well. We have a new generation of shoppers which is

used especially in a pandemic to buy online and they are looking

now for a new experience in store and what they hate what

everyone hate is the lane at the checkout and what everyone hate

is have no product availability when it comes to shopping in

store. So that's one thing. On the other thing we see, in all

the countries we work and it's more than 60 that we have this

labor shortage, this labor shortage is new in the past, we

was fighting very hard with our ESL to find the right sort of

cost of ownership, the return on investment. Now we are there and

our our customers, our retailer said, Is it all? Or do you have

more? And we said, Yes, we have more, it's not just that you can

do automatic pricing, you now see the shelf, we are talking

about a digital shelf, which that if a product is lower, not

available, we give this information to ecommerce to

omnichannel. If it's low, we change the price and give a

recommendation on the price. So many things are doable now with

this technology when you have a single platform backbone in the

in the center of your writing. And that's what we that's what

we see definitely in all of the 50,000 stores we have equipped

with our technology.

Okay, great. Well, Derek, question for you. And

then we've got a couple questions that are coming in.

And just a reminder, if you do have questions, feel free to put

them in the chat. And I'll I'll throw them to the panelists here

after each section. What do you think the future is Derek? I

mean, it seems like it's fixed cameras and sensors have sorta

coming on fairly quickly over the last several years. I'm

assuming the the future is bright for this kind of thing.

But talk to us a little bit about what you and InVue think

about the future.

Yeah, I think it is. And it's because of all the

business drivers that Suzy talked about. You know, when I

look high level, we're using sensors and cameras more than

any other time, if you think about all of our vehicles have

tons of cameras and sensors, our homes, cameras and sensors. And

now in the retail space, you're seeing a need and and again, for

those business drivers that Suzy mentioned, the need to

supplement and sometimes replace, very hard to get very

expensive, sometimes labor activity. So now, as the

technology continues to evolve, I think it's going to push all

of us as solutions providers to innovate even more, you know I

think about it in terms of 3d printing, you know, 15 years

ago, 3d printing was novel. And I remember our CEO at the time,

the company I worked for saying, you know, in 10 years time,

we're gonna have a 3d printer in everybody's house. Well, we're

not quite there, yet, but you probably have them if all of us

have kids, probably somewhere in your kids school there's a 3d

printer somewhere. And I can see a day where there are connected

cameras front facing for planogram compliance and plugged

and in rear facing sensors, working together to provide

richer and richer data. I think as the technology improves, as

cameras get better, as sensors get more com, more complex and,

and sophisticated, I think there's going to be a higher

need for better data management, because now you've got all this

rich data being gathered, what do you do with it? How quickly

can you deploy that to a person who one needs to make a decision

and then two another person who actually needs to do something

about it, but I can see all of those things rising and

improving together, and not in a long time. I think we're you

know, I think it'll continue to improve, you know, five years

from now we'll be having another seminar and all of us will have

even better and more sophisticated solutions to talk

about.

Great, thank you, Derek, super. So if I'm a

retailer out there, or brand owner, either one, depending on

who I talk to, I get a different response. The people who have

robots think robots are the future, the robots that scan the

shelf, the folks who are out there, and we've had them on

this, this this podcast before and they they make a very

compelling argument, why a shelf scanning robot can provide you

the level of outs and alerts and pricing that you can't get

anywhere else. We've also had people on who've produced the

algorithms, those algorithms are used to say, hey, we don't think

this is selling as much as we should be. So we think there's

an out of stock, go check it. We've also had a panelist on

RFID, you get the point. There's other competing solutions out

there. So as we think through fixed cameras and sensors, how

do you make and articulate do they work with these other

technologies? Do you, do you and what are the advantages that you

see for the fixed cameras and sensors? And I'll just kick this

open to any of the panelists who would like to ask to answer this

one.

So you know, and Mike we talked a little bit

about this, but I think it's important for all of us, and I'm

sure we're all very articulate in doing so understanding what

our technologies can do really, really well, but also

understanding what we can't do. I think, as we look and I've had

the pleasure of sitting in on I think all of those seminars, I

learned a lot really, really informative seminars, but what

I'm learning is that, you know, as a solutions provider, you

really need to understand that it's probably unlikely that one

solution is going to solve every single problem. But how can my

solution meet a specific need, possibly in either a niche

vertical or even if specific is a niche product category, how

can I draw value for that product category? And I think as

a solutions provider, if you can identify that and really craft

your solution to meet that need, then that's what that's what you

chase. That's what you go after. I think trying to trying to

swallow the ocean ends up choking you and you ended up not

being able to provide really the value that you want to, to your

to your customers.

Okay

I would piggyback on Derek with what you're

saying. And you're spot on. I mean, one of my roles with

Kroger as Group Vice President of E commerce and Randy Ocado

sheds, and the Ocado fulfillment and that's an Ocado fulfillment

centers is a part is the probably perfect example, for

the use of robotics in in retail and food retailing. In a mere

seconds, a hive of robots can pick an entire order in mere

seconds. When you come to the retail consumer facing, we want

to drive more products and the right product to the right shelf

at the right time of day when the customers want them.

Therefore, we need more data. Robots generally do one scan a

day. And that's it, they don't run anybody over and there's

nobody blocking the view and that the thing is even working.

And I get it, I love robots, I saw the Jetsons as a kid. So

it's super cool. We believe in fixed shelf cameras, because

they never call in sick they are never late. Ours wake up one

time an hour or more frequently, you could have an image every

five minutes if you wanted. It's about the amount of compute that

you need and what the data that you need. So we find that

investing in AI, computer vision via the fixed shelf cam, the

most efficient, the most scalable, the most affordable,

and the most reliable for real data in real time. RF, RFID. I

love it. I sort of love it hate it, because I can pay for

something with the click of my iPhone. So sometimes my checking

account may not love it. That's where RFID works at a at a at a

Payment Center, AKA your credit card swipe machine. But RFID in

grocery store, it doesn't work. You know, we sell things that

come in cans, and it doesn't read through the metal. And it's

really expensive. So again, the most efficient, sustainable,

ecological, and data rich version solution we found is the

fixed shelf cam.

Yep, and I just summarized for a couple of

reasons. Number one is you're scanning it as frequently as you

need to to see if the in store conditions are right, to your

point versus a robot that's literally going through the

aisles.

One time a day.

And I think the other challenge of a robot if we

can just be transparent, is that's just more stuff in the

aisle that creates shopping frustration for those people who

are in the aisle with their grocery carts. And now I've got

a navigate this robot going around. I think those are

disadvantages, and there are some advantages as well. But

there are some certainly some disadvantages, Michael, you were

gonna say something

I think we should leave the decision to, to

the retailers. And we have seen in the technology that there is

not a single route to success. So what would we learn there,

there are multiple routes to success. Therefore we develop

and that's that that's our philosophy, we developed the

fusion cloud platform where we connect the robots, the RFID

sensors all together and merge it to a sensor fusion, of

course, and I'm agreeing with Suzy, we also see that the

camera is the best solution because at the end, it's it's

cheaper versus when you see the maintenance cost running a

robot. It's much easier to install a camera replace the

camera when a defect then to try to find robot specialists in all

over the US. That's that's a tough job. And if you see the

shortage, not talking about the shortage in shopper in retail

associates, I'm talking about a shortage of IT specialists and

IT specialists for robots. It's tough to find everywhere in the

world. So that's why I say just replacing a camera on a shelf,

just the kid can do it. And so that's why I said it's just from

a maintenance perspective, the better solution. But of course,

if someone and we see it in Europe have invested in robots

and they're heavily invested investment and profits. I've

seen your your webcast as well. There are rollouts and if

shoppers and retailers decide for it, just include it to our

fusion platform, and we work on it. But I like to work from

Suzy, it's a better choice to go with cameras.

Awesome. So we have a we have a question from the

audience, which I think is pretty good one and I will

summarize it by saying this solution that you're putting in

is not necessarily a technology solution. It's a change

management solution. Because here's the question, how do you

provide, How do you get the retailer to engage and actually

use the data that you provide? We find that there are retailers

that know that they're out of stock, but they don't place

purchase orders to restock the inventory. So you're giving an

alert a solution that says hey, we have an issue here. but it's

really a change management to get that to the right people.

Who are the people that actually address these alerts in the

store? And how do you work at this as a change management

project?

I'm happy to take a go and then maybe let my

teammates equally weigh in. Yeah, I love that question,

because it's acknowledging that this requires a paradigm shift,

a culture shift. And again, we've all approached this, I

know in our solutions, and Focal, we again, we work to put

people at the center of what we're doing, whether it's the

customer, but inside the store, it's the associates, it's the

teammates that run the store. So through our operating system,

we've got something called the action tool, which is an app

that you can run on a UNFI device, or moreover, it's a

zebra handheld that we use. And it directs the the associate, to

do all of the restocking replenishment task in sort of a

gamified fashion, that gives them instant positive feedback,

it's a positive feedback loop. And it helps them they no longer

are, they hunt, hunting, for the product in the back of the house

that they need to replenish. Because we've got cameras in the

back of house and on the floor and top stock, we guide them to

that we help them prioritize their work, we give them tools

to give feedback. So that's one way that we work to create

change is we enable the associate, to do their highest

and best work fast and efficiently. So much so to the

fact that some of our customers, we've literally had employees

say, oh my gosh, if you ever take this technology out of this

store, I want to, I'm gonna, I'm gonna quit or I'm never gonna

leave this store, because I love this store, because it's got

Focal. And we're getting that positive feedback from our

customers around the world, particularly with Walmart, with

whom we work in a in a massive rollout as I speak, in Canada,

for instance. So it's the workers and the teammates in the

stores, we find if we can create cultural change there, then that

goes upward to the category managers to the store leaders.

So it's not just corporate office down, it's not just the

chief merchant chief operators CIO, we build from the ground up

really fun, fast, easy to use tools. That's how we're

affecting change along that paradigm curve.

Awesome. Derek, Michael, any other builds on

that.

Yeah, similarly, understanding who those people

are that that, that really care about this, you know, you're

right, some to the question asker, some retailers will say,

Yes, I know I have a problem, just don't want to fix it right

now, that's gonna be a hard sell either way. But finding and

identifying retailers that one, they may not already and we

found success with smaller retailers that may not have a

really robust OSA system already or they may rely just on manual

audits, they are prime for for being introduced to some simple

tech that they can deploy, again, at a single product

category, or maybe a small grouping of products that are

immediately gonna give them information, our sensors scan

every five minutes. Now, you don't you only get a you only

get an alert when you see an out of stock or in the case of low

stock. So they can either choose to act immediately or that

collection of out of stocks and low stocks can be presented to

them in a really quick report. And so we have different ways

that they can respond. But I think point one is really

understanding that retailers pain points today, what they do

today, how they manage it today, and looking for opportunities to

introduce tech that's actually going to save somebody money,

make the company more, save somebody's time and make the

company more money. I will admit there are a lot of retailers

that are just okay with their their chaos and or their

homegrown OSA system that may not have a problem. But I think

identifying the retailers that have those clear pain points is

step number one really got to get in front of the right

people.

Awesome. I had a I'm sorry, go ahead.

I have I have I think we need to differentiate

we have a tier one and tier two and tier three retailer

globally. So there is not a single answer. Having changed

management means we change things. If you don't, if you do

not, if there is no need to change things because they are

that much integrated into like SAP for an example, we have a

worldwide partnership with SAP. So when we talk about computer

added ordering, we have our interface between our system and

SAP. So there is not that much of change management and the

other thing is to change people's mindset. It's a lot

about to convince them that we not destroy their job because

they have fear because there is a camera which creates fear it

could destroy the job of course we are now in a in a job

project. But in the long run we will see that will change. So

change management means we need to convince the folks the SSA

and therefore we started to have an on and that's our way to do

we have an on consulting part of it. We're globally where we

really have consultants, from other consulting companies,

which are used to train people, their associates the management,

how to use this technology, because it's completely new.

They're excited, right? We are used to work with or we are used

to try for Tesla with a lot of cameras, or Mercedes or Porsche

or whatever, but we don't feel the camera, we don't see the

camera. That's a bit different. If you look to the cameras,

focal installer, we install, you see that, and you get the fear

on it. So change management is not just convincing them for a

new way to work, but also to convincing them that it's not an

enemy, it's a friend, because it helps. That's the thing we need

to do. And I think that's that that's the important thing on a

on a change management perspective to to go about this

approach.

Awesome

Mike, can I just say one thing I just want to

build on what Michael said real quick, Michael 100% in

alignment. I just wanted to throw out this notion because

whomever wrote the question, if it's helpful, similarly, you

know, at Focal, yes, we're a SAS company. But we do we lean in a

lot to thought leadership. And being a very, our mission is to

be the best consultant and partner we can be. So along that

line, I would invite any retailer out there listening, if

you need some help, and you want to talk about AI, computer

vision, not that doesn't have to be centered on Focal, but how

you enact change management, just reach out, we're happy to

chat to you because, and here's why. What I'm really afraid of

and I've started speaking, speaking out to grocers, is

right, now we've got such a supply chain issue, right? It

used to be that as a retailer, we would we would drive and

incentivize a minimum of 97 and a half to 98% OSA from our

supplier, so from our suppliers, that's where penalties would

kick in. But now living in a supply chain crisis, we've got

suppliers who are under the pump, and then retailers who are

increasingly growing accustomed to 7, 9, 12, 15% out of stocks

day after day after day, so much so that they have stopped doing

some of the daily disciplines like scanning lows and holes.

And you've got to do that if you don't have aI computer vision

because then you don't know. And what happens is you are it's a

slippery slope and it goes very quickly to the bottom. So I'll

put a point there, but change management starts with don't be

afraid of the data. I think Michael, you said that. Derek,

you touched on that too. Don't be afraid of the data. Collect

the data anyway you can. And there are consultative companies

like likely all three of us that are here to help you learn how

to lean in and action that data.

Wow. That's That's huge. That's huge. And the

follow up question I think I've got from that from the from the

chat that just came through, is I don't think the retailer is

the only customer of this data. When we think about this, there

are brand owners to your point Suzy Hey, I'm shipping 98% on

time and in full into your store but your stuffs not making it to

my shelves and my shelves don't look right can we provide

because the brand owners the CPG companies can the merchandisers,

the Acosta's the Cross Marks, etc. Could they be looped into

this connectivity that says, hey, we may not be able to get

to every alert from a retail perspective. Can the brand

owners and the merchandisers, can the direct store delivery

people? Because they're responsible for delivering

product without really the stores engagement other than

approval, etcetera. Can the direct store delivery folks use

your sensors? Again, it broadens the scope of this technology

outside just the retailer. But for any of you just talk a

little bit, because what they're asking is, isn't this something

that's broader than the retailer? And I think it in fact

is.

Yeah, and you mentioned all three entities,

the brand, the merchandising companies that they work with,

and ultimately, the retailer. Now, it's really important that

all three of them are willing to play because the retailer they

are selling the product, but they have to get permission to

install that camera to install that sensor, they have to be

fully bought in and understand the value that it's going to

bring. One interesting discussion that we've had with

some brands is understanding performance, where certain

things perform you know whether they've gotten the same product

deployed on an end cap, and also their normal modular. If they're

just looking at point of sale data, they can only see oh, well

we sold this number of items. But now if you've got whether

it's a fixed camera, or a sensor that can not only detect outs,

but it can also detect lows, now you can get a better

understanding of well maybe that incap performed a lot better

than I expected or maybe it was a doll and maybe I'm not going

to pay for that face next time because I'm getting better

business in my my modular. So there's definitely I think value

for both the brands, the merchandising companies they've

worked with and then ultimately the the retailer.

Yeah, I think you're, you're 100% correct. I

mean, in terms of Focal, we don't monetize our data. We

that's up to the retailer. If the retailer wants to monetize

the and commercialize that data, great, good on them. No, no, no

worries there. CPG, we get tremendous amount of reach out

from CPG. And not just CPG. But also third party providers, the

folks that are enabling e commerce delivery or click and

collect and pickup. So Focal, you know, we want to be the

world's best consultative partner to our retailers. So the

when we work with the retailer, they own their own data. But

you're very, you're right, this data is very, very valuable. For

CPG, for third party, and the retailer themselves.

I'm, I'm agreeing with with Suzy. So the

thing is that data belongs to the retailer. But there is there

is a balance between the CPGs or the vendors and the retailers

because both has a common interest to have increased

sales. So what we learn and that's interesting when we see

also to reducing carbon footprint is using this data to

reduce the effort monitoring yourself. So you have another

session where you said you made this OnStar or on site

monitoring people looking by by you being at the shelf, does it

make sense in this world where Tesla's have more cameras than

any other vehicle in the world, so it doesn't make any sense. So

the world is changing. And the other world is that means we

have we have a we have a crisis, not only just in Ukraine, we

have a crisis that we have to look on the carbon footprint,

that means using this data to reduce that we have all sales

for, for small oriented on the shelf, on the consumer, on the

shopper. That's exactly what we can do with it. But it's this

decision of the retailer that we know from Europe, that they sell

this data for an enormous amount. That's what we can help

with our shelf edge or with the shelf cameras, exactly what we

can do, it's a business model for them as well, supporting our

total cost of ownership or reducing the total cost of

ownership for shell edge cameras.

Okay. So so somebody just chatted and asked me, isn't

this too expensive. And while I don't want to get into the cost

of this solution, or anything like this, what I will say is,

if it was too costly, I don't think these three companies

would be on right now talking about the adoption and expansion

that they're seeing out there in the industry, they wouldn't have

any installed they get one maybe opportunity to demo it. And then

if it's too expensive, Suzy and I both know, based on retail, it

tells you pretty quick whether it's going to work or not so so

what are the ROI benefit? Let's not talk about what they are,

because I don't want to get into, you know, a pricing

discussion, but I am interested. So the retailers that are

deciding to use your guys's solution, I'm assuming they're

doing it based upon increase sales increase on shelf

availability. Anything that looks like recovered sales, I

was out and I fixed it. So what are some of the key KPIs that

these retailers are using to say, this is a smart investment,

in addition to the people savings that I'm not having to

people do scan out? So maybe just give us a high level of

what the KPIs the retailers are looking for?

Yeah, I'm happy to jump in there first. I mean,

it's what we've been talking about first and foremost labor,

how do I stop investing in non value added labor so that then I

can either take some of that savings to the bank or reinvest

it in areas so I can differentiate and make my

concept of my shopping experience my CX even more

powerful. So there is a massive, massive ROI on labor alone. And

again, all the largest companies that we work with around the

world, we usually get there first, then you mentioned sales.

Yeah, so sales, gross profit margin, you know, with AI,

computer vision, when you know what's in stock at what time of

day, you can help shift the mix, you can help promote own brand,

you can help promote your seasonal in and outs you can

promote anything you want to by having a laser focus on that. We

believe if you see more, you can do more. So this information

every hour on the hour or more frequently, if you'd like

enables you to be a smart, efficient merchant. It ties into

the E commerce layer that again is incremental, profitable sales

lift. And the one thing I want to make sure I'm always an

evangelist for is I want to come back to the people piece, the

associates working in the store, when we can make these jobs

easier, better, more fun, then we unleash professional benefits

and wages for everybody in our business. We're going to attract

hire and keep top talent. We're going to grow careers on behalf

of our retailers. And we know that we need to do that to help

the industry continue to survive and thrive. But it starts with

labor sales, gross profit margin. Ultimately, it's EBITDA

and that's where we've seen you know, I could give you all kinds

of fancy numbers, but they're all true at 10x or higher return

on EBITDA. And that trickles down to earnings per share if

you're a publicly traded company. So it's really how the

operator, how the retailer invests, the labor savings, the

labor efficiencies, and the lift of sales and gross profit

margin.

Yeah, one thing that Michael mentioned about

being more efficient when we look at how CPG brands utilize

merchandisers, some merchandisers, they go to stores

on a schedule, and they just go and they may go to a store that

really don't need any replenishment. But understanding

that data before they ever pack a truck or before they actually

arrive at a store then allows them to realize OPIC savings. So

that another figure I heard from a major brand, you know, for

them 1% OSA improvement equated to about $15 million in a

recovery of of sale. So, the money's definitely there when

people understand what the OSA is, but then to what we've been

saying all along, actually being able to take action on it and

make some some transformative changes within the retail space

is really where the value lies.

What we what we've seen, we did a survey, and

I'm saying in France. And what we realized is three things.

First of all, it's the gap scanning, so saving, saving time

and labor, but that's enormous. We talking 100 source about 40

to 50,000 hours a year. So that that that's even if you look

from a labor shortage perspective, and that the need

for some areas for some product character categories that you

need, well skilled people then then it's enormous when. The

other thing is increase in revenue. That's also enormous.

We see if you increase by 4% on shelf availability, you can lift

your revenue by around 2%. That's the most important thing

have loyal customers. And what we have seen the Net Promoter

Score rises by 50 to 60 points, just just having a product

available. That's not all we see also that we see in the omni

channel that that if you have stores which using an app that

you purchase, that that if a product if you see the available

availability like like for Instacart. And any others that

you that you sit select on your mobile phone the right products,

because not a product, which is wishful thinking which is not

there the selected product which is available, if you also have

happy ecommerce customers. And that's very interesting. The

other thing is when we go out of groceries and then if we look to

DIY stores, could you imagine you go to Home Depot store

looking for a light bulb and you do not find the right size that

the necessary ones or can't mark comes to the evening and it

cannot switch on the light. Didn't know that we won't go

there anymore. So this is just disappointment poor and that's

that the moment of truth where such a solutionist is helpful.

Like Like, like the help yeah. So that's the small moments

where you really create happy shoppers are the final and that

that that is the why for this. By the way, we haven't found a

single customer which have a return on investment longer than

four months. That's that's also nice. That's in all of the 80

projects, we are we are rolling out and that's really amazing.

This thing right here is the game changers.

Kroger Kroger, if you don't have the flavor I'm looking for I'm

going to use your Wi Fi to order it from Amazon. Thank you very

much. So it's the ultimate game changer in terms of where the

smart people spend their money. So you're all three of us

technology help to make sure the products that the retailer

merchandisers are saying the customers want are available for

them. So I applaud all of you guys, I think it's great. I do

want to get each one of you just a minute or so if there's any

other closing comments in the way I like to do the closing

comments is, was there a question that I should have

asked that I didn't. And if if I if there is give us some some of

your thoughts of where this is going and anything else that

you'd like to address that I didn't ask specifically or our

audience didn't ask. Suzy, we'll start with you.

Gosh, you asked a lot of good questions. And we'll

we'll leave our college football teams out of it. You know, no,

but I might just carry forward. I'm back at the office after a

couple of days in Denver at FMI FMI fresh forward which is their

fresh centric conference. And we spent a lot of time talking

about sustainability. So it was fresh health and wellness and

sustainability. So the one territory we didn't cover here

is something that we are quite advocates and evangelists for at

Focal is that when we can run better stores and we have a more

efficient supply chain, which starts with writing better

orders. If I can't write better orders if I don't know my Osa

and my out of stocks, not in general and not tomorrow or next

week, which is what most perpetual inventory systems do,

they take days to tell me the truth. Whereas we can tell you

the truth in an hour or faster or right now if you like, and we

give you actionable tools. But when we can do that we create

better merchants who can plan better, we create better

operators who can write better orders, and there's less waste

and less shrink, less waste and less shrink, the retailer's

winning, wages can go up, prices could go down. But equally, the

sustainability footprint. We're not producing and transporting

food all around the world that's only going into the waist bin.

So here in the US, in particular, we waste 30% of all

the food that we sell. So one of the things that's underpinning

Focal, is this idea of creating the new food economy. And how do

we use technology, automate, optimize brick and mortar retail

for all the obvious KPIs? Yes, but equally to create a more

sustainable ecosystem and retail, so I just thought I'd

share that it's ever present. It's not just the topic for ESG

chat rooms. It's how companies are being run today. So I wanted

to make sure I added that to the conversation.

Awesome. Thank you very much, Derek. Closing

thoughts.

Michael, great sitting on a panel with you

guys. Like I said, I've watched all of these seminars learn a

ton excited to see where this portion of the industry goes and

and how we'll be carving out our niche. But yeah, I'm really

excited. Again, thank you guys for your time, and excited to

learn more.

Great, Michael.

Derek, you ask really amazing questions. But

there is one typically missing in this field of IoT, there is

one big risk we are missing to talk about that cybersecurity,

because we install IoT devices in a store. And cybersecurity is

the big stopper, if you have the best idea in the world, and you

even if we talk whatever we talk about the benefits in the field,

it can stop us. And that's why I said typically, we need to raise

this question about say IoT cybersecurity, because you have

devices, sometimes open devices in the store, which connects to

the internet, which connects to the core, like SAP, whatever, it

connects to the core system. So suppose security is for me the

big thing in IoT and retail next to the benefits they have. And I

think that's the thing, if you talk about the robots, the RFID,

the sender's whatever. I think the big thing on top of

everything is cybersecurity and how to solve this topic, if you

have millions of IoT devices, IoT devices in a store. A very

interesting question, because this shows how difficult it is

to manage these devices.

Alright. Excellent. Well, thank you all very, very

much for your participation for the panelists, I can't thank you

guys enough for for taking time out of your busy schedules. And

secondly, for the attendees, a couple of things. The first is,

you got to hear the results first. Our plan is to share this

podcast on LinkedIn on the Conversations on Retail and the

University of Arkansas channel, probably in the next few weeks

or so. So you'll be if you missed it, if some of your

colleagues missed it, there'll be a chance to to cover that

then please, please join us in September, we're going to cover

the last of the on shelf availability techniques, which

is store audits. We've got people from Intellect, we got

people from Tracks, and we've got people from Field Agents

that are all going to be part of that. And very, very different

solution than we just talked about here. Thank you all very,

very much, Suzy, Derek, Michael. Thank you, great insights. And

we appreciate you spending some time with us so much.

Thank y'all. It was a pleasure.

Thanks guys

Thank you very much. Cheers.

Bye. Bye, everyone.

Thank you, bye bye.

Thank you for joining us to talk about the

fixed camera and sensor solutions. I hope this has been

very helpful to give you some of the idea of some of the

capability that's out there in the industry today. For next

week, we're going to we're going to shift gears back to a topic

that we really think is invaluable in terms of on shelf

availability and onhand accuracy, especially in the

apparel and the general merchandise area and that's

called RFID radio frequency identification. Join me next

week as we invite Bill Toney, Vice President of Avery

Dennison, the leader in RFID technology tags. Join us on our

podcast to talk a little bit about the different kinds of

capability that's available to retailers and brand owners