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

Part #2 of this series series explains the driving forces for RFID in the retail supply chain and the Zebra fixed infrastructure and automated data capture technologies such as shelf scanning robots.

Greetings, my name is Mike Graen. Welcome back to

this week's podcast. We're gonna pick up on a conversation we

started last time with Paul Baboian of Zebra Technologies.

Paul has been in the RFID space since about 2004 working very

closely with Zebra and other solution providers in the RFID

space. We're resuming our conversation with Paul, starting

with some of the opportunities for fixed infrastructure as RFID

that relates to both asset protection purposes, as well as

upstream supply chain visibility. Let's join our

discussion that we started last time. So let's talk about the

way that that happens today. So from from a from a typical

technology, there's a lot of these pedestals that you see

outside of retail stores that are called electronic article

surveillance. They basically alarm if that particular tag has

not been deactivated, the alarm goes off. But there's absolutely

no intelligence and it's just an alarm that basically says Beep,

beep, beep. And, you know, I'm thinking, honest people will

probably turn around and go what I do wrong. But But But But

obviously, we don't know what left the store, it's sort of a

dumb tag. And what we're thinking about now is your

technology and other, obviously it's hardware providers

technology, that actually allow us to be able to have

intelligence to know what's left the store that hadn't got paid

for. Talk to us a little bit about this.

Boy, yeah, to your point. First off, the RFID tag

contains the UPC plus the serial number. So when there are

readers at the exit or at the checkout, you know, in addition

to other areas, obviously, when something goes out the door that

is unpaid, we know exactly what went out the door. So we can get

very specific about a what went out the door and looking at, you

know, the dashboards that you can see. Whether it is on the

receiving strength side, or whether it is on the exits,

right, the exit train. You know, there's a lot of benchmarks now

that can be provided. Number one, fundamentally, just to

decrement the inventory, because what has exited and number two,

being able to track for potential theft detection,

right. And it depends on the infrastructure how that is

tracked, it could be that there are these smart exits, that's

referred to the RFID smart exits, in terms of tracking what

is going out and comparing it to the POS T logs or transaction

transaction logs or B if there's infrastructure at the checkout

counters and at the exits, right and at maybe other exits

throughout the store, besides customer exits. We can take a we

can actually identify that theft, obviously, as it is

occurring. But there may be some other interest in insights into

understanding maybe where where items are being placed in

backpacks, or what part of the store they may go before they

exit or how they're being exited now with organized crime. So

there's there certainly is a lot of insights that can be provided

for the for the AP, you know, department.

Yep, exactly. So this chart up above is just a

mock up. It's not real data. So don't get don't get too excited.

But this top part, there's two different types of shrink and

again, shrink is again defined by unaccounted for inventory.

The first one is what did I receive versus what I expected

to receive. So it's kind of receiving in the backroom of the

store. That could be from a supplier, direct store delivery,

it could be from your own fulfillment center or

distribution center. But in this case, I expected to see 428

pairs of jeans, I only saw 426 and here's a couple that I found

that I didn't receive. So these were shortages. And then the

bottom one is is just the opposite, which is what's

leaving the store that we didn't get paid for. And again, this

tells me that hey I found a total of eight things, eight

jeans in this case and again these are just mock ups but

eight jeans that left the store that we never saw a

corresponding transaction for. And that kind of information we

would never have gotten with EAS and and again EAS served it's

time for a long time. People are starting to talk about RFID as a

potential replacement for EAS in the future.

You know Mike if you think about it, if a big box

is doing an annual maybe they do one annual audit. So they're

doing one a year and then they're receiving these items

from the DCs and there's missed shipments. And as time goes on,

these, you know, point five seven percent of missed

shipments continues three or four or five deliveries per week

and that continues to that's distortion on that end. And then

at the same time, they're staffed, and you don't know

exactly what is going out the door, you get the doorbell

effect, but you don't know what's going out the door. So

there's also distortion on what's exiting the store. So

you've got your POS as guidance, your T log transactions, but you

can see how easily over you know, a very short period of

time, inventory accuracy, you know, dwindles on these

categories.

Yeah

And that's where RFID is just, you know, so

powerful in terms of, you know, instead of an annual audit, now

we're doing a weekly audit, or a bi weekly audit, and depending

on the reader infrastructure, you know, the value property, I

see the slide here, you know, in terms of using the wands of

course, there's there's value props for using the handheld

wanding and cycle counting a day and using it for the Omni picks,

or using it for markdowns or using it for recalls or for

store transfers. But at the same time, if we've got an MVP, a

minimal viable product solution that includes some reader

infrastructure and the receiving area at the exits, maybe in the

bopis reserve area, and leveraging the robots for a

daily cycle count, wow, that's a lot of value beyond just the on

shelf on hands inventory, now we can can take a look at other

value props, in terms of the shrink detection, the learning,

so coming in both inbound and outbound and, you know, tracking

other more, let's say real time events. And then of course, the

right hand column, where you have a full reader

infrastructure, you know, in the back room, and the apparel pad,

or over certain sections of the front store, and at the POS

checkout lanes, you know, now, there's a significantly more

value prop. Now again, you talk more about, you know, being able

to have a breadcrumb trail of how items traveled through the

store or out of the store. So there's a lot of interesting

insights, you know, that can that can be gained.

This, this particular slide and the one

that follows it, I think is going to be a very interesting

transition point for both Zebra and the retailers that are out

there. Because if you want to get started quickly, from a

retailer point of view, the simplest way to do that is a

wand, an application, potentially a printer for in

store tagging kind of purposes and you're off to the races.

You're doing RFID, you're delivering the the necessary

technology to be able to live this a tag, a reader, a

software, infrastructure, pretty simple to get started. Now that

you've done that, and you're doing this on either a weekly

basis, or every other week basis, or some retailers do it

once a month, you're only as valid as the last one that you

did, right as last cycle count that you did. And so, so part of

this is okay, oh, I really like what I saw, which is ability to

see things leaving the store not getting paid for. Well, guess

what, you don't get that with a handheld unless you have

somebody standing there wanding as people leave, it's not

feasible to do that. So this to me is a very interesting chart

because it gives you an opportunity of where are you on

the hierarchy from a retailer point of view of what you want

to get done. And obviously, even if you buy the handhelds, Paul,

you're not going to get rid of them just because you start to

move to an MVP or autonomous or fixed infrastructure, you're

still gonna use them. They're not throwaway. So it's not a bad

place to start. But unfortunately, things like

shrink reporting and asset tracking and electronic proof of

delivery that requires a basically some kind of at least

minimal fixed infrastructure. And this is the chart that

probably Zebra shows a lot of times but people get, you know,

get a little bit overwhelmed with it. Tell me about some of

the stuff that's that's available for for retailers from

a from an infrastructure standpoint.

So yeah, in terms of the reader infrastructure,

you know, everything, jeez, 5, 6, 7 years ago, the solutions

were really erector set the reader structure was and we

still do offer a reader and then we've got, you know, a hundred

different antennas that can be connected to a fixed reader. But

at the same time, we've introduced a number of

application specific readers or reader more of reader

structures. So we've been very active in the retail segment,

where we've introduced reader structures, you know, for

retail, so cosmetically, not something, you know, that was

made, you know, maybe initially used in the warehouse. But in

the back room for receiving, you know, in addition to portals or

pedestals that can be utilized in the back room, we are now

offering conveyor so it's a conveyor with a reader system

inside so that we can read when the cartons are, you know, put

onto the conveyor. We can read all the items inside, you know,

and then allows us to reconcile with what was expected. And then

at the exits, we've got again, and we're very sensitive to

retailers wanting it to be cosmetically, let's say at least

neutral or attractive. So we've got overhead reader systems that

are meant specifically for the retail, you know, customer

client exits and for even like fire doors, or, you know, for

employee exits as well. So, and again, you can see the Omni

kiosk where we've got a kiosk with some antennas that are

specifically like for focus reserve areas. And at checkout,

we have a number of different solutions for checkout where

we've taken basically the barcode scanner and we've

integrated an RFID reader right into the barcode scanner for

checkout. So doesn't necessarily mean that everything is gonna be

RFID you know, where you're reading the tags, and you're not

utilizing the barcode scanner. That's obviously why we built it

in. So it can be a combination, which even today with the

modern, you know, self checkouts now it's a camera based system

with, you know, with RFID, as well. So a lot of different

reader infrastructure solutions that are purposefully designed a

for retail, but for specific, you know, use cases within

retail like so yeah

So, so quick question regarding checkout.

When you see checkout are you just saying RFID readers at

checkout or are you thinking about the seamless checkout

experiences that we've seen at like, Amazon Go, etc. When you

say checkout here, maybe clarify which one those are?

It's actually both Mike. So we're working with

clients today that are leveraging, you know, a checkout

or self checkout where they're scanning, where they're barcode

scanning, but at the same time, leveraging, you know, RFID

technology to read those tags as well. And with some of the our

clients, I would say, it's more in the trend phase, there aren't

a significant amount of installations out there yet. But

we are literally working with clients as part of kind of the

Go store concept where it's hands off, frictionless. Our

items are in the cart or our items are a basket is placed in

a particular area where they're leveraging multiple technologies

and one of the technologies is certainly RFID because they're,

they want to gain insight. And with the trend, you know,

unfortunately, of theft being two x what it was, you know,

they're really the trend is how can we identify the or potential

theft before it takes place? Can we audit the basket you know,

before it that order was closed out? Whether that's checkout,

self checkout, you know RFID is playing a role in that in a lot

of pilots as we speak.

Got it, awesome, very helpful. Just as a as a

background they all you also have a number of, oh so sorry,

you also have a really good portfolio. I'm just going to

kind of stop because because there's some stuff in here that

I didn't even know that you offered specifically in some of

the application specific readers so I think everybody knows about

tags and readers and you know some of that kind of stuff but

but but this is a not that not to not to promote Zebra but I'm

going to for a second. You have a large portfolio depending on

the business need of both tags and readers and applications as

you said before, etc. This is a little almost overwhelming if

I'm a retailer, how do I know where to get started?

Well call me, first off.

But we do. You're right. I mean, specifically, you

There you go

know for retail. It is it is you know in terms of the RFID

technology, there's a lot of growth sectors, but retail has

been growing significantly. And we tried to tailor our product

line, our solutions, you know, toward retail. So we've expanded

quite a bit. But as you can see, toward the bottom right, we've

got some very, you know, specific use cases in terms of

Omni pick tables, you know, those tunnels, the portals. They

were originally designed for the warehouse, but we've adopted

them into the stores, especially the back of the stores. And

we've also adopted specifically for retails retail over the

sales floor or in the back room more of a grid system so that we

can provide the real RTLS basically the the pin on a map

type of solution for the clients where they want, you know, that

value add, and they've got those additional value streams. So

we've grown our business quite significantly in the stores and

in the warehouses in terms of our product offering. And also,

again, I just want to mention that we have a number of in

terms of our software stack, we we offer software solutions that

are in retail in terms of task management, or in terms of

leveraging the big data lakes of prescriptive analytics, and

middleware, specifically RFID middleware, because when you're

used to barcode scanning, your system is used to barcode

scanning, you get the UPC. Now when you take in those RFID

reads, you're getting that SG 10, that serialized G 10, which

is the UPC plus the serial number. So retailers are getting

started, they need some middleware that can ingest the

RFID data and interpret that into UPCs and counts. And we've

got a starting point with a repository where we do some

smoothing and filtering. But we've got partners that really

focus within the retail world, um, in terms of inventory and

omni picks and others that have got, you know, great software

solutions that they offer. So hardware stack, software stack,

and rounded out, you know, with services, but it's like the

other Zebra products that retailers are buying, you know,

there's maintenance and support that our partners offer a break

fix. It's all part of most retailers current ecosystems on

the IT side.

Awesome. Well, Paul, as usual, I have about four more

questions left, and then we got about five more minutes left. So

you've done such a great job of laying all these out. We didn't

get to everything, but but that's okay. For the for the

folks who are attending, I just want you to know, I'm going to

open it up for any live questions that you may have. So

if you just want to raise your hand, and we'll have Matt unmute

you, and you can ask your question. But as we're and we

may not have any questions because I've had I've asked,

asked several of them as we've gone through here and appreciate

you guys participating with questions. As we're waiting for

potential questions, Paul, just a quick one for you, which is,

what's next? What did I miss? What what is what should I have

asked you that I didn't ask you? What do you see the trends going

in terms of the future of leveraging this technology

through a retail supply chain?

Well, first, I would say that there is, you

know, there's a lot of value add in terms of starting with the

stores and most retailers in terms of leveraging RFID they

start with the stores because of that inventory distortion that

they're seeing in the stores, but going upstream into the

warehouses, you know, there are the more advanced retailers who

have been leveraging RFID who have kind of are on their

journey are going back streaming into the distribution centers

because there's distortion in the distribution centers as

well, right, in terms of what's being received by the suppliers

and auditing what's being received by the suppliers and

correcting those shipments that are going out whether it's

missed picks or whether it's because the suppliers carton is

was a miss shipment is catching that on the back end. So the

inbound and outbound of the warehouses is you know, where

many of the more advanced or I'll say experienced RFID

retailers are going so that's one piece of it. I would say

comment on and then the other piece I think we spoke about it

but it's worth just repeating that most retailers journey,

virtually all, start with leveraging handheld RFID sleds

to just gain the fundamental inventory accuracy on their

shelves and cycle counting the front of the store and the back

room and getting started with a, you know, gamified, you know,

application that makes it not so mundane, right, that's got some

gamification to that at least it provides some level of interest

from the associate because that store execution, the execution

at the store level is key when it comes to the handheld cycle

counting. So it's getting started and the entry at a low

total cost of ownership is key to starting your journey.

Awesome, perfect. I think the only other thing that

I would mention is, to me, what's interesting is in 2003 to

5, the RFID initiative started with the retail supply chain.

From a manufacturer, to a distribution center, to another

distribution center, to a back of a store, to the sales floor,

etc. And what's interesting is what we recognized pretty

quickly was the inventory accuracy at the store level

became the higher priority and so people kind of shifted that

way. But what's interesting, what's interesting now is what

now are now that everything is people are taking advantage of

this technology of the store, starting to look through back up

the supply chain, with with you know, opportunities of

eliminating claims, eliminating, you know, hey, I sent you this

well I didn't get it, but I sent it to you. That could all go

away because we now know with leveraging this technology, and

obviously others, that you can actually have some kind of a

checks and balances about what actually got shipped and what

actually got received, rather than just debating saying I

didn't get something or I did get something. So I think I

think that is actually going to be a big part of the future that

we're gonna see with that. And, and obviously, there was a lot

of work done at Auburn University regarding the chain

integration pilot, where we talked a little bit about, you

know, the opportunity for claims and chargebacks, etc. This is

continuing to be researched primarily by GS 1. But to me,

those are big numbers on there about counterfeiting and claims

and chargebacks and shrink, which is one of the things we

just talked about. But it's interesting that counterfeiting

and claims are actually higher than some of the shrink numbers

that are currently being getting shared there so. Paul thank you

very, very much anything in closing you'd like to share with

the audience.

No, my pleasure, Mike. Thanks. Thanks for having

me on, I appreciate it.

Awesome. There you go. Well, thank you very much,

everybody. Have a great rest of your day. And Paul, again, thank

you so much for agreeing to spend some time with us and

talked about what Zebra is providing from a leadership

standpoint in the retail industry. Thank you. Well, I

hope you found that podcast helpful. Again, my thanks to

Paul Baboian for spending some time with us for the last two

podcasts, talking about RFID at retail and specifically some of

the solutions that are available for Zebra Technologies.