Host Mike Graen continues Season 3 of the Supply Chain LEAD Podcast by finishing up his conversation with Emil Martinez - Managing Partner Retail GTM NA at Tata Consultancy Services - to discuss the state of the industry. In this Part 2 episode, Mike and Emil discuss topics including:

• OSA's impact on shopping experience
• Leveraging OSA technology
• Retail technology evolution & industry planning

Welcome back to the Walton Supply Chain Center

focusing on on shelf availability. My name is Mike

Graen, we pick up and finished part two of our discussion with

Emil Martinez, who is the General Manager of TCS

Consulting, talking about all things retail, as it affects

2024. Join us and as we get started favorite quotes, I think

he will you came up with this, maybe we came up with it

together. But a number by itself is meaningless, unless you

compare it to something. So somebody says I'm 15%, higher

than I was, I'm 15%. Increase.

What I don't know if that's good or bad, right? So this compares

I target which is 95%, to how you're doing. Now, how in the

world, do you get these numbers? Because I just said you can't

use your internal systems, which is, how much do I have versus

how much I'll sell? There's a couple different ways to do

that. One is algorithms. And I'll cover these really briefly,

Matt, because I think the purpose of the day is really to

cover this in more detail. But I got an item to sell in 1216 1515

1211 said it goes to zero, or two items that go to zero. I

can't tell you anything, but I can almost predict that product

is no longer available on the sale. Okay, it's not on a shelf,

because you don't go from selling that many to zero,

unless there's a some kind of seasonality thing. So algorithms

are a good way. And obviously, you send retail coverage like an

Acosta or Crossmark, or advantage in to look at that

they go yep, it didn't, it's, it's not on the shelf anymore, I

put it back on the shelf. And then you measure this thing,

which is after they made that intervention, we are now

measuring what's called recovered sales, which is I took

an action, I got it back on the shelf, it took off again, those

algorithms can actually measure on shelf availability for you

every single day. Secondly, is there's companies out there,

this happens to be one called field agent. But there's going

to be companies out there that we will talk about here in a

second that will do in store audits, they will literally take

customers, shoppers, or who will go in stores and collect

information in the store that can help you to say, is it on

the shelf? Or is it just in stock, which means probably it's

in the background. This is one of the projects that amo and I

are working on. This is a badger robot. This is a robot that

literally goes in the store undocks and autonomously goes

and scans a shelf, you see it turn the light on. And it's

basically scanning a shelf and telling you what's available,

what's not available. What are the auto stocks, what are the

incorrect items? What are the pricing issues. So shelf

scanning robots play a big role.

RFID clearly plays a big role. It literally allows you to count

things extremely quickly, and be able to tell you exactly what

you have on the sales floor for a customer.

Other people use this, this happens to be an example from an

online shopper that this young lady is actually purchasing

customer's product for our customer. If they find it, they

scan the item. If they don't, they scan the label and go no

pick, I don't have. And the last one I want to share is is fixed

cameras. Alright, so fixed cameras, shelf edge cameras that

do that. So just to set up that the day that we're going to have

here today, we've got a bunch of people, we've got two companies.

One is called bops and one's called retail insight that

really have a specialized capability to do forecasting,

and to do algorithmic kinds of of opportunities, especially if

you have a high velocity items. These are items that you

definitely need in your toolbox.

For things that are more situational trax retail is going

to be sharing later on how their trax system actually shows the

ability to be able to see what's in the shelf using their trax

platform, which is an in store data capture. We've actually got

the top three in my opinion, folks who are doing shelf

scanning robots, Badger, Brain and Simbe are all going to be on

later on today, talking about their solution and being able to

provide you updates on how their solution can work. We've got

Williot and Carcoding that are both experts in the low

frequency and high frequency RFID space. That definitely

would be great contacts for you if you're interested in more

about RFID.

At the date of this recording, we do have SCS and Magnatech

also going to be doing fixed cameras. Now, just to be clear,

and be transparent. We're recording this in December. Some

of the folks that we just put on the screen with with some of the

providers may change or we may add some folks too. So don't be

surprised if that doesn't match up with the rest of the agenda.

But for right now, Matt, these are the ones that we've got for

the rest of the day and it's gonna be exciting to have them

be part of this conference.

Yeah. So excited to have so many of them solution

providers stepping up to sort of sort of share their story

talking about their capabilities. Emil back to you

give us a little bit more insight into why product

availability is so important right now in the retail industry

from your own perspective.

So from my perspective, and you know,

having been around the industry this long, you know, for those

of you that have been in the industry or in the industry, you

fall into this pattern, everything becomes, you know, a

new experience and observation, you walk into a store, you shop

online, you sort of gain this perspective, you're part

industry, participant and part your consumer. Yeah, so you're

sort of shaped by your experiences, but in my mind, it

falls into three buckets, it's critically important to the

shopping experience. So you know, each of us I think, as we

embrace, you know, our purchase behavior, we have a

consideration set for each of our areas, there's a set of

retailers who when we have a specific need, we look to 123,

maybe it's four or five at the at the max, you know, that we

see as the predominant solution set for whatever that problem

is, or that opportunity is we're looking for, you know, so making

sure that shopping experience is easy, clean, you know, capable

is affected by whether the product is in stock and

available. At the end of the day, the shopping experience a

disappointment, like go to one of my key consideration sets,

and they don't have that product available. For me, it's now

complicated my experience. The second piece is perception. You

know, if it happens enough times, I likely changed my

consideration set. You know, as Mike showed the slide that the

dog uses to chose retailers over the course of time, you know,

there's a reason that evolution occurred. And that occurred,

because over the course of time, shoppers, perception changed,

about who their consideration set was, and where they were

going to spend their dollars, you know, so in my mind, if

you're not on shelf and available, you are changing the

perception of the shopper, because I can no longer fulfill

my needs, simply and easily from that perspective. The second

piece is, you know, it drives the future thought process. So

if I'm a retailer, and I want to be on that 2030 to 2040, you

know, decade of who the top shoppers are on shelf

availability, in my mind, whether that's physical or

digital, you're the fusion of the two, which I obviously is

where we are some some folks call it digital, you know,

fusing the two words together, at the end of the day, the

synchronization of that thought process is the difference maker,

at least one that's within your control, to put you in a

position to be on that list of retailers that are excelling,

you know, in the next decade, and the decade after that, the

moment you lose that point of contact with the consumer, you

lose start to lose the consumer, Doug referred to it as you're

done. You know, let's let's take that done. And you know, connote

what that really means. What that really means is, me as the

consumer, us, the consumer, the shopper stopped going to that

store to fulfill your needs, and you go somewhere else, to

fulfill those needs. That's the death knell for any retailer,

whether they're physical or digital. When the shopper now

considers you irrelevant, you're out of the game. On shelf

availability, the availability of product for purchase and for

fulfillment or consumption is the game. It's that zero moment

moment of truth, whether you want to think of that from a

marketing perspective, or from a fulfillment perspective. At the

end of the day, that zero moment of truth is the game. If you're

in stock, you've now fulfilled an opportunity for a shop or if

you're out of stock, you've now disappointed them and made them

go somewhere else.

As we wrap up this conversation and invite

folks to go and check out some of the capabilities

presentations from some of the companies that you've mentioned,

that are partnering with us in the Solution Summit. Mike offers

some closing thoughts, in particular, why you're so

optimistic about the future with respect to on shelf

availability? Yes. It's something that the industry has

been wrestling with for a very long time. But there is so much

innovation right now. And it seems like there's a willingness

on the part of retailers to to invest in that innovation. So

talk a little bit about your optimism as you offer some

closing thoughts and then able ask you to do the same thing.

Yeah, I think there's a couple of things,

Matt, the first thing is, there was a there was a perception a

while back, that brick and mortar is dead, we're never

going to have brick and mortar, it's all going to be delivered

in the Amazon truck. And it couldn't be farther from the

truth right? There will always be this combination of omni

channel online retailer only plays like Amazon today, but

they're getting what's interesting is they're opening

the store. So I think they understand that there's a

correlation between the actual shopper doesn't want to wait

days or two days to show up at the door. They want to be able

to get what they want when they want it. So brick and mortar is

not dead is clearly very, very important.

Number two, we've mentioned a lot of things about on shelf

availability, let's just be really clear, you still have to

have the right items, the right is sorban. It has to be priced

correctly, it has to be able to you know, as Walmart, you know,

saving people money so they can live better. And they're

actually adding the to saving people, time and money. That's

the whole line pick up in store and actually delivered to your

home, etc. The retailers who are continuing to reinvent the way

they can take care of their customers are going to win in

the long run. So from my perspective, that's huge. It's

not the Alonzo football is not the only factor by any stretch

of the imagination, but it is an important one. Because if you

consistently disappoint your customers, after the third time

to go after that printer cartridge in the store, then you

don't have it, forget it, I'm buying it online, and I'm not

ever gonna go back to that store to look for those things. Again,

it is an absolutely important thing. From my perspective.

Number two, I think the other big piece of this is in a

retailer, like an apparel company, a gap, Adidas 100%

apparel kind of companies, you got to really benefit here

because technology, like RFID can be a single sensor or a

signal said signal that can tell you whether you're available or

not available, etc. The challenging environments are the

Walmarts. And the cost goes in the Sam's Club, because I've got

some products that really lend themselves very nice to things

like RFID, apparel, and general merchandise and sporting goods.

I've also got food products, lettuce, and watermelons and

canned vegetables, etc. So for those solution providers, or

those retailers, the challenge becomes, I gotta have a multi

sensor solution. It's got to be computer vision, AI, RFID, 2d

barcodes, a whole bunch of stuff working together to be able to

answer the same question. It's more, for sure. But it's really

based upon the categories that you've got. So the last thing

I'll tell you is we've done a lot of work already historical

work, if you're interested, we've piqued your interest,

obviously, you're invested in today to find out what the

solution providers out there, go call them up, contacted them,

they all have some great solutions, you know, the you'll

have to figure out for yourself, which one's the right one for

your business model. But there's a lot of great content that's

already out there on conversations on real retail,

and you have a on shelf availability platform, on

shuffle, www.on, shelf availability.com, there's free

resources out there, we definitely encourage you to take

advantage of those tools in addition to the virtual summit

that you're having for today.

Emil, any closing thoughts from you?

So I don't know how I follow that Mike, just

traverse the universe there with that with his closing comments.

But you know, I think at the end of the day, you know, there's

really three things that I would, you know, make folks stay

mindful of. One is that data is at the center of all of this,

that, you know, when when you really think about assembling

what Mike just described, you know, that intersection of many

different technologies working together, you know, it becomes

sort of a supply chain of data. You know, it's how you bring

these data sources together to fuel common business practice,

right? At the end of the day, you know, 30 years ago, I coined

the phrase, when I was in a prior life, you know, the data

without action is overhead, right? At the end of the day,

we're collecting all this information for a specific

reason, because it enables us to do things more efficiently, in a

in a more complete, you know, and correct fashion. So data is

at the center of all of this. The second piece is, you know,

as we think about the intersection of physical and

digital and this sort of supply chain of data, you know, we're

sources of inflection points that Mike described in his

closing comments, you know, we need to think about how new

technology becomes a piece of this puzzle. So things like AI,

you know, enabling these things to be done in an in a fused

fashion. So this isn't about taking people out of the

process. It's about making people better, right? None of

us, you know, if we went back 100 years ago, when they, they,

you know, they started enabling large physical equipment to dig

holes. were complaining that it was displacing people from

digging the holes, we were celebrating the back, we could

dig the holes faster, right? It made the human condition better.

So the fusion of AI and these technologies with what we do

make us all better. So we need to work to combine those pieces

of the puzzle. Yeah, and the last piece of the puzzle to me

is to embrace the change. You know, at the end of the day, you

know, the retailers who and the CPG firms who say to themselves,

the consumer is shifting, I'm going to move without the ball

to where they need me to be, you know, kind of to use a sports

analogy, you move without the ball, you'd be in a position to

score, those who move without the ball to where the consumers

are going to be and meet them where they're going. Those are

going to win whether they're CPG firms or retailers

So at the end of the day, it's leverage data, it's infuse the

technology with the people, you know, we're never going to

replace the art portion of this with full science, where we can

augment it with the technology and the science. And the third

piece of the puzzle is, you know, embrace the change. You

know, at the end of the day, you know, we've got no choice, we

can complain about the change, we can lament about the change.

Yeah, but at the end of the day change is what makes us better.

It's what makes progression, you know, in the industry happen,

you know, many folks would have screamed and yelled about, you

know, scanners before they were here. And unfortunately, or

fortunately, I'm old enough to remember when there weren't

scanners and every single one of the stores, who would not who

would want to go to a grocery store today or to any retail

store without scanners. Right? It makes us better. So all I

would leave the audience with is when we think about on shelf

availability, think about where we can go with this, think about

where the future this value proposition is, and what that

opportunity to aren't with you, whether you're a CPG firm or a

supplier, or whether you're a retailer or potentially someone

servicing them, like a, you know, a sales agency, the end of

the day, this change offers new opportunity. And I've suggested

everyone should embrace it, because it's coming, whether we

like it or not.

Emil, just one more thing, that beautiful summary of

where we are. I'll tell you the one thing and what's interesting

is he just mentioned the scanner mountain, you know, I've talked

about this before the UPC, as we know, it just celebrated its

30th year anniversary. Again, it was originally I'm tired of

pricing every single thing, I'll just put a UPC on it and scan

it. It's actually celebrating its 30th year and in 2027, there

will be new capability that will eventually eliminated it will go

by the wayside too, right. It's called the Chidi barcode. And

you can think about that as kind of like a QR code, the ability

to store other information other than the item number, the

specific manufacturer item number, you can set you can sort

What was that product dated, when exactly was that product

made available to the customer, potentially serializing it so

you've got two TVs you can say one is different than the other

one. This one's available because it's on the shelf ready

for a customer to pick up. This one that's hanging in the

ceiling as a demo is not available. There's the same UPC

but you can distinguish two available not the 2d barcode

look up sunset sunrise 2027 by Gs one. It's a game changer

because that's where the industry is going. And there's

going to be a lot of potential use cases for for basically

eliminating something that's been around for 30 years, it's

going to get replaced, and it's going to get better and it's

going to take time to get there. But these things will continue

to evolve and more and more data to Emil's point will be a key

unlock for a lot of retailers.

Yeah, Mike, I'm not sure if I'm off of mute at

the moment.

Matt, if you can hear me take me off mute for a moment.

You're not me if you have.

Not on mute. Okay, sorry. I'd have a little

mute button up there on the screen in front of me. Sorry

about that. So the you know, one of the things that I think is

interesting about your comment and about everything we've been

talking about is there's a book of a million years ago that was

published that I read when I was earlier in my career, I think it

was called the discipline of market leaders. And the only

quote I remember from it is that the company that doesn't plan

for its own demise will experience it. And I think what

we've been talking about here is planning for the industry. In

that similar fashion. You're not planning for your demise, this

isn't a negative thing. It's a taking advantage of growth and

progression and opportunity. And your example of the barcode is a

great example. It's not that anyone is disappointed in the

barcode, it's that we can do better. There are new

opportunities for us to embrace and we need to embrace them. And

yeah, at the end of the day, we should plan for our own demise.

But in a positive fashion. We're looking at a sunrise to these

opportunities, not a sunset, to the pieces we're leaving behind

we're building aren't Nielson used to say that we all we all

we all stand on the shoulders of those who came before us. So the

2d barcode stands on the shoulders of the of the barcode

that came before it. And of the people who used to be the

checkers in the old movies we watch and, you know, and so on,

so forth. And at the end of the day, we're all better off for it.

Well, thank you for joining that conversation with

Emil Martinez. I hope you got a lot out of the content of that

material. Join us next time as we welcome back to the podcast a

good friend by the name of Myron Burke. Myron has spent his

career in retail and technology. He is the current CEO of

Divergent Technology. And we're going to be focusing our efforts

on talking about all things which is serialized item

information. What is that you ask? We're gonna find out next

time. Please come back and join us. Take care!