June 10, 2025 • 35 mins
Ever wonder why your size is never on the rack when the website says "in stock"? That frustrating disconnect between what retailers think they have versus what's actually available has plagued the industry for decades—until RFID technology changed everything.
In this revealing conversation with retail veteran Mike Graen, we explore how a single technology implementation transformed Walmart's apparel business and set new standards across the retail landscape.
With 42 years of experience spanning Procter & Gamble, Walmart, and consulting roles, Mike provides a masterclass in how technology adoption must be driven by customer needs, not the other way around.
The journey began when Walmart's apparel department faced exclusion from the company's growing curbside pickup services due to notoriously inaccurate inventory. With inventory accuracy hovering around 60% (meaning 4 out of 10 items shown as available actually weren't), the customer experience was suffering.
When RFID was finally implemented, it revealed actual inventory was 30% lower than shown in systems—a sobering reality check that ultimately led to better customer experiences and increased sales.
What makes this story particularly valuable is how it demonstrates the critical importance of cross-functional leadership. This wasn't just a technology project—it was a change management initiative requiring buy-in from merchandising, store operations, IT, and suppliers. The implementation transformed not just inventory accuracy but how teams worked together across traditional organizational boundaries.
Looking ahead, Mike shares exciting possibilities for retail technology: truly frictionless checkout experiences, AI-powered inventory management, and a future where store associates are freed from data collection tasks to focus entirely on customer service.
Whether you're a retail professional, technology enthusiast, or curious consumer, this episode offers valuable insights into how businesses can successfully navigate technological transformation.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:07):
Well, hello everyone, I'm Deanna Baker and welcome to
Doing Business in Bentonville.
We have an exciting topic todaywith one of my long-term
friends in the business world,michael Grain, mike.
And let me just give you alittle background on Mike and
then I'm going to kick it overto him.
But Mike has a rich 42-yearcareer and it's from both sides
(00:31):
of the aisle, so both supplierand retailer.
He worked for almost 30 yearsfor Procter Gamble, right 25.
And then on to Walmart, sodefinitely switched to the
retailer side for a period oftime, as well as Crossmark and
Collaboration LLC, right andconsulting.
So all of his talent has beenfocused on collaboration to help
(00:55):
deliver sales to the retailsupply chain and he has linked
suppliers and retailers throughall of these journeys together
by leveraging informationtechnology and data to increase
sales and profitability.
So, mike, we're really happy tohave you here.
I wanted you to be a guest onDoing Business in Bentonville
(01:16):
with me because of our journeyand how I came to know you and
what an asset you were to medoing what you do best, came to
know you and what an asset youwere to me doing what you do
best, and so today we're goingto revisit how we were connected
through the RFI journey atWalmart, but then take it beyond
that to everything else that wehear about happening.
What's on the forefront, why weshould care, depending on
(01:41):
whichever discipline you're in,and maybe we can show others
kind of the way collaborationcan work.
Speaker 2 (01:49):
Indeed Awesome.
Speaker 1 (01:50):
So let's go back to that day.
Speaker 2 (01:52):
Sure Well, first off, thank you very much for the
opportunity to be here.
It has been fun to work withyou.
It's been fun to work with yourteam when you were at Walmart.
We went through quite aturbulent time of trying to
figure out what the right thingto do for the shopper was.
I feel like we landed in a verygood spot and set up a very
good platform for all retailersto participate, so I really
(02:14):
appreciate the opportunity tocome and spend some time with
you today.
Speaker 1 (02:17):
Fabulous, fabulous.
So RFID I didn't know what theacronym stood for.
I didn't know that it was about2018.
And I was the SVP in apparel,leading the team there, and I
was faced with a dilemma as aleader of my team in that,
(02:40):
globally, I knew where ourcompany was headed.
I knew that curbside deliveryat the time was what everyone
was working on and we were stillin two apps.
We had an app just for grocerypickup and then we had we called
it the green app and then wehad a blue app which was for all
things, general merchandise.
But all of my counterparts werebusy figuring out how to get
(03:01):
included in this curbsidedelivery and it was obvious that
the customer was migratingthere and apparel was completely
left out of the conversation.
And I knew why.
I mean, it wasn't that it wasunfair.
It was a real simple reason inthat the inventory was not
accurate and we knew it wasinflated on paper, was not
(03:29):
accurate and we knew it wasinflated on paper.
But in order to be confidentthat they could pick an order
for a customer and deliver it,they need to know that the down
to the skew level, which ispretty intensive in apparel, had
to be there, and you know, onesolution was, well, carry more
inventory.
Well, anyone that knowsanything about apparel, if you
do size and color combination,one program can be 60 different
(03:51):
SKUs, right?
And so that was not a solutionfor us.
So I knew I had an issue if Iwanted to be part of the box,
right?
So we started this journey toeducate ourselves on what was
feasible and what maybe some ofthe solutions were, and that led
our team to you, right, and Iwould just love to get your
(04:15):
thoughts, being on the oppositeside of the table from us and
what you saw.
Speaker 2 (04:20):
Yeah, yeah.
Well, I think the first andforemost, the most important
part is this is not the firsttime that we tried an RFID
strategy, right, and I think alot of retailers out there were
also involved with that.
You know, prior to the 2018,2019 time period.
(04:40):
Literally since World War II,I've been along for a long, long
time, really.
It came to retail actually whenI was still with Procter Gamble
, if you remember, linda Dillmanand Pam Cohn from Walmart
really tried to drive what's thenext level of engagement with
suppliers and Walmart.
It was RFID, particularly atthe case of Palo Alto, right,
(05:03):
can we track product all the wayout through the supply chain?
And at the time it was.
Let's start out real small witha small prototype, and let's
back all the way up and see ifcan we get the next 50 suppliers
or 100 suppliers, and what wefound quickly was, yes, we could
do that.
The technology was still prettyexpensive.
(05:23):
I mean, tag costs were abovethe 27 mark.
That made it prohibitive to doanything below case and pallet,
and so we put that on the shelfand we did a couple of other
iterations as well.
What happened in 2018, I think,was a perfect storm.
It was literally the costs hadcome down, the technology had
(05:43):
become better.
The cost had come down, thetechnology had become better.
And this age-old problem ofwhat do I have in the box and
where is it located?
Specific enough I could send anassociate or a customer to go
find it was extremely difficult.
We're talking about we call aterm perfect match.
Perfect match is if theaudience says I have five and I
actually have five.
(06:04):
That's a perfect match.
We found that to be literallyin the 50 to 70% range, 60%
range.
So pretty bad right.
When you're looking for aspecific color shirt or a
specific size of a garment, wecan't have that level of
accuracy and have our associatesgo chasing that.
(06:26):
So I was working I'd beenworking with Walmart for a while
at RFID.
We had stood up a prototype ina local store, which is
infrastructure.
That was technically a ragingsuccess.
So we now knew the technicalbenefits were down.
Now the question was could wecreate a business case?
I thought why to do that andthat really let in.
(06:47):
It was a perfect storm in termsof in a good way, in terms of
you and your team trying tofigure out how do I get into
this online space, this buyonline.
Pick up in store space, whichis what it's called today, and
the big barrier being I got toknow what I have and where it's
located.
Otherwise, I'll be sendingpeople to chase things that are
not in the store.
So it was a very goodopportunity to work together.
Speaker 1 (07:12):
Well, you talk about the perfect storm.
I mean, I had to reach thepoint as a leader of my team
where my desire to be a part ofthe emerging infrastructure of
Walmart was worth myuncomfortable feeling in the
space where I knew nothing.
But I had to find out becausethe other thing that I knew was
(07:32):
true beyond that our inventorywas off was that others were
ahead of us competitors.
So I had seen it Lululemon.
I mean, they were reallyprobably at that moment in my
mind, the most efficient in theuse of it.
But I saw the tags in Targetand Macy's had talked about it
years ahead.
So we were behind.
(07:53):
And I think one of the bigthings that made me say, okay,
maybe now is the time wasoriginally, I remember the cost
of the ticket being like 25cents or something crazy, and,
of course, when you have openingprice point items, it just
mathematically didn't make anysense.
But now they're telling me well, it was about five or six cents
(08:14):
at the time.
So I'm like, okay, all right,it's actually possible for me to
play in this arena now.
So it was my quest to have myteam a part of where Walmart was
moving that pushed me out of mycomfort zone to do this and I
remember one of the first thingsthat we did is we went down to
(08:34):
the Auburn University lab.
They have everything set up toexplain RFID and my team there
learned not just the technologybut how tickets were made and a
lot of the infrastructurechoices that were available at
the time, which you know wecould do it as simplistic, fast
and inexpensive if we wanted touse a handheld device, or it
(08:58):
could be seamless with, you know, infrastructure inside the
store, which obviously was goingto cost a lot more money and
time to get approvals.
So we left there really with amission to take it back to the
leadership of Walmart to saythis is worth our investment of
time and money.
And they gave us the greenlight and so from that point on
(09:22):
it was kind of like opening aPandora's box and I'm like, oh
my, there's a lot more to thisthan I ever imagined.
And so you know it took a teamof people cross-functionally in
Walmart and we had to have skinin the game from people not just
merchandising any longer, butliterally within IT who was
(09:43):
going to develop the toolswithin store operations, who was
going to create the processesfor our store associates, to
follow and train them, and thenmy first goal was bringing all
the suppliers on board because,guess what?
We had to reticket everything.
So that took us about a year,and so I think one of the
(10:04):
lessons I've learned as a leaderis just the passion you have to
have around a solution for thecustomer, because it may take
not you but maybe the personthat comes behind you even to
see something through because ofthe length of time it takes.
Fortunately, I was able to seethis one through.
We had a little thing calledCOVID that was in the middle of
(10:24):
it, which added a wrinkle, butit was a journey for us that we
had to learn along the way.
No one could give me youcouldn't give me the full
blueprint.
Speaker 2 (10:35):
Right.
Speaker 1 (10:36):
Right for how it was going to play out at Walmart, so
that was probably my mother.
My other big learning in thisis that I couldn't let fear of
the unknown stop me fromstarting the process.
You know, I knew where I wantedto go.
I just didn't exactly know theway to get there, but I
(10:57):
surrounded myself with peoplewho knew more about it than I
did.
Speaker 2 (10:59):
Well, but I think in retrospect, one of the things
that I can remember vividly onthat is it was very clear from
my perspective.
There was a group of facts thatyou knew really solidly, things
like we want to be part of thisonline process going forward.
That's going to be one of thebig strategies for us being
successful in the apparel slashfashion business.
(11:22):
Number two, that just because Iknew some things about this
technology from past experiencesdidn't mean that that
necessarily translated intowhere it was today.
So you gave yourself theopportunity to say I know what
it was when I was there before,but I wonder what it is now.
And you asked yourself thosequestions versus oh, that'll
(11:43):
never work because it's tooexpensive or it doesn't work or
whatever the rationale was.
And the third thing is you werevery clear in terms of what your
role was.
Your role was merchandising,senior leadership and engagement
with the suppliers, becausewithout tag product it doesn't
happen.
It can happen in a small proofof concept or a pilot in the
(12:06):
store, but in terms of gettingbroad adoption across the
industry and using it for otherthings, it's got to happen to
start at source, and that'swhere that supplier sourcing
started.
So working through thosechallenges and knowing what you
do and then recognizing hey,there's a lot of stuff I don't
know.
I need operators, I need ITfolks, I need supply chain, I
need industry experts like GS1and Auburn to come alongside me
(12:28):
to be able to do this, and Ithink it was a really good case
example where you physically ledthis work from a business
standpoint, but you delegatedthose the parts that you needed
more help with to other peoplein the company.
Speaker 1 (12:42):
Absolutely, and it was.
It was their buy-in as wellthat allowed it to happen.
So you just think about the theall of the associates across
4,000 stores for the apparelfloor to work differently and to
have to learn the newtechnology.
So my store operations partnerswere critical, the people that
(13:03):
helped us track whether thestore associates were picking
orders.
If they weren't, if there was anil pick, why, and helping us
really drill down to why isn'tthis being adopted more readily.
So it was a continual, evenafter everything had been turned
on and it was working well.
Then what were the otherunintended consequences or
(13:24):
things that needed to happen inorder to fully unlock the
potential of the technology?
And so it was a continuallearning.
But I am so happy to be able tosay we solved a problem for the
most skew-intensive, laboriouscategory in the box Apparel
(13:45):
right, and we proved its worthand now it's in general
merchandise correct.
Speaker 2 (13:52):
Correct, correct.
Walmart has expanded.
They've been very public aboutthis.
They've been expanded wellbeyond apparel to going in
things like home and electronics, and automotive and sporting
goods and basically anything inthe kind of general merchandise
space, and the great thing isthat I would say that there's a
lot of retailers that arefollowing quickly and doing
(14:15):
their best job to keep up andcatch up.
So I think you went from aposition where you started this
whole journey is, yeah, you'reprobably behind to a place where
you're clearly demonstratingleadership from a technology
standpoint, from a businessstandpoint.
Speaker 1 (14:30):
Well, in apparel it's interesting because it's so
fluid in how it sells.
But becoming as systematic aswe could for the way it should
function at store level was alearning that actually changed
the way my team worked.
So we had to go back and evenhow we purchase goods.
Stores are very unique thedifferent layouts, different
(14:53):
stores.
It's not prototypical, in fact.
There are no two stores exactlyalike and if you think about it
apparel or fashion fashiontoday is in the center of the
box and so there's a high degreeof variability.
And the fact that now I canlook on my app and if I'm
shopping for an item, I can knowwhich rack it's on with
(15:17):
certainty.
That took a discipline back tothe merchants and how we bought
differently and managed theinventory differently.
Speaker 2 (15:25):
Right.
Speaker 1 (15:25):
So it really created a change in work for every
discipline of the box.
Yeah, and I am sure somethingelse will come along.
Something is probably right nowthat's going to change the way
we have to.
You know our working ways again, but I'm very happy.
The team rose to the challenge.
(15:47):
The suppliers were excellentpartners for us.
Once everything was ticketedback to the supplier
conversations and it took a fullyear for us to run through all
of the inventory and get itticketed.
The onus was on Walmart tofinish creating all of the
processes and internal toolsbecause they had been paying for
(16:09):
the tickets for the better partof the year and were not seeing
any value from it Right part ofthe year and we're not seeing
any value from it.
So you know, it really was apressure back on the company to
be good stewards of what thesuppliers had invested in,
because this was to grow theirsales as well.
Right, and Mike, you told us itwas going to be like the
industry average was off about50, 60%.
(16:31):
You just quoted I recall theday it went live, for us it was
30%.
I recall the day it went livefor us it was 30%.
Yeah, 30% drop on paper fromwhat we were seeing the day
before.
And of course then we had towait for orders to normalize, to
get everything back in stockaccurately.
But there was definitely apayoff in sales for us, in sales
(17:01):
for us, not to mention, I think, what it can do for the future
of apparel in Walmart as a total.
So I'm very proud of it.
If you can't tell, I'll go onand on.
Speaker 2 (17:05):
But just to build on that, I think I mean, okay, if
it was 50, 50, 30, whatever thenumber happened to be.
What we did find was when itwas wrong.
It was usually an overstatedsituation.
So it says I have five of thesepairs of socks.
I really don't have five ofthose pairs of socks.
I don't have any of those socks.
And so to correct thatinventory, it required an RFID
(17:30):
reader to read the RFID tag, toupdate the SKU count on that
particular item.
And I'm usually saying I don'thave five, I have one or I have
zero, for example.
Well, that creates obviously ashrink opportunity inside the
store.
So how do you account for thatsituation so you don't penalize
the store for things like that?
So the whole markdown processbecame a really important part
(17:52):
of this as well, which is how doyou manage that from a
strategic level?
Because we don't want to putthe system in and immediately
the stores hate it becausethey're seeing all kinds of
markdowns, right.
Speaker 1 (18:03):
So that challenge was there as well and in addition
to just it not being therecleaning up the accuracy.
So I don't have three of this,I have two.
I don't have one, I have three.
When you come down to a racklevel and one of your fringe
sizes has a holding capacity ofone, it is.
(18:23):
You know, that was actuallysomething I hadn't thought of in
becoming more accurate, wasable to actually reduce
inventory and not miss a sale,right, right.
So it wasn't just I have it orI don't or I have zero I thought
I had five but just reallyfine-tuning the accuracy so that
we could show the customer thatwe have one left, two left,
(18:44):
three left, which to me isincredible in this space.
Speaker 2 (18:51):
Well, I think the only other thing is okay.
So we've now reflected what weactually have versus what we
thought we had, and I have threeof these SKUs sitting in the
back room.
I have none sitting on thesales floor.
Driving that replenishment fromthe back room to the sales
floor and getting the operationsteam to execute against those
alerts was a huge unlock,because I can tell you, I can
(19:13):
get your on-hands right all daylong, but if no action occurs
which changes getting product onthe sales floor for a customer
to buy it, we're not going tosell more.
So again, from my perspective,it was a clear example of it's
going to take a bunch ofdisciplines to make this happen.
No one does that.
And I think the other piece isis there's so many projects that
(19:34):
we do today which are well,let's just go do this, it's an
operations project?
This one was which are well,let's just go do this, it's an
operations project.
This one was merchandisingoperations, supply chain
technology, design, industrypeople all coming together to do
these projects.
These are not technologyprojects, they're change
management projects, and I thinkthat's what really makes them A
much more impactful but B a lotmore difficult and a lot more
(19:57):
coordination you have to do.
Speaker 1 (19:59):
Absolutely, and how you tell the story to your
organization matters.
That's another thing I learned.
So, as we're talking aboutinvestment and CapEx and all the
different components, when Iwould go in to present the case
for this, I could be in mycompany competing for money that
(20:20):
was either going to go to thisor maybe to build a milk plant.
I mean apples, oranges, both.
You know, of course, we wantedto do that.
We, you know we'd love to doboth.
But when a company is having tomake, you know, rational
decisions about where the moneygoes and be prudent with it,
(20:40):
it's important on the leader ofeach discipline to come with a
story and the reasons why, andto be compelling and hopefully
get the buy-in you need.
But that takes a lot of passionbehind it.
It's not just fact based.
But that was also a new musclethat I learned.
(21:01):
Yeah, and that well, of courseit's important.
Everyone should know it'simportant.
I mean, look around, butliterally, when you're having to
make those kinds of decisions,not everything gets a yes.
Speaker 2 (21:11):
Right.
Speaker 1 (21:12):
So that was a huge learning for me as well.
Speaker 2 (21:14):
Well, this project, I'm sure, was scrutinized a
number of different ways because, literally, we were
recommending moving into thisexactly what you just said,
which is moving into a verytumultuous time period in the
world, which was COVID, muchless the retail industry, and
there were a lot of options ofwhat do we keep doing, what do
we stop doing, et cetera, whatdo we put on hold for now, et
(21:36):
cetera, and this one fortunatelymade the cut.
It is a good thing it did,because if we would have put
that back on hold, we guaranteewe would be where we are today.
Speaker 1 (21:46):
Yes, and I think it's very evident when you see some
of the retailers today whohaven't started that journey.
Speaker 2 (21:52):
Yeah.
Speaker 1 (21:52):
And you know I said I was behind.
I felt like we were behind.
I am thankful that it was giventhe green light when it was,
but even more of a lift today,when I think now all of us as
leaders should be thinking aboutwhat the next thing is.
What else could remove frictionfor the customer?
What else could make it easierfor store associates or
(22:15):
fulfillment?
However, the customer wants thegoods to be fulfilled.
We should be thinking aboutthat.
So what do you say today, witha lot of the technology advances
that are going on around us allthe time, if you hear of
something today and you're like,well, that's not right for us
right now, what would you say tosomeone that was in my position
(22:36):
, like I had at Walmart?
Speaker 2 (22:44):
was in my position, like I had at Walmart.
Well A it could be a piece ofsolution or a piece of
technology that just isn't readyyet, and I think we experienced
that in RFID.
When we started back in call it2003 timeframe.
Did we learn a bunch?
Yes, Was it ready from a costperspective to ticket individual
selling items at the store?
Not really.
Was it effective enough yet?
So was it ready to actuallysolve the problems that we
(23:08):
wanted?
And I think you always have tothink through that and that's
why there's still a lot of proofof technology and let's go try
it in the store for a few daysand let's go try this, let's try
that.
So congratulations to thosecompanies who make those
decisions to go try that.
But sometimes it just comesback and says not ready yet,
right.
There's other things that areyeah, the technology's ready,
(23:29):
but we have fundamental businesschallenges out there right now
that we got to get to before wecan go and do this right.
So if my shelves are all empty,you know, putting a technology
like RFID and no resources toget the product out of the back
rooms and sales floor wouldn'thelp us.
So operational things you haveto have as prerequisites for
(23:50):
that, or to come on board whenyou install it.
And then sometimes it's justand I hate to say it but bad
project, bad timing.
Right it was.
It was just a great idea.
There was a business need.
This is the right technology tosolve it.
But unfortunately, it's not theright time now, and I think
(24:11):
there are technologies out theretoday that people are still
looking at.
For example, one of the otherones that was not pursued that
aggressively was shelf-scanningrobotics.
Well, shelf-sc shelf scanningrobotics have been very
successful in a lot of retailerstoday, and now they're starting
to do things like be able toactually scan RFID tags.
There's companies out there,like Badger Technologies, that
could do that, and so it canactually do a shelf scan and it
(24:34):
could do RFID.
It can do a number of differentthings at a lower cost than a
potential associate free golfassociates to spend more time
with customers.
So a lot of this stuff is yeah,it's ready to go now, but it's
just not ready because of wherewe are, and I think those are
the stage gates you have to gothrough.
Yeah, yeah.
Speaker 1 (24:53):
So I would recommend people just read and be a
student of the business.
You know what is taking place.
How are others using it today?
Um, because I mean, you couldcertainly point to me and say
you do not have to be an expertright to um, to, to be, to
become passionate about uhtechnology and where it could be
(25:14):
used to the benefit of yourcustomer and your associates.
Um, but you know, the answermay be no for now, but it's not
no forever.
Yeah, and you know that's whatwe learned.
Speaker 2 (25:25):
Well, and I think at the end of it this is part of
being involved with the industryfor so many years and being
both on the supplier end and theretailer end.
And then you know thetechnology end is who's the
driver?
Who's the driver of thisbusiness challenge?
I would argue in the 50s, 60s,70s maybe, the suppliers were a
(25:47):
lot of the drivers because therewas only three networks out
there and they drove a lot oftheir advertising through media
that drove customers into thestore.
So I think the suppliers wereon the driving force of that and
I think that that transitionedover to the retailers suddenly
taking control of that andreally offering a complete,
(26:08):
great experience for thecustomers that can get anything
they want.
I think now there's this thingthat we all have in our hand
that becomes the shopper, theconsumer.
The customer is now in driver'sseat.
So if I'm standing in front ofa rack of clothes and I'm
looking for a size or whateverand they don't have it, I'm
probably not going to go ask tosee if it's in the back room
(26:30):
somewhere.
I'm going to pull out my phoneand I'm going to get it another
way.
So the customer becomes muchmore in the driver's seat and I
think the great thing about whatWalmart has done is they
recognize a customer is alwaysboss, they can hire and Sam
Walton said they can hire us andfire us at any time, but just
by deciding where to spend theirmoney.
So the big piece of again backto this example is knowing the
(26:53):
customer has always been at theforefront of knowing that we how
do we make that decision?
How do we make sure productsare there and a good price and a
good value and good merchandiseto be able to meet their needs?
Speaker 1 (27:04):
Yeah yeah.
I remember John Furner tellingus once that customer doesn't
need to see our org chart,meaning they don't need to know
the.
You know what's happening inthe Willy Wonka machine.
They just want the goods theway they want it when they want
it, how, and that's incumbentupon all of us to make that as
seamless as possible?
Speaker 2 (27:20):
Very true, very true.
Speaker 1 (27:21):
So I've talked a lot about you know from my vantage
point, but what otherdisciplines you know, whether it
be suppliers or the supplychain, can this technology help
that you're seeing today?
Speaker 2 (27:35):
Well, I think most retailers and suppliers will
start on the avenue of gettingtheir on-hands correct and
knowing what they have and whereit's located.
That's been the primary driverthat's gotten people into this
technology.
I think a few other retailershave taken a little bit
different approach, which is theasset protection or loss
(27:57):
prevention kind of mechanism.
The asset protection or lossprevention kind of mechanism,
and not so much of necessarilystopping people because of
shoplifting et cetera, but justknowing.
Well, how did my on-hands getto 50%, 40%, 30%, whatever?
How'd that happen?
Because I ordered 100 shirtsand if I received 100 shirts and
I sold 50 of them, I shouldstill have 50 of them.
(28:18):
How did I get so far off?
So I think this particulartechnology now that does require
us to probably step up thelevel of technology in the store
from a handheld to some fixedinfrastructure.
But it gives you the go to sayI just sold three shirts and six
shirts, just walked out thestore.
Maybe no stop, but first thingI do is I fix that on hand so I
(28:42):
don't disappoint the nextcustomer.
Secondly, I can give that dataover to the asset protection
folks to go.
Here's what happened Can youlook at, figure out what's going
on and figure out what'shappening.
The other one is did I geteverything I paid for?
I paid for a hundred shirts.
Did I really get a hundredshirts?
Did I get 95?
Or did I get the right sizecolor combination that I needed
(29:03):
to put that product on the shelf?
Or did I mix it all up?
Instead of five blue and fivewhite and five gray, I got all
black.
That doesn't help me.
That screws up my audience aswell, and the customer is
looking for that level ofassortment.
So clearly, those are the twoprimary drivers that people look
for the most part.
Speaker 1 (29:24):
You know, like I can imagine if you had the readers
and you could start from thesupplier so they know with
certainty that the dozen shirtsleft in the right combination.
Then, let's say, it hits aWalmart distribution center and
it's checked and verified there.
Then it makes its way throughthe back door into the store
inventory and it's accurate.
Imagine all the post-auditcleanup that you've just done.
(29:47):
Right, like everyone can agreeon, the number is the number,
and so to me, just theefficiency of it if it's carried
back through the system as wellas through the front door of
the store.
Speaker 2 (30:01):
Yeah, which is ironic because, when we go back to the
vision that Linda Dillman andPam Cohn had, it was being able
to do exactly that.
So that's where they started.
The real problem was at thestore.
Now we've sort of shifted a lotof this to the store and now
you see retailers going back upthe supply chain and going I
need to know where it is atevery step in the supply chain.
Speaker 1 (30:24):
It didn't come down to components at a supplier
factory.
Speaker 2 (30:27):
Sure could, sure could.
Speaker 1 (30:28):
And making sure you have everything.
Speaker 2 (30:30):
Yeah.
Speaker 1 (30:30):
So very cool.
So, Mike, where is the future?
Like you know, give me a little, excite me a little bit for
what you see coming next orwhere you think it might be
going.
I won't hold you to it, but Ithink our listeners would like
to know of where you see thefuture.
Speaker 2 (30:49):
Yeah, I think there's a couple.
The first is in a retailer, amass merchandise retailer, club
retailer.
We have to recognize that RFIDis a great tool in the toolbox.
We have to recognize that RFIDis a great tool in the toolbox,
but it's not the only tool inthe toolbox.
There are certain properties ofRFID liquid and metal that
(31:09):
become very challenging to beable to make this technology
work.
So I think the first thing iswhat are the other potential
technology, whether it's a 2Dbarcode, a QR code, an image of
the item, something like thatthat allows us to do what do I
(31:31):
have and where is it located,with items that are not RFID
friendly?
That's the first part, so I cansee us being able to do this for
other products that, eventhough they won't work with RFID
necessarily.
The second part is and we'veall seen this, so it's not a
surprise to anybody but thatwhole seamless shopping
experience where I literallyjust take stuff and walk it out
(31:53):
of the store.
And clearly Sam's Club has thebest example of that with their
Scan to Go app, where you canliterally never go to a checkout
.
You literally go into the club,you pick up what you want, you
scan it individually, and thenyou go through an artificial
intelligence arch which allowsthem to be able to say yes,
(32:14):
we've audited this basket.
To the best of our knowledge,everything has been compensated
and paid for in there.
I think that's that kind offrictionless environment.
Nobody likes standing in linechecking things out.
I don't know a whole lot ofpeople other than you know,
really geeky people like me,that like self-checkout.
They would just prefer to grabtheir stuff.
Speaker 1 (32:32):
You could get your side hustle if you want, I mean,
if you like it that much.
Speaker 2 (32:35):
Yeah, you could do that.
Probably won't do that, yeah,but to me, those are the couple
of things which is combining thepower of RFID when you don't
have RFID friendly products, andI think this whole seamless
checkout experience is and theindustry is well aware of it.
They've been trying to chasethat for a long, long time, but
to me, those are the.
Those are the ones that I thinkare really exciting and
(32:56):
intelligent.
The third one is is realobvious.
Everybody's talking about it.
People have been talking aboutartificial intelligence forever.
Well, this gives you a richsignal of what do I have and
where is it located.
In every box in the store.
Now you have data where you canuse AI to do really, really
(33:16):
creative and business-drivingthings, versus what you had
before, which is running AI on aplatform of 30% to 40%
incorrect data, right.
So getting the data rightgarbage in, garbage out getting
rid of all that but knowingexactly what you have and where
it's located, you can build AItools that drive work at the
(33:36):
associate level, which isexception-based work, okay.
And the last one I'll tell youis we still spend, in my opinion
, way too much time asking ourassociates to collect data for
systems that we have, whetherthat's scanning it out or fixing
a price label or even RFIDwanding.
(33:58):
Even though it's been a greatbenefit, we're still asking them
to collect data for our systems.
To me, the future is how do wefree them up from that?
They never have to scananything.
They never have to perform anytask to collect data for our
systems.
Instead, they're just givenalerts of things that they need
to take care of.
That, physically, we haverecognized as an inconsistency
(34:20):
in what we want from a stalker.
Speaker 1 (34:21):
Well, I would think there has to be some point where
, a tipping point where RFID isbeing used across the box so
much that it is worth theinvestment needed to take that
out of the associates' hands,right?
There's got to be a tippingpoint where, mathematically
you're like this makes moresense than the labor that we're
(34:42):
costing ourselves, right?
So perhaps we'll see that.
I think so.
I think so.
That would be amazing.
It's very exciting.
If you had asked me back incollege, when I knew I wanted to
be a buyer, that I would behaving this kind of a
conversation, that what I wouldlearn would be so
all-encompassing, it would haveblown my mind.
(35:03):
But you know what the beauty ofthe retail industry is, that
you are a Forever student andyou do keep learning, and that's
why I love, you know, thisforum with doing business in
Bentonville, and why I washooked on it is that we do get
to do that.
I mean, what an amazing careerwe all get to be a part of.
So thank you today for joiningme on the subject, thank all of
(35:27):
you for tuning in to our podcastand again, my name is Deanna
Baker and if you have anyquestions, any feedback for me,
I would love it.
Please send it.
You can find me on LinkedIn andyes, deanna is spelled odd
D-E-A-N-A-H.
I have had a very creativemother.
I'll thank her for that, but Ireally appreciate you tuning in
(35:49):
today.
Again, we love feedback.
You all have a great day.
Well, hello everyone, I'm Deanna Baker and welcome to
Doing Business in Bentonville.
We have an exciting topic todaywith one of my long-term
friends in the business world,michael Grain, mike.
And let me just give you alittle background on Mike and
then I'm going to kick it overto him.
But Mike has a rich 42-yearcareer and it's from both sides
(00:31):
of the aisle, so both supplierand retailer.
He worked for almost 30 yearsfor Procter Gamble, right 25.
And then on to Walmart, sodefinitely switched to the
retailer side for a period oftime, as well as Crossmark and
Collaboration LLC, right andconsulting.
So all of his talent has beenfocused on collaboration to help
(00:55):
deliver sales to the retailsupply chain and he has linked
suppliers and retailers throughall of these journeys together
by leveraging informationtechnology and data to increase
sales and profitability.
So, mike, we're really happy tohave you here.
I wanted you to be a guest onDoing Business in Bentonville
(01:16):
with me because of our journeyand how I came to know you and
what an asset you were to medoing what you do best, came to
know you and what an asset youwere to me doing what you do
best, and so today we're goingto revisit how we were connected
through the RFI journey atWalmart, but then take it beyond
that to everything else that wehear about happening.
What's on the forefront, why weshould care, depending on
(01:41):
whichever discipline you're in,and maybe we can show others
kind of the way collaborationcan work.
Speaker 2 (01:49):
Indeed Awesome.
Speaker 1 (01:50):
So let's go back to that day.
Speaker 2 (01:52):
Sure Well, first off, thank you very much for the
opportunity to be here.
It has been fun to work withyou.
It's been fun to work with yourteam when you were at Walmart.
We went through quite aturbulent time of trying to
figure out what the right thingto do for the shopper was.
I feel like we landed in a verygood spot and set up a very
good platform for all retailersto participate, so I really
(02:14):
appreciate the opportunity tocome and spend some time with
you today.
Speaker 1 (02:17):
Fabulous, fabulous.
So RFID I didn't know what theacronym stood for.
I didn't know that it was about2018.
And I was the SVP in apparel,leading the team there, and I
was faced with a dilemma as aleader of my team in that,
(02:40):
globally, I knew where ourcompany was headed.
I knew that curbside deliveryat the time was what everyone
was working on and we were stillin two apps.
We had an app just for grocerypickup and then we had we called
it the green app and then wehad a blue app which was for all
things, general merchandise.
But all of my counterparts werebusy figuring out how to get
(03:01):
included in this curbsidedelivery and it was obvious that
the customer was migratingthere and apparel was completely
left out of the conversation.
And I knew why.
I mean, it wasn't that it wasunfair.
It was a real simple reason inthat the inventory was not
accurate and we knew it wasinflated on paper, was not
(03:29):
accurate and we knew it wasinflated on paper.
But in order to be confidentthat they could pick an order
for a customer and deliver it,they need to know that the down
to the skew level, which ispretty intensive in apparel, had
to be there, and you know, onesolution was, well, carry more
inventory.
Well, anyone that knowsanything about apparel, if you
do size and color combination,one program can be 60 different
(03:51):
SKUs, right?
And so that was not a solutionfor us.
So I knew I had an issue if Iwanted to be part of the box,
right?
So we started this journey toeducate ourselves on what was
feasible and what maybe some ofthe solutions were, and that led
our team to you, right, and Iwould just love to get your
(04:15):
thoughts, being on the oppositeside of the table from us and
what you saw.
Speaker 2 (04:20):
Yeah, yeah.
Well, I think the first andforemost, the most important
part is this is not the firsttime that we tried an RFID
strategy, right, and I think alot of retailers out there were
also involved with that.
You know, prior to the 2018,2019 time period.
(04:40):
Literally since World War II,I've been along for a long, long
time, really.
It came to retail actually whenI was still with Procter Gamble
, if you remember, linda Dillmanand Pam Cohn from Walmart
really tried to drive what's thenext level of engagement with
suppliers and Walmart.
It was RFID, particularly atthe case of Palo Alto, right,
(05:03):
can we track product all the wayout through the supply chain?
And at the time it was.
Let's start out real small witha small prototype, and let's
back all the way up and see ifcan we get the next 50 suppliers
or 100 suppliers, and what wefound quickly was, yes, we could
do that.
The technology was still prettyexpensive.
(05:23):
I mean, tag costs were abovethe 27 mark.
That made it prohibitive to doanything below case and pallet,
and so we put that on the shelfand we did a couple of other
iterations as well.
What happened in 2018, I think,was a perfect storm.
It was literally the costs hadcome down, the technology had
(05:43):
become better.
The cost had come down, thetechnology had become better.
And this age-old problem ofwhat do I have in the box and
where is it located?
Specific enough I could send anassociate or a customer to go
find it was extremely difficult.
We're talking about we call aterm perfect match.
Perfect match is if theaudience says I have five and I
actually have five.
(06:04):
That's a perfect match.
We found that to be literallyin the 50 to 70% range, 60%
range.
So pretty bad right.
When you're looking for aspecific color shirt or a
specific size of a garment, wecan't have that level of
accuracy and have our associatesgo chasing that.
(06:26):
So I was working I'd beenworking with Walmart for a while
at RFID.
We had stood up a prototype ina local store, which is
infrastructure.
That was technically a ragingsuccess.
So we now knew the technicalbenefits were down.
Now the question was could wecreate a business case?
I thought why to do that andthat really let in.
(06:47):
It was a perfect storm in termsof in a good way, in terms of
you and your team trying tofigure out how do I get into
this online space, this buyonline.
Pick up in store space, whichis what it's called today, and
the big barrier being I got toknow what I have and where it's
located.
Otherwise, I'll be sendingpeople to chase things that are
not in the store.
So it was a very goodopportunity to work together.
Speaker 1 (07:12):
Well, you talk about the perfect storm.
I mean, I had to reach thepoint as a leader of my team
where my desire to be a part ofthe emerging infrastructure of
Walmart was worth myuncomfortable feeling in the
space where I knew nothing.
But I had to find out becausethe other thing that I knew was
(07:32):
true beyond that our inventorywas off was that others were
ahead of us competitors.
So I had seen it Lululemon.
I mean, they were reallyprobably at that moment in my
mind, the most efficient in theuse of it.
But I saw the tags in Targetand Macy's had talked about it
years ahead.
So we were behind.
(07:53):
And I think one of the bigthings that made me say, okay,
maybe now is the time wasoriginally, I remember the cost
of the ticket being like 25cents or something crazy, and,
of course, when you have openingprice point items, it just
mathematically didn't make anysense.
But now they're telling me well, it was about five or six cents
(08:14):
at the time.
So I'm like, okay, all right,it's actually possible for me to
play in this arena now.
So it was my quest to have myteam a part of where Walmart was
moving that pushed me out of mycomfort zone to do this and I
remember one of the first thingsthat we did is we went down to
(08:34):
the Auburn University lab.
They have everything set up toexplain RFID and my team there
learned not just the technologybut how tickets were made and a
lot of the infrastructurechoices that were available at
the time, which you know wecould do it as simplistic, fast
and inexpensive if we wanted touse a handheld device, or it
(08:58):
could be seamless with, you know, infrastructure inside the
store, which obviously was goingto cost a lot more money and
time to get approvals.
So we left there really with amission to take it back to the
leadership of Walmart to saythis is worth our investment of
time and money.
And they gave us the greenlight and so from that point on
(09:22):
it was kind of like opening aPandora's box and I'm like, oh
my, there's a lot more to thisthan I ever imagined.
And so you know it took a teamof people cross-functionally in
Walmart and we had to have skinin the game from people not just
merchandising any longer, butliterally within IT who was
(09:43):
going to develop the toolswithin store operations, who was
going to create the processesfor our store associates, to
follow and train them, and thenmy first goal was bringing all
the suppliers on board because,guess what?
We had to reticket everything.
So that took us about a year,and so I think one of the
(10:04):
lessons I've learned as a leaderis just the passion you have to
have around a solution for thecustomer, because it may take
not you but maybe the personthat comes behind you even to
see something through because ofthe length of time it takes.
Fortunately, I was able to seethis one through.
We had a little thing calledCOVID that was in the middle of
(10:24):
it, which added a wrinkle, butit was a journey for us that we
had to learn along the way.
No one could give me youcouldn't give me the full
blueprint.
Speaker 2 (10:35):
Right.
Speaker 1 (10:36):
Right for how it was going to play out at Walmart, so
that was probably my mother.
My other big learning in thisis that I couldn't let fear of
the unknown stop me fromstarting the process.
You know, I knew where I wantedto go.
I just didn't exactly know theway to get there, but I
(10:57):
surrounded myself with peoplewho knew more about it than I
did.
Speaker 2 (10:59):
Well, but I think in retrospect, one of the things
that I can remember vividly onthat is it was very clear from
my perspective.
There was a group of facts thatyou knew really solidly, things
like we want to be part of thisonline process going forward.
That's going to be one of thebig strategies for us being
successful in the apparel slashfashion business.
(11:22):
Number two, that just because Iknew some things about this
technology from past experiencesdidn't mean that that
necessarily translated intowhere it was today.
So you gave yourself theopportunity to say I know what
it was when I was there before,but I wonder what it is now.
And you asked yourself thosequestions versus oh, that'll
(11:43):
never work because it's tooexpensive or it doesn't work or
whatever the rationale was.
And the third thing is you werevery clear in terms of what your
role was.
Your role was merchandising,senior leadership and engagement
with the suppliers, becausewithout tag product it doesn't
happen.
It can happen in a small proofof concept or a pilot in the
(12:06):
store, but in terms of gettingbroad adoption across the
industry and using it for otherthings, it's got to happen to
start at source, and that'swhere that supplier sourcing
started.
So working through thosechallenges and knowing what you
do and then recognizing hey,there's a lot of stuff I don't
know.
I need operators, I need ITfolks, I need supply chain, I
need industry experts like GS1and Auburn to come alongside me
(12:28):
to be able to do this, and Ithink it was a really good case
example where you physically ledthis work from a business
standpoint, but you delegatedthose the parts that you needed
more help with to other peoplein the company.
Speaker 1 (12:42):
Absolutely, and it was.
It was their buy-in as wellthat allowed it to happen.
So you just think about the theall of the associates across
4,000 stores for the apparelfloor to work differently and to
have to learn the newtechnology.
So my store operations partnerswere critical, the people that
(13:03):
helped us track whether thestore associates were picking
orders.
If they weren't, if there was anil pick, why, and helping us
really drill down to why isn'tthis being adopted more readily.
So it was a continual, evenafter everything had been turned
on and it was working well.
Then what were the otherunintended consequences or
(13:24):
things that needed to happen inorder to fully unlock the
potential of the technology?
And so it was a continuallearning.
But I am so happy to be able tosay we solved a problem for the
most skew-intensive, laboriouscategory in the box Apparel
(13:45):
right, and we proved its worthand now it's in general
merchandise correct.
Speaker 2 (13:52):
Correct, correct.
Walmart has expanded.
They've been very public aboutthis.
They've been expanded wellbeyond apparel to going in
things like home and electronics, and automotive and sporting
goods and basically anything inthe kind of general merchandise
space, and the great thing isthat I would say that there's a
lot of retailers that arefollowing quickly and doing
(14:15):
their best job to keep up andcatch up.
So I think you went from aposition where you started this
whole journey is, yeah, you'reprobably behind to a place where
you're clearly demonstratingleadership from a technology
standpoint, from a businessstandpoint.
Speaker 1 (14:30):
Well, in apparel it's interesting because it's so
fluid in how it sells.
But becoming as systematic aswe could for the way it should
function at store level was alearning that actually changed
the way my team worked.
So we had to go back and evenhow we purchase goods.
Stores are very unique thedifferent layouts, different
(14:53):
stores.
It's not prototypical, in fact.
There are no two stores exactlyalike and if you think about it
apparel or fashion fashiontoday is in the center of the
box and so there's a high degreeof variability.
And the fact that now I canlook on my app and if I'm
shopping for an item, I can knowwhich rack it's on with
(15:17):
certainty.
That took a discipline back tothe merchants and how we bought
differently and managed theinventory differently.
Speaker 2 (15:25):
Right.
Speaker 1 (15:25):
So it really created a change in work for every
discipline of the box.
Yeah, and I am sure somethingelse will come along.
Something is probably right nowthat's going to change the way
we have to.
You know our working ways again, but I'm very happy.
The team rose to the challenge.
(15:47):
The suppliers were excellentpartners for us.
Once everything was ticketedback to the supplier
conversations and it took a fullyear for us to run through all
of the inventory and get itticketed.
The onus was on Walmart tofinish creating all of the
processes and internal toolsbecause they had been paying for
(16:09):
the tickets for the better partof the year and were not seeing
any value from it Right part ofthe year and we're not seeing
any value from it.
So you know, it really was apressure back on the company to
be good stewards of what thesuppliers had invested in,
because this was to grow theirsales as well.
Right, and Mike, you told us itwas going to be like the
industry average was off about50, 60%.
(16:31):
You just quoted I recall theday it went live, for us it was
30%.
I recall the day it went livefor us it was 30%.
Yeah, 30% drop on paper fromwhat we were seeing the day
before.
And of course then we had towait for orders to normalize, to
get everything back in stockaccurately.
But there was definitely apayoff in sales for us, in sales
(17:01):
for us, not to mention, I think, what it can do for the future
of apparel in Walmart as a total.
So I'm very proud of it.
If you can't tell, I'll go onand on.
Speaker 2 (17:05):
But just to build on that, I think I mean, okay, if
it was 50, 50, 30, whatever thenumber happened to be.
What we did find was when itwas wrong.
It was usually an overstatedsituation.
So it says I have five of thesepairs of socks.
I really don't have five ofthose pairs of socks.
I don't have any of those socks.
And so to correct thatinventory, it required an RFID
(17:30):
reader to read the RFID tag, toupdate the SKU count on that
particular item.
And I'm usually saying I don'thave five, I have one or I have
zero, for example.
Well, that creates obviously ashrink opportunity inside the
store.
So how do you account for thatsituation so you don't penalize
the store for things like that?
So the whole markdown processbecame a really important part
(17:52):
of this as well, which is how doyou manage that from a
strategic level?
Because we don't want to putthe system in and immediately
the stores hate it becausethey're seeing all kinds of
markdowns, right.
Speaker 1 (18:03):
So that challenge was there as well and in addition
to just it not being therecleaning up the accuracy.
So I don't have three of this,I have two.
I don't have one, I have three.
When you come down to a racklevel and one of your fringe
sizes has a holding capacity ofone, it is.
(18:23):
You know, that was actuallysomething I hadn't thought of in
becoming more accurate, wasable to actually reduce
inventory and not miss a sale,right, right.
So it wasn't just I have it orI don't or I have zero I thought
I had five but just reallyfine-tuning the accuracy so that
we could show the customer thatwe have one left, two left,
(18:44):
three left, which to me isincredible in this space.
Speaker 2 (18:51):
Well, I think the only other thing is okay.
So we've now reflected what weactually have versus what we
thought we had, and I have threeof these SKUs sitting in the
back room.
I have none sitting on thesales floor.
Driving that replenishment fromthe back room to the sales
floor and getting the operationsteam to execute against those
alerts was a huge unlock,because I can tell you, I can
(19:13):
get your on-hands right all daylong, but if no action occurs
which changes getting product onthe sales floor for a customer
to buy it, we're not going tosell more.
So again, from my perspective,it was a clear example of it's
going to take a bunch ofdisciplines to make this happen.
No one does that.
And I think the other piece isis there's so many projects that
(19:34):
we do today which are well,let's just go do this, it's an
operations project?
This one was which are well,let's just go do this, it's an
operations project.
This one was merchandisingoperations, supply chain
technology, design, industrypeople all coming together to do
these projects.
These are not technologyprojects, they're change
management projects, and I thinkthat's what really makes them A
much more impactful but B a lotmore difficult and a lot more
(19:57):
coordination you have to do.
Speaker 1 (19:59):
Absolutely, and how you tell the story to your
organization matters.
That's another thing I learned.
So, as we're talking aboutinvestment and CapEx and all the
different components, when Iwould go in to present the case
for this, I could be in mycompany competing for money that
(20:20):
was either going to go to thisor maybe to build a milk plant.
I mean apples, oranges, both.
You know, of course, we wantedto do that.
We, you know we'd love to doboth.
But when a company is having tomake, you know, rational
decisions about where the moneygoes and be prudent with it,
(20:40):
it's important on the leader ofeach discipline to come with a
story and the reasons why, andto be compelling and hopefully
get the buy-in you need.
But that takes a lot of passionbehind it.
It's not just fact based.
But that was also a new musclethat I learned.
(21:01):
Yeah, and that well, of courseit's important.
Everyone should know it'simportant.
I mean, look around, butliterally, when you're having to
make those kinds of decisions,not everything gets a yes.
Speaker 2 (21:11):
Right.
Speaker 1 (21:12):
So that was a huge learning for me as well.
Speaker 2 (21:14):
Well, this project, I'm sure, was scrutinized a
number of different ways because, literally, we were
recommending moving into thisexactly what you just said,
which is moving into a verytumultuous time period in the
world, which was COVID, muchless the retail industry, and
there were a lot of options ofwhat do we keep doing, what do
we stop doing, et cetera, whatdo we put on hold for now, et
(21:36):
cetera, and this one fortunatelymade the cut.
It is a good thing it did,because if we would have put
that back on hold, we guaranteewe would be where we are today.
Speaker 1 (21:46):
Yes, and I think it's very evident when you see some
of the retailers today whohaven't started that journey.
Speaker 2 (21:52):
Yeah.
Speaker 1 (21:52):
And you know I said I was behind.
I felt like we were behind.
I am thankful that it was giventhe green light when it was,
but even more of a lift today,when I think now all of us as
leaders should be thinking aboutwhat the next thing is.
What else could remove frictionfor the customer?
What else could make it easierfor store associates or
(22:15):
fulfillment?
However, the customer wants thegoods to be fulfilled.
We should be thinking aboutthat.
So what do you say today, witha lot of the technology advances
that are going on around us allthe time, if you hear of
something today and you're like,well, that's not right for us
right now, what would you say tosomeone that was in my position
(22:36):
, like I had at Walmart?
Speaker 2 (22:44):
was in my position, like I had at Walmart.
Well A it could be a piece ofsolution or a piece of
technology that just isn't readyyet, and I think we experienced
that in RFID.
When we started back in call it2003 timeframe.
Did we learn a bunch?
Yes, Was it ready from a costperspective to ticket individual
selling items at the store?
Not really.
Was it effective enough yet?
So was it ready to actuallysolve the problems that we
(23:08):
wanted?
And I think you always have tothink through that and that's
why there's still a lot of proofof technology and let's go try
it in the store for a few daysand let's go try this, let's try
that.
So congratulations to thosecompanies who make those
decisions to go try that.
But sometimes it just comesback and says not ready yet,
right.
There's other things that areyeah, the technology's ready,
(23:29):
but we have fundamental businesschallenges out there right now
that we got to get to before wecan go and do this right.
So if my shelves are all empty,you know, putting a technology
like RFID and no resources toget the product out of the back
rooms and sales floor wouldn'thelp us.
So operational things you haveto have as prerequisites for
(23:50):
that, or to come on board whenyou install it.
And then sometimes it's justand I hate to say it but bad
project, bad timing.
Right it was.
It was just a great idea.
There was a business need.
This is the right technology tosolve it.
But unfortunately, it's not theright time now, and I think
(24:11):
there are technologies out theretoday that people are still
looking at.
For example, one of the otherones that was not pursued that
aggressively was shelf-scanningrobotics.
Well, shelf-sc shelf scanningrobotics have been very
successful in a lot of retailerstoday, and now they're starting
to do things like be able toactually scan RFID tags.
There's companies out there,like Badger Technologies, that
could do that, and so it canactually do a shelf scan and it
(24:34):
could do RFID.
It can do a number of differentthings at a lower cost than a
potential associate free golfassociates to spend more time
with customers.
So a lot of this stuff is yeah,it's ready to go now, but it's
just not ready because of wherewe are, and I think those are
the stage gates you have to gothrough.
Yeah, yeah.
Speaker 1 (24:53):
So I would recommend people just read and be a
student of the business.
You know what is taking place.
How are others using it today?
Um, because I mean, you couldcertainly point to me and say
you do not have to be an expertright to um, to, to be, to
become passionate about uhtechnology and where it could be
(25:14):
used to the benefit of yourcustomer and your associates.
Um, but you know, the answermay be no for now, but it's not
no forever.
Yeah, and you know that's whatwe learned.
Speaker 2 (25:25):
Well, and I think at the end of it this is part of
being involved with the industryfor so many years and being
both on the supplier end and theretailer end.
And then you know thetechnology end is who's the
driver?
Who's the driver of thisbusiness challenge?
I would argue in the 50s, 60s,70s maybe, the suppliers were a
(25:47):
lot of the drivers because therewas only three networks out
there and they drove a lot oftheir advertising through media
that drove customers into thestore.
So I think the suppliers wereon the driving force of that and
I think that that transitionedover to the retailers suddenly
taking control of that andreally offering a complete,
(26:08):
great experience for thecustomers that can get anything
they want.
I think now there's this thingthat we all have in our hand
that becomes the shopper, theconsumer.
The customer is now in driver'sseat.
So if I'm standing in front ofa rack of clothes and I'm
looking for a size or whateverand they don't have it, I'm
probably not going to go ask tosee if it's in the back room
(26:30):
somewhere.
I'm going to pull out my phoneand I'm going to get it another
way.
So the customer becomes muchmore in the driver's seat and I
think the great thing about whatWalmart has done is they
recognize a customer is alwaysboss, they can hire and Sam
Walton said they can hire us andfire us at any time, but just
by deciding where to spend theirmoney.
So the big piece of again backto this example is knowing the
(26:53):
customer has always been at theforefront of knowing that we how
do we make that decision?
How do we make sure productsare there and a good price and a
good value and good merchandiseto be able to meet their needs?
Speaker 1 (27:04):
Yeah yeah.
I remember John Furner tellingus once that customer doesn't
need to see our org chart,meaning they don't need to know
the.
You know what's happening inthe Willy Wonka machine.
They just want the goods theway they want it when they want
it, how, and that's incumbentupon all of us to make that as
seamless as possible?
Speaker 2 (27:20):
Very true, very true.
Speaker 1 (27:21):
So I've talked a lot about you know from my vantage
point, but what otherdisciplines you know, whether it
be suppliers or the supplychain, can this technology help
that you're seeing today?
Speaker 2 (27:35):
Well, I think most retailers and suppliers will
start on the avenue of gettingtheir on-hands correct and
knowing what they have and whereit's located.
That's been the primary driverthat's gotten people into this
technology.
I think a few other retailershave taken a little bit
different approach, which is theasset protection or loss
(27:57):
prevention kind of mechanism.
The asset protection or lossprevention kind of mechanism,
and not so much of necessarilystopping people because of
shoplifting et cetera, but justknowing.
Well, how did my on-hands getto 50%, 40%, 30%, whatever?
How'd that happen?
Because I ordered 100 shirtsand if I received 100 shirts and
I sold 50 of them, I shouldstill have 50 of them.
(28:18):
How did I get so far off?
So I think this particulartechnology now that does require
us to probably step up thelevel of technology in the store
from a handheld to some fixedinfrastructure.
But it gives you the go to sayI just sold three shirts and six
shirts, just walked out thestore.
Maybe no stop, but first thingI do is I fix that on hand so I
(28:42):
don't disappoint the nextcustomer.
Secondly, I can give that dataover to the asset protection
folks to go.
Here's what happened Can youlook at, figure out what's going
on and figure out what'shappening.
The other one is did I geteverything I paid for?
I paid for a hundred shirts.
Did I really get a hundredshirts?
Did I get 95?
Or did I get the right sizecolor combination that I needed
(29:03):
to put that product on the shelf?
Or did I mix it all up?
Instead of five blue and fivewhite and five gray, I got all
black.
That doesn't help me.
That screws up my audience aswell, and the customer is
looking for that level ofassortment.
So clearly, those are the twoprimary drivers that people look
for the most part.
Speaker 1 (29:24):
You know, like I can imagine if you had the readers
and you could start from thesupplier so they know with
certainty that the dozen shirtsleft in the right combination.
Then, let's say, it hits aWalmart distribution center and
it's checked and verified there.
Then it makes its way throughthe back door into the store
inventory and it's accurate.
Imagine all the post-auditcleanup that you've just done.
(29:47):
Right, like everyone can agreeon, the number is the number,
and so to me, just theefficiency of it if it's carried
back through the system as wellas through the front door of
the store.
Speaker 2 (30:01):
Yeah, which is ironic because, when we go back to the
vision that Linda Dillman andPam Cohn had, it was being able
to do exactly that.
So that's where they started.
The real problem was at thestore.
Now we've sort of shifted a lotof this to the store and now
you see retailers going back upthe supply chain and going I
need to know where it is atevery step in the supply chain.
Speaker 1 (30:24):
It didn't come down to components at a supplier
factory.
Speaker 2 (30:27):
Sure could, sure could.
Speaker 1 (30:28):
And making sure you have everything.
Speaker 2 (30:30):
Yeah.
Speaker 1 (30:30):
So very cool.
So, Mike, where is the future?
Like you know, give me a little, excite me a little bit for
what you see coming next orwhere you think it might be
going.
I won't hold you to it, but Ithink our listeners would like
to know of where you see thefuture.
Speaker 2 (30:49):
Yeah, I think there's a couple.
The first is in a retailer, amass merchandise retailer, club
retailer.
We have to recognize that RFIDis a great tool in the toolbox.
We have to recognize that RFIDis a great tool in the toolbox,
but it's not the only tool inthe toolbox.
There are certain properties ofRFID liquid and metal that
(31:09):
become very challenging to beable to make this technology
work.
So I think the first thing iswhat are the other potential
technology, whether it's a 2Dbarcode, a QR code, an image of
the item, something like thatthat allows us to do what do I
(31:31):
have and where is it located,with items that are not RFID
friendly?
That's the first part, so I cansee us being able to do this for
other products that, eventhough they won't work with RFID
necessarily.
The second part is and we'veall seen this, so it's not a
surprise to anybody but thatwhole seamless shopping
experience where I literallyjust take stuff and walk it out
(31:53):
of the store.
And clearly Sam's Club has thebest example of that with their
Scan to Go app, where you canliterally never go to a checkout
.
You literally go into the club,you pick up what you want, you
scan it individually, and thenyou go through an artificial
intelligence arch which allowsthem to be able to say yes,
(32:14):
we've audited this basket.
To the best of our knowledge,everything has been compensated
and paid for in there.
I think that's that kind offrictionless environment.
Nobody likes standing in linechecking things out.
I don't know a whole lot ofpeople other than you know,
really geeky people like me,that like self-checkout.
They would just prefer to grabtheir stuff.
Speaker 1 (32:32):
You could get your side hustle if you want, I mean,
if you like it that much.
Speaker 2 (32:35):
Yeah, you could do that.
Probably won't do that, yeah,but to me, those are the couple
of things which is combining thepower of RFID when you don't
have RFID friendly products, andI think this whole seamless
checkout experience is and theindustry is well aware of it.
They've been trying to chasethat for a long, long time, but
to me, those are the.
Those are the ones that I thinkare really exciting and
(32:56):
intelligent.
The third one is is realobvious.
Everybody's talking about it.
People have been talking aboutartificial intelligence forever.
Well, this gives you a richsignal of what do I have and
where is it located.
In every box in the store.
Now you have data where you canuse AI to do really, really
(33:16):
creative and business-drivingthings, versus what you had
before, which is running AI on aplatform of 30% to 40%
incorrect data, right.
So getting the data rightgarbage in, garbage out getting
rid of all that but knowingexactly what you have and where
it's located, you can build AItools that drive work at the
(33:36):
associate level, which isexception-based work, okay.
And the last one I'll tell youis we still spend, in my opinion
, way too much time asking ourassociates to collect data for
systems that we have, whetherthat's scanning it out or fixing
a price label or even RFIDwanding.
(33:58):
Even though it's been a greatbenefit, we're still asking them
to collect data for our systems.
To me, the future is how do wefree them up from that?
They never have to scananything.
They never have to perform anytask to collect data for our
systems.
Instead, they're just givenalerts of things that they need
to take care of.
That, physically, we haverecognized as an inconsistency
(34:20):
in what we want from a stalker.
Speaker 1 (34:21):
Well, I would think there has to be some point where
, a tipping point where RFID isbeing used across the box so
much that it is worth theinvestment needed to take that
out of the associates' hands,right?
There's got to be a tippingpoint where, mathematically
you're like this makes moresense than the labor that we're
(34:42):
costing ourselves, right?
So perhaps we'll see that.
I think so.
I think so.
That would be amazing.
It's very exciting.
If you had asked me back incollege, when I knew I wanted to
be a buyer, that I would behaving this kind of a
conversation, that what I wouldlearn would be so
all-encompassing, it would haveblown my mind.
(35:03):
But you know what the beauty ofthe retail industry is, that
you are a Forever student andyou do keep learning, and that's
why I love, you know, thisforum with doing business in
Bentonville, and why I washooked on it is that we do get
to do that.
I mean, what an amazing careerwe all get to be a part of.
So thank you today for joiningme on the subject, thank all of
(35:27):
you for tuning in to our podcastand again, my name is Deanna
Baker and if you have anyquestions, any feedback for me,
I would love it.
Please send it.
You can find me on LinkedIn andyes, deanna is spelled odd
D-E-A-N-A-H.
I have had a very creativemother.
I'll thank her for that, but Ireally appreciate you tuning in
(35:49):
today.
Again, we love feedback.
You all have a great day.
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