Unlocking Retail Mysteries: AI, Store Locations, and Building Relationships with Ricardo Belmar

Are you ready to unlock the mysteries of the retail world? We certainly are! This episode is a fascinating exploration of the industry, featuring a candid conversation with retail tech advisor Ricardo Belmar. Ricardo's insights from his own journey into the retail industry, which he amusingly stumbled upon, are genuinely enlightening. Let's buckle up and appreciate the significance of good wi-fi in stores through Ricardo's experiences, and understand why executives need to step from their ivory towers into the retail environment.

As we navigate the bustling streets of the retail landscape, we find ourselves in the heart of the diverse establishments in the DC area. It's fascinating how the pandemic has laid bare the concentration of certain retail establishments, shedding light on the essential need for right-sizing stores in strategic locations. From Walmart's sprawling presence across the US to Macy's acquisition strategy that resulted in a surplus of stores - we cover it all. We even take a detour to explore why some areas are surprisingly Apple Store-free.

The episode takes a riveting turn as we dive into the world of AI technology in retail, particularly its role during the pandemic. Ricardo guides us through the labyrinth of AI's use in retail, from how it was leveraged by retailers to how tools like Microsoft Teams were used for innovative solutions. He beautifully illustrates the use of AI and machine learning in creating new products and services, and delves into the potential of influencer partnerships. Ever wondered about the impact of AI on jobs? We've got you covered. As we bring the episode to a close, we dwell on the importance of relationships in retail. Trust us, you don't want to miss this one!

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Connect with Ricardo on LinkedIn: https://www.linkedin.com/in/rbelmar/

Check out Ricardo's podcast, The Retail Razor Show, co-hosted with Casey Golden: https://redcircle.com/shows/retailrazorshow

RetailWire is the retail industry's premier source for news, analysis, and discussion. With a focus on the latest trends, technology, and consumer behavior, RetailWire provides a platform for industry experts and thought leaders to share their insights and perspectives. Whether you're a retailer, supplier, or service provider, RetailWire is your go-to destination for staying informed and ahead of the curve.

Be sure to leave us a comment and let us know what you think. You might even hear your comment read on the next episode!

To learn more, or to join our Daily Discussions, visit RetailWire.com.

Transcript

Speaker 1: 0:01

Welcome to the Retail Wire Podcast.

Speaker 2: 0:07

Hey everyone, what's going on? It's Brian back again with another great episode here on the Retail Wire Podcast. We've got another great person in the studio with me today. Excellent interview that I'm really looking forward to here. And well, to tell you a little bit about this next guest, he is an advisory council member, or was an advisory council member, for the GMU Center for Retail Transformation. He is a retail tech advisor and podcaster for his own company, retail Razor. You may have caught his episodes at some point. He also currently leads partner marketing for retail and consumer goods with Microsoft. No big deal, and thankfully we have his brain his big old, beautiful brain and insights as a brain trust member here at Retail Wire. Ladies and gentlemen, welcome to the show, mr Ricardo Belmar.

Speaker 3: 0:57

How you doing man, I'm doing good. Thanks for having me, brian.

Speaker 2: 1:00

Yeah, thanks for being here. Thanks, it's been a while coming. I know we've had this on the calendar for a little while so it's good to actually be recording and get everything going. So tell the folks at home a little bit about who you are and kind of your experience. You've got a lot of cool things in your past and I would imagine being at Microsoft right now. You've probably got some really cool stuff happening in your current setting. So tell us a little bit about you.

Speaker 3: 1:27

Yeah Well, I mean you know where's a good place to start. I mean I've kind of been in the retail industry for, I would say, probably going on like the last two decades now. I wasn't always doing things in retail in my professional career. I kind of ended up there like a lot of people I know that you know to steal a phrase you know sort of accidentally got involved in retail.

Speaker 3: 1:52

The company I was at at the time, you know we delivered managed services, particularly things like data networking, security, wi-fi, voice communications like that. But over time, as I was there, it turns out that you know, as the business grew, about 40% of our customer base happened to all the retailers and in fact the company at the time right, it had its roots, its original managed service, its first customer was Walmart, way, way, way. Even before my time there at the company it was. They had sold their network services to Sam Walton himself and that's how the company got and started offering services to retailers. So when I was there I was doing things like product management and product marketing. So we launched services like managed guest Wi-Fi for retailers. So I was probably famous at the time for telling retailers that the only thing worse than not having guest Wi-Fi in a store was having bad Wi-Fi in a store.

Speaker 2: 2:53

Yeah, that you know. It's funny that you mentioned that because you know you go through this similar experience whenever you're flying right.

Speaker 3: 3:02

Yeah.

Speaker 2: 3:02

It's like they're almost not have Wi-Fi available on a plane and have poor Wi-Fi on a plane. But that's still a very first world problem.

Speaker 3: 3:12

It is for sure, for sure, yeah, yeah. So that's kind of how I got it is started working with retailers. I've pretty much always, ever since then, been on the technology side of it as a technology provider to retailers. One of the interesting things that I learned in those days in the company was that, you know, we sold into retailers. Like I said, 40% of the time, right, 40% of our business was retail.

Speaker 3: 3:39

But the interesting thing was, you know, forget there was an interesting meeting. We had some retail consultants in that were advising us on some trends and things, and it occurred to me in the room to find out. You know, we had I don't know a dozen or so of our executives in the room and I asked one of the consultants as a favor, can you ask the room, who has ever in here worked in a retail store before Ever in their past? And I was curious to know because you know there was myself and one of the folks on my team. You know we had worked in retail stores. I mean, when I was going to school I started in the back stock room at one of the off price retailers and worked my way up to an assistant manager before I left retail and went into engineering school, which is sort of, I guess, an odd way to kind of end up back in retail.

Speaker 2: 4:32

It works and it works, you know yeah.

Speaker 3: 4:34

But of course you know it was. I had to do that in that meeting because I kind of thought, you know, I don't get the sense that a lot of our execs really understand how retail works, and sure enough if it doesn't. People in the room we were the only two who raised their hands that, yep, we've worked in a retail store before. None of nobody else had ever had a retail job of any kind. That kind of made me realize, yeah, I guess this explains a lot now, when we're having our internal product meetings, why they don't seem to get why we want to deliver things a certain way to a retailer, because they've nobody I'm talking to here, and none of the execs had ever been in a store before, on the other side of the counter, so to speak.

Speaker 2: 5:11

So yeah, Well, and it's really hard to relate whenever you haven't been, you know the person literally moving the boxes around, the person literally moving a rack around on the floor and understanding when you reset a mod at a corporate level, right, you can say, oh, it makes more sense to put it over here and, of course, visually and strategically and everything, it makes more sense, absolutely. Yeah. So if you feel yourself picking up the rack and moving it, you don't feel the frustration of having to pull off 60 items off of a shelf and set it down or 300 items off a shelf and set it down while you down, stack and then re-stack. So you know it makes a lot more difference to someone who has seen that whole process. And you know there's a local franchise here of a coffee shop that I know and now they've actually, you know they've gone huge now.

Speaker 2: 6:03

But one of their key you know tenets of starting with them is if you wanted to own one, you have to start out as a barista. You start out round floor. That makes sense. You don't come in and be hired in as management because we want you to understand the culture of the person coming in at 4.30 in the morning to get the shop open by 5. Then that way you really understand what we're dealing with and you're not just going to say, oh well, let's add on three more tasks in the morning because you know. Well, it makes sense, right? No, it doesn't if you're the person opening.

Speaker 3: 6:36

So yep, yeah, absolutely, absolutely.

Speaker 2: 6:41

So tell us, where are you based? Out of man.

Speaker 3: 6:44

So I'm in the Washington DC area just north of DC in Maryland. I've actually pretty much been here for gosh most of my life in and around the DC metro area, most of that time on the Virginia side. Now I'm on the Maryland side, which usually when I say that doesn't make sense to anybody who hasn't lived here. But everybody who lives here says oh yeah, of course yeah, because everybody moves around just like a circle around DC in different places and it doesn't mean anything to anyone when you cross the state line and it's like, oh, I'm just paying taxes to somebody different. Now, that's all.

Speaker 2: 7:16

Yeah, I similarly understand that, because whenever I say I lived in Kansas City for a while, they're like oh Kansas, Nope Missouri.

Speaker 3: 7:23

Or Missouri, no Kansas, yeah, of course.

Speaker 2: 7:27

It just matters what vibe you want. It matters what area you're around and the field you're in at that moment, because you definitely have a different feel to the Kansas or Missouri side. So then, wife, kids, family what does life look like for Ricardo?

Speaker 3: 7:48

Well, here in one of the suburbs in Maryland I have a wife and two kids. We've been here, at least in this particular place, for the last oh, give or take 12 or so years in this area Okay, not too far away before that. So, like I said, I've always kind of been in this area, so I guess we like it. It's been interesting, even from a retail thing. One of the things I tell people that I think is a little odd whenever someone starts talking about how we're over stored in the US which I fortunately haven't heard I hate this argument, but sometimes it pops up.

Speaker 3: 8:27

We see it in mainstream press where, when people are thinking that things are going bad in retail, everybody likes to talk about how, oh, there must be too many stores. And I always argue that well, it's not so much that there's too many, I just think that we have them in the wrong places. And what I mean by that is I looked across a map during the pandemic and everybody was talking about that how many stores are going to close and we're all worried about that. And I thought I think if I drive an hour to, let's say, an hour and a quarter, I can probably visit at least five stores of the same department store like at least certainly for a Macy's, but probably for other department stores too in almost any direction, and I thought that's got to be too many. Why does it make sense that I could hit five different Macy's?

Speaker 3: 9:19

And when we talk about omnichannel things, there's always that part of the conversation when there's the example of a customer can't find something in the store and the store associate says, oh, I can get it from another store, and you want to know well how far away is the next store you can get it from. Here. It turns out we've had so many malls, a lot of big malls actually, and so therefore they all have the same anchors, they all got built with the same anchor stores. So every single major store you can think of or large chain you can think of, they're all here in this DC area, and one of the reasons why those of us that live here we all talk about the DC area because it is all pretty much close, within like an hour and a half to an hour and a half drive and get to almost anywhere around the surrounding area, and you'll probably hit 20 different malls in that drive.

Speaker 2: 10:08

If you're a Gen Z or listening right now, a mall is a giant building that has a whole bunch of small stores residing in it. Yeah, no, sorry. You have to explain right, because it's the same thing with the CD. I feel like nowadays people are like it's ironic that we're living in an era, right now, that you have more people familiar with vinyl than you do with CDs.

Speaker 3: 10:30

Yeah, I know right yeah.

Speaker 2: 10:32

Whatever?

Speaker 3: 10:32

Who would have thought? Who would have thought OK, ok. So what do you think about it?

Speaker 2: 10:39

Yeah, so you have quite the diverse accessibility there to the different malls, the different stores. That didn't like to say and I think that was one thing the pandemic really did do for us was showed us where there's that hyper-concentration of some retail establishments. And you're right, it's funny I had. The first name that came to mind for me was Sears. Whenever you said that because obviously not now anymore, but I remember growing up you could catch a Sears in pretty much any store or in any city and small town that you travel to. I grew up out of these Kansas and we had a Sears within. We had what? Four Sears stores within an hour drive any direction, and so whether it was a large Sears mall store or if it was a small, like garden, like one of those I can't remember what it was called, but like the appliance center and stuff, like that and so they had kind of broken it down in these various departments and we had one really close within multiple directions of us, and so I couldn't help but wonder.

Speaker 2: 11:40

it's like, well, why would I go to this one instead of that one? And I think going through a large scale event like the pandemic definitely shine the light on just how unnecessary some of those locations were.

Speaker 3: 11:52

Yeah, I mean it's interesting to me because I forget what's the statistic that Walmart uses, because there are so many Walmarts in the country right that Walmart covers 90% of the population within whatever is a five mile distance or something. I forget the exact statistic, but it's something pretty significant like that and I believe it. I mean I know there's at least even where I live here I have a Walmart that's fairly close by. I say fairly because we're just not close enough that they won't do grocery delivery. So if anybody from Walmart's listening just hints, walmart and the Frederick area wouldn't be nice if you expand the grocery delivery. But then there's another one a little bit further away, another 10 minute drive from there. There's another Walmart. But basically you take Walmart right with how many thousands of stores they have. But I can hit in a not too dissimilar radius more Macy's stores than I can Walmart's.

Speaker 3: 12:46

So you have to kind of ask well, does that make sense?

Speaker 2: 12:50

Wow. I mean that's an impressive number then, just considering how dense the Walmart stores are. Yeah, that's actually. I would not have seen that coming.

Speaker 3: 13:01

Yeah.

Speaker 3: 13:02

So that's why my argument is always that I don't know that it's that there are necessarily too many.

Speaker 3: 13:07

It may be that there are too many in the wrong places because the way a lot of retailers, I think, looked at placement and the real estate and the population density, I think they may have overestimated a little bit during heavy growth and their exemptions.

Speaker 3: 13:22

I mean I'm probably unfairly picking on Macy's and in their case that ended up that way because of their acquisition strategy, that there are so many stores that weren't Macy's before but got turned into a Macy's through the acquisitions that they ended up with so many, versus like Walmart that intentionally picked locations to serve. But that's why I think of it as, when we talk about are there too many stores or not enough, it's more of a right sizing of where stores are, because I think you can pick just as many places on a map that are underserved by most store categories there product categories and segments versus other places where I can point to around here where there are just too many of the same one. But then likewise I can say I have to go a pretty decent distance to find an Apple Store. I don't have an Apple Store close by in any of the nearby malls, but I can probably get to two or three different department stores before I'll hit an Apple Store.

Speaker 2: 14:17

Well, and it's funny you say that too because here in Northwest Arkansas obviously we have one or two Wal-Mart's around, but also we don't have an Apple Store here. And so we have authorized retailers Sure, we have authorized maintenance facilities, for you can take your Apple product in to some places, depending on the need, but if it's a big deal you got to ship it off. Or the closest one, I think, to us right now is Tulsa, oklahoma. So that's our drive over. You got Kansas City three hours from here, but outside of that they've got, and in certain metro areas you have an Apple Store. What? Four or five Apple Stores in one small metro.

Speaker 2: 14:58

So I could see that obviously the population there is more dense and everything. But you think about all the corporate opportunities to connect here and to really, I think, to service apples and to really expand the Apple market would be huge in Northwest Arkansas. So I would think so, but maybe I'm wrong. I don't have access to those stats. So yeah, so then how do you so your retail tech advisor and then you're, you're, you're part of Microsoft right now. So how does that play into? Yeah, I mean, like where, how did you get involved in that? I guess we touched a little bit on it at the beginning, but tell us a little bit more about. I mean, I guess let me even backpedal this a little bit more and say, how'd you come to get involved with retail wire?

Speaker 3: 15:43

Oh well, so you know, like I said, I go back to. You know the the managed service provider was working at and you know my role was doing new product development and product marketing for things and, like I said, 40% of our market was retail. So we started looking for different ways to learn about retail, different ways to understand what are the trends that we need to try to serve Right, how do we know what we're aligning our products to, if we're hitting the mark with it? You know, in addition to just talking to the customers we have. But you know, there comes a point where we used to tell our execs you know our customer base is great, but when you look at, you know how retailers do things. A lot of them get very set in their ways at the time. So this is, you know, pretty far. This is probably, like you know, let's say, around I don't know, 2012 to 2015 timeframe, so not a huge amount of innovative things happening and when there are, right, it's certain very specific brands right that do that. So when we looked at our business and say, you know, if we just listen to our customer base, we're not going to hit on the latest trends and things because you know, there's like fairly good odds that a lot of our existing customers they're following other trends, right, that other retailers are doing. We need to find what they're doing. So how do we?

Speaker 3: 16:59

We got to start researching this right and, of course, retail wire at the time, you know, was an established site. So we started paying attention to the discussions happening on retail wire. I started reading those pretty regularly, you know, as a guest on the site, started commenting occasionally on some of these things and what we realized at the time is you know, there this was, I call it kind of the early days of nobody knew to call influencers influencers yet at the time. So I think the closest thing to an influencer community was probably retail wire in those days, because you had a lot of experts and people who really knew the business right commenting on what was happening in the industry. So it was paying attention to it.

Speaker 3: 17:39

And then, sure enough, there was a moment where retail wire announced you know, we're about to hit 30,000 followers on Twitter and they decided to launch a contest and say we want to know. You know, give us your best tweet that we can use to announce, you know, this major milestone and it turns out the prize. You know this happened to coincide with when Apple was launching the Apple watch, okay, and the prize was a new Apple watch. So I saw that I thought, oh well, I kind of like to have an Apple watch, so I'm going to enter this contest. And so I did. And sure enough, you know, one of the founders contacted me at the concert. Hey, we picked your tweet, you're the winner.

Speaker 2: 18:15

That's so good, man so good. Well, that's a worthy prize Right.

Speaker 3: 18:19

I mean that's kind of big especially when I joined the brain trust after that, and I haven't been with it ever since.

Speaker 2: 18:25

That's super cool. Yeah, that you said that was what early 2017 is what we were saying on there so man, that's super cool, yeah, and you know, that's one thing that I love about being here and, honestly, about having people like yourself with us, because it truly is kind of its influence, without necessarily being influencers, right.

Speaker 2: 18:46

You know, your influencers for the technology, influencers for retailer, for retail and everything. But it goes so much deeper than that, and so you know I love hearing that that was, you know, the reason why he kind of came to look for retail wire, and obviously we got a lot more stuff on the horizon here too. But, man, that's really cool to see how he came to be here and we're glad to have you, man.

Speaker 3: 19:10

So here's to know and I have to say I mean it's been great participating because it also helped me right as I learned from the other brain trust members at the time and as I moved on to other roles and other jobs. I mean, you know, the next company I went to work for was specifically because they were a. It was a European software company. They wanted to get into the North American market and, just as the company I was with, you know, 40% of their business were retailers in Europe and so they thought, well, we need somebody that knows retail in the US on the retail tech side to help us with our product marketing. So that's how I continue, just to get deeper and deeper into the technology side of it in retail with that. And then, you know, a time went on. Eventually I ended up here at Microsoft.

Speaker 2: 19:53

That's super cool. So then, okay, so you came in with Microsoft. So now you're there. What? What are some trends and everything that you're seeing in retail right now, if you know, if you can give us any insights, kind of just what you're experiencing there, what are some trends, what are some things that you see that are really exciting in retail right now, and and maybe some some concerns that you think people, people, should be looking out for. Obviously, we have a lot of emerging technology and everything going on right now, and I think, for the majority of it from a retail application, it's probably positive. But what do you see?

Speaker 3: 20:29

Well, you know, I'm always been looking at this from the, the technology side, so I pay close attention. I think right now, you know I probably have to go with the obvious choice, right, that everything is all about AI. Yeah, and what AI can do for retailers and obviously it's the generative AI tool is ever since chat GPT came out and what open AI is doing, that's gotten everyone's, you know, full attention, Although I will say, you know, I've been here Microsoft for a couple little over two and a half years now. When I first came, you know, there was still actually at the time there was a pretty good focus in AI as well. I I work mostly with our partners that that work in the retail space, so I don't get to see any early, early things with them. You know the actual Microsoft technologies. I'm kind of like everybody else out in the public when it gets released. That's what I get to see.

Speaker 3: 21:19

Yeah, but in working with my partners, I mean, it was it was significant for them to look at, particularly in the supply chain in those days, right. So I came right on the near the end of the, the pandemic phase, that Everything was about supply chain, right, because everybody was suffering, you know Nobody could figure out am I getting too much, too little? How do I? You know there was a lot of talk at the time that you know retailers were saying I tried leveraging AI models, but you know there had never been an event like this before, so there was no way to have trained things. The model, yeah, but you know I will say, though, that that was kind of the prevailing view that everyone talked about. But I Did learn, with a couple of my partners who were supply chain specific solutions and they were using AI Technology at you know, a couple of them say, you know, we found what some of our customers that the reason that happened is because people panicked and decided to second guess the Recommendations that the AI tools were giving them.

Speaker 3: 22:15

Yeah and it was that second guessing that caused them to have those issues where they either ran out of things or had too much that it stuck with what the models were saying. They were Maybe not a hundred percent right, but they were closer Than what they had done if they just stuck with it. But they were too nervous to say I'm following the technology Based on what was happening, you know, in the environment around them. So they made you know, they added some human adjustments that weren't necessarily the best because you know, at the end of the day, right, none of us had been through this before.

Speaker 2: 22:42

So yeah, there was a lot of emotional connection, I think, in that time to, I think, honestly justify probably why people did that. Was there anyone During that time that you saw and you know brand or person that you saw really sticking to the technology and that just rode the wave and said, hey, you know, I really did this. Well, the AI says this and and maybe it paid off for them. Was there someone or some organization that you saw that really just stuck to the gun, stuck it out and and Really came out of Victor in that one?

Speaker 3: 23:20

Yeah, yeah, I don't know if I can think of a specific one that a hundred percent stuck to it. I mean, I think if you look at some of the more that's how, the more obvious choices is, as maybe this time last year, right, when before everyone ended up overdoing it, right ended up over supply towards the end of the, the calendar year, right at this point last year, I think a lot of the, the larger retailers, right, we're saying you know they had figured out the inventory right and they had just enough of what, the where the demand was. I think it was probably more so in areas like home improvement, home goods, where people were just buying like crazy. So it was a little easier, I think, for the models to accurately predict. So we saw brands in those categories doing well. I think apparel had a much bigger challenge because just none of the models could figure out what styles were people gonna buy.

Speaker 3: 24:08

But you know I picked on Macy's earlier, but if I think of like later in the year last calendar year, right I think Macy's was the one that said they were looking at a lot of through some of their payment Information and other data. They had to figure out where they thought those trends are gonna go, and I think they actually did a better job than most on the apparel side predicting what things did they need to stock. So they were able to minimize, which I think at the time, right for apparel segment. The name of the game was minimizing the inventory, because they were suffering from having been closed right during the core part of the Pandemic. When stores had to shut down, they got stuck with a lot of excess inventory that was offseason. So I think Macy's did a good job coming out of that in terms of minimizing just by leveraging the data, and there was a lot. I know there were AI tools involved in that For them. The.

Speaker 3: 24:58

What I think was super interesting, though that I would not have guessed and not have thought of, is how some retailers took other technologies that you know I wouldn't have thought were retail specific, but they kind of made it into a retail solution. So, for example, I one of my favorite examples was REI, during the heat of the pandemic, when, you know, rei was not an essential retailer, so they got stuck having to close stores. They found ways, leveraging software like, like Microsoft Teams, right, things that are, these Collaborative tools which everybody you know at the consumer level, right, who had never heard of these products before? Right, because they hadn't used them in a corporate environment. But suddenly everybody was familiar with everything around video conferencing tools, right.

Speaker 3: 25:42

But REI was really smart. They, they Put together a program where they had their store associates who were now stuck at home, right, or not able to open a store, and they started setting up one-to-one meetings with customers to help them shop. So it was almost like they would have them do guided shopping. Yeah, those store associates, and I guess you know, pretty on brand, I think actually for REI, because, if you think about right, there associates really know the problem.

Speaker 2: 26:08

Absolutely. I mean, if you ever shop in an REI store or like I used to do a lot like rock climbing and stuff like that, and so you would go in, and If you, what? If you approach one of their employees in the rock climbing area, they know exactly what you need and they were very skilled in that in that spot, right. And if you, the same thing would apply if you were going skiing, if you were going hiking, if you're in Fishing or anything else. They had highly and have highly skilled People who are ready to help in those areas. So, man, I think that's a brilliant move.

Speaker 2: 26:41

You know, especially you know I was I was Thinking a while ago, as you were talking about Macy's, you know, stocking up and really leaning heavily on AI or anything that was Kind of the projection models. How crazy would that have been? And and if anybody's listening to this and you know someone who experienced this on a direct level, reach out. I would love to connect with you and hear this story. Think about how crazy that would be, because for a while, everybody was wearing nice sport coats, ties, you know, button-down shirts and everything like that, and Athletic shorts and flip-flops, because you're only seen from.

Speaker 2: 27:17

Yeah, right, right, so I could not imagine the the trend data coming off of the pandemic. How skewed that had to have been, because everybody had really nice top apparel. And the bottom down usually were pajama pants or swim trunks or whatever else, and so a second it's over.

Speaker 2: 27:38

It's like cool, we're going to the lake. You know, rip off the hat, rip off the shirt and you're out the door. So that's got to be really interesting. I would love to hear if anybody's listening on this. That's fascinating to me Just to see what kind of would skew numbers for future projections. Right, because now we're getting out of the pandemic. Places are open back up for the most part everywhere in the world. Right, and you know, trying to average that out now has got to be a pain in the butt somewhere. Yeah, I mean.

Speaker 3: 28:08

I would think you know it's interesting to kind of a it's sort of a thought exercise, right. But if you picture, you know it's only been what. We've only been barely even six months into the frenzy around generative AI. But imagine if those tools were around when the pandemic started and what retailers could have done to compensate for all the things they were trying to figure out. How do I deal with this if a store is closed? But if I had all this other, this technology today, I think it would have been a different environment. I think it would have seen some pretty crazy innovation happen.

Speaker 2: 28:38

Well, and I'm also shuddering to think I shuddered to think what would have happened with that many bored people at home.

Speaker 3: 28:45

And definitely I can't think of Phil.

Speaker 2: 28:48

Imagine the silly games and memes and everything else that would have come out of that.

Speaker 2: 28:51

So yeah that's fun, so OK. So we talked about your hot button topics, obviously AI and a lot of that machine learning stuff going on. Is there a brand that you're following right now that you're just kind of like, hey, you know, I'm watching them as they're riding this wave, or you know, I think we mentioned our AI, obviously and seeing how they rode out the pandemic, but is there anyone in the current environment that you're just kind of like really impressed by them? Or maybe an organization or you know even a person that's just like maybe a thought leader for you, someone you're looking up to?

Speaker 3: 29:26

Well, I mean, I'll tell you what's interesting. I see this is kind of almost across the board. So when I talk with a lot of our sales team members, you know what I hear them say is that you know pretty much every conversation with every customer, every retailer they talk to, is around these tools and what can they do, what's the art of the possible Right, and there's a lot of experimentation going on. I think that there are a lot of things being tested out and tried and developed that we're not hearing about publicly yet because everyone's kind of keeping it close and tight until they're ready to release it because it's going to have, so they feel it will have such a big impact. But you know there are pockets of examples, like another one that I'm a big fan of is what CarMax did. So if you think of the shopping experience at CarMax right, If you're most people right, you probably will start on the CarMax website, for example, or mobile, right, and just do some research, right You're, you have an idea of what kind of car you might be interested in.

Speaker 3: 30:23

You want to see what do they have, what variations are there, which models, right, and then you probably end up with you know a list, right, you come up with a short list. Maybe there's a half dozen models you like and you got to figure out a way to compare them, right? And if you think about, right, as a human being, that's a fairly detailed exercise, right? If you're, you know, my engineering background comes out and if it's me when I'm doing that, I'm like building a spreadsheet, right, and I've got columns for every car model and I'm trying to figure out what are all the variables I'm trying to put in here and check boxes and things to see which one has what.

Speaker 2: 30:57

So what you're going to do is to compare yes or no.

Speaker 3: 30:59

Exactly, yeah, exactly, yeah, right, right. It takes forever to fill all that in right and to do all that research and find all the data. So in CarMax, we know our customers do this every single time that they shop. So let's use these new AI tools to kind of do the research for them. And you know they have one of the big tools that they have are customer reviews of everything that's been bought through them. So there are thousands and thousands of reviews for pretty much any model you're going to shop for at CarMax, and that just adds to the data volume, right? So now not only you're trying to figure out features in a car, but you want to know what other people said about it Compounds the problem. So they put together a tool where you can just tell it what you're looking for, what kind of models you want, and the AI tool will go and do all this research for you and give you a summary of all the thousands of reviews across the six models you're interested in in no time, right, and now you can just sit back and look at the output and not have to create it yourself.

Speaker 3: 31:56

So I just you know the amount of time that would save, right For a customer. I think it's just huge. It's huge and that, to me, is one of the, I think, more immediately useful use cases for this technology is the ability to summarize huge volumes of data at just a lightning speed. Right, that just would not be possible for human being to do in a short amount of time. But these AI tools can do it right away, and you know, and it's as accurate as the data source, right? So if you, if you're going to say to yourself, well, I'm going to accept what the reviews say, then OK, you can trust the result. Right, that comes from it. If you're kind of skeptical of customer reviews to begin with, then OK, maybe you'll take it with a grain of salt when you see the output, but it's still a time saver, no matter how you look at it.

Speaker 2: 32:41

Yeah, no, I was actually just talking with this the other day on an episode that, a previous episode that just I don't know if it's aired yet or not, it might just be getting ready to come out, so but we were talking about exactly CarMax, talking about them and how you know this. I think this is going to shift everything for the future of SEO and you know kind of that that descriptive technology right, because AI is really going to start incorporating in what people think of the reviews. It's going to start. It's going to start, actually, I guess, thinning through kind of the, the fakers and the BSers on the brand side, because you know, it's really easy for me as a brand to say, oh yeah, here's, here's this cup that I have right, here's, here's my mug. Yeah, and I'm not a camera over here, but you know, here's my mug. It's a great mug. It holds exactly 24 ounces, it has this lid, it seals water tight, it does this and you know it glows in the dark and everything else. But maybe it doesn't, maybe it's, maybe it's 23.2 ounces, maybe it's, you know, a little heavier, maybe it's bulkier, maybe it's breakable, maybe it's whatever, and so I think this is going to AI is definitely going to help us shift, I think, to really become more accountable as brand for telling the truth about the products.

Speaker 2: 34:02

Because you know, I actually just did this the other day. We're getting ready to go on vacation here pretty soon. We'll actually have gone on vacation by the time this airs and I researched a pair of shoes. You know I want some white sneakers that are comfortable, that's not going to wear out. I want something that is very trendy but also doesn't have to be like weird and cutting edge, you know. So I went to Google bar and I started searching with the tool, looked for the most comfortable ones. I said how true to size are they? You know what's the materials that they're made of and everything, because I want to have something that's pretty natural, and so ended up finding some that I really enjoyed and they should be delivered any day now. But the cool thing is, all of that was done based on AI. So not only did I have the factual side of what's the best price on this, but I had the opinion side of the reviews that I read and it compiled several people's thoughts on.

Speaker 2: 34:56

Here's what people are saying about these items, and so you know that really helped me as a consumer to say, oh well, the brand actually does exactly what I thought it did, because it's a reputable brand that I love, right. Right, I think I have one of the bands on this, so I love vans already and they're solid shoe and I go, cool, this is the one that I want, this is what I'm gonna want, I'm going to get, and so, yeah, I think that's gonna shift everything for us moving forward in how you know, the authenticity kind of the, the ethical side of of Real conversation around these.

Speaker 3: 35:32

Yeah, I mean it really does. I think everything I kind of frame that around Everything related to product discovery right is gonna change with this, because we're all used to this model where I Basically do keyword searches right, I'm the user, I'm thinking of what's the right keyword or set of key words I want to use to make the search give me what I want, where now, and you don't have to worry about keywords, you're just gonna ask the same natural question you would ask a person. Yeah, if you walked into the store and asked the person the question, real, all your questions about what kind of shoe you want, that's what you're gonna ask the AI and those you're gonna get the answers that way. It's a completely different way of finding product.

Speaker 2: 36:15

Well, and to go back to the car max example right, like, you get the opportunity to include reviews where, say, like, if I use the idea of heated mirrors, right, so we've, we've probably I would assume almost everybody listening to this has either owned, owned heated mirrors. You know, like on a car, or they've at least experienced them. And you know that not all heated mirrors is the same, right, so some of them only heat the very center spot.

Speaker 2: 36:40

And then you have this nice edge full of ice still, or maybe it heats the bottom side and the ice still melts down over top of it and it's just a mess. So you know, I would imagine something like car max using this as a technology to say hey, you know what are the actual reviews? Does the le trim do the same as the se trim? Yeah, or the S trim? Are all their heated mirrors the exact same, or is one better than the other? Is it really worth the extra spend?

Speaker 2: 37:08

Yeah, it is no, it isn't, and so I think that's gonna shape everything, and yeah, yeah, no doubt about it.

Speaker 3: 37:13

No, they're about it. And and that doesn't even get into you know, other examples were seen, like on the product design Side of things. So what? One of my colleagues here at Microsoft. He posted this on LinkedIn. He didn't exercise, basically, I think he may be at most spent a couple of hours on this.

Speaker 3: 37:29

But he started with a Question of if I was designing a new women's running shoe. I think he said his example was his daughter was gonna run a marathon and needed to find the right shoes. So what if I was gonna design one? So he used all the generic AI tools that are there.

Speaker 3: 37:48

Over a couple of hours time came up with a complete design visuals you know, 3d rendered visuals of a brand new running shoe, women's running shoe. He had all the design parameters spec'd out. He had production schedule put together, a business plan written and the presentation to go with Presenting it to you know somebody, if you were a Pretending, he worked for somebody like a Nike and did this and needed to present it to a product team. You know all of that put together and he spent maybe a couple hours time to do this right, but what would have been probably a multi-week exercise to do, and and he's not even a product designer. Imagine, in the hands of someone who knows how to design this kind of product, what they'll be able to do with these tools and Not only that, but to think about.

Speaker 2: 38:40

You know, we've kind of gone through, you know, obviously, different phases of you've got to know. To be able to play right, you have to have knowledge, you have to have money, you have to have something. And you think of how many AI tools are available for free right now, because it's still Exploratory, so we're still trying to figure out and companies are still building their models, they're still trying to build their libraries of what questions people ask in everything. But you know, I don't think there's ever really been a better time to develop a product than right now, because, exactly what you're saying, you don't have to be the expert, you have to know what you like and you know how to know how to put basic words together in in a description, right, and even then you can even get the AI to Describe something and go yeah, yeah, I think that sounds like what I'm trying to make up here, right or no? I want to tweak it a little bit.

Speaker 2: 39:30

Yeah, this, this is like 90% there, let me add this phrase and then suddenly you know your work is done for you. So I, and that's that's impressive. I really like that idea, you know, because then you could even take that idea as long as you register it somewhere or you know document obviously that it's your proprietary info. You could shop it around to the big guys and kind of see, yeah, who wants to take this on and who wants to to maybe be a sponsor? Who's someone that that could be an influencer partner for you? And All of that done.

Speaker 3: 40:02

You could see things like you know brands that do leverage a lot of, you know, consumer influencers right where the model today right Is that they might give the influencer samples of the product right to talk about it on on whatever channel they have, right. But what if then they now the influencer could have the ability to contribute to the next product design with the brand right, and then it comes around full circle and then you have the influencer talking about it on their channels, but they were part of the design. So now how are their followers going to perceive that? Right? They're gonna be even more interested because now not only is it a brand that they like and it's an influencer they follow, but they jointly put this product together. Now, I think there's just a lots of things like that that we haven't even gotten into yet that We'll see coming together.

Speaker 3: 40:48

Yeah, yeah, you know, and and I do hear occasionally, you know there's always the thoughts of the concerns that come from this right, like are people gonna lose jobs over this because the tools are so good and do things? And you know my, my counter example to that has been kind of too fun. In fact, we talked about this on a recent episode of my podcast, too, about. You know, this is like is this one of the gotchas, right, that people are gonna in the design side of things? Are they gonna lose their, their jobs? And you know, we all kind of came to the conclusion here's the analogy and think about social media managers. And, historically right, you know, think of any social media blunder that a brand has had, where you know they posted something in and the world looked at that and said what were they thinking when they put that never should have passed Anybody's approval process right to get posted. And you know, and more than likely you know, what probably happened is you know they had an intern assigned, or someone right, as the temporary social media manager, because you know, yeah, we needed somebody, is somebody who's Gen Z, to come in and run this Twitter account for us. Well, just let them run with it. And they thought it was fine, you know.

Speaker 3: 41:55

But so the lesson is, if you have an approval process For anything that's generated right, even even as basic as social media content, well, you probably have an approval process and your design processes too, right?

Speaker 3: 42:08

So, just because now you're inserting these AI driven tools to automate a big chunk of that process and to make what would have taken your Designer two weeks to now take maybe two hours. Would you automatically throw away the approval process just because it was automated, or would you still want to use the same approval process? Right, because, if you think about it, right, okay, two weeks to do the design, it was probably a two-day approval process after that. Well, if you cut the two weeks and reduced it to one day, right, and you still have the two-day approval process, you're still coming out ahead, right, it's still now eight days versus what could have been three weeks, so why would you change that? So I, I think the I See why everyone you know has the concern that maybe there's a risk there, but I don't think, you know, there's a reason why people should just throw away all the checks and balances just because we've automated the process.

Speaker 2: 42:57

Yeah, no, I agree, I think people said the exact same thing when we came out with self-checkouts and there's still some debate out about that right now. But you know it's. Is that gonna steal jobs? Are gonna take jobs? No, it actually helped move those associates.

Speaker 2: 43:10

Um, in the perfect world and I'm speaking in the you know, in the desired circumstances would be that those same people that were standing there having to scan all day they're now stocking the shelves, they're getting you know, they're moving the back room freight, they're helping prepare grocery takeout orders and things like that. So you know, I don't think the AI is necessarily going to kill off all the jobs. I think it's going to kill off some of the jobs that probably could easily be repetitive and just not in this.

Speaker 2: 43:37

Right, right, and do we need those jobs for people? Yeah, some, absolutely. But at the same point, I think it's going to force us as a society to get better at some things that we've obviously ignored for a while. You know, right, and so there's always going to be human component to understanding how the technology runs, how to fix the technology, how to take care of it. You know, so you think of, you know, early cars, early automotive stuff, and now you know well, all this computer's going to fix everything, it's going to change everything and we're not going to have the same mechanical issues.

Speaker 2: 44:11

Well, now we have different mechanical issues. So you know it's going to create jobs, it's going to lose jobs. In the end, it's probably all going to be a wash until the robot overlords take over, and then we don't have to worry about it. Right, exactly yeah.

Speaker 3: 44:25

I mean I look at it as you know, coming from, I'm the technology guy right, so I've always been looking at this from the retail technology side. But I think if there's one thing that you know I've learned over the years on the technology side is that no matter how good the technology is, the most important factor is the human factor that goes with it and how people are going to use it. Yeah, I mean, I've worked with so many retailers and putting in new technologies in stores, for example, that were a total fail because they never once talked to the store teams to understand how are they going to use this? Would they even want it? You know that was people deciding at a corporate level that we want to push this out because we think it's going to save time and therefore store associates will spend more time helping customers.

Speaker 3: 45:10

There was one brand I'm working with in the UK in a previous job where they wanted to roll out tablets to all the store associates to help them work with customers to select different products, and this was one of the key examples they had was mobile devices, right, customers coming in, they didn't know which mobile device to pick, so they came up with a custom app that was going to let an associate walk through a series of questions, help the customer figure out exactly what would suit their needs, which I mean honestly. That's what the associates were doing anyway. Right, they were just doing it verbally by helping the customer yeah, just scream like it.

Speaker 3: 45:46

The marketing team at corporate thought you know, if we push this out they're going to do it faster, and by just looking at the numbers, that means probably on average, each associate could work with five times as many customers in a day, and that's going to mean we're going to sell more mobile devices. Okay, sounds great on paper, right? Yeah? Then they roll it out and after a few months they found out nobody was using it. They were just sitting in a shelf somewhere. They were shoved under the counter.

Speaker 2: 46:13

None of the store teams wanted to use these devices and Was that just a rejection of technology, or was it because the humans were doing a better job with the relations?

Speaker 3: 46:21

Well, it's interesting.

Speaker 3: 46:22

So it was something they had not thought of, but it turns out.

Speaker 3: 46:26

So what happened in their case is that app that they developed to run on the tablet, right, it had to connect back into the cloud, right into a, for all the data into run the app. Well, it turns out that at some of the stores the connectivity was so bad at sometimes a day, that the app would get stuck or the associate would be standing there holding the tablet with a customer just kind of tapping their foot, waiting for it to respond, a few seconds going by. And it's one of these things we're on paper if you tell them well, it's taking three seconds to respond. Well, three seconds doesn't sound like much, but when you're the store associate standing with a customer and you're waiting three seconds and nothing is happening for three seconds, that's like the most awkward thing you can imagine. And I think this is probably one of those cases where, if you haven't been the store associate and worked in retail, you can't conceive of these awkward delays, right, and customers getting irritated at that point, right, and they're more likely to walk away.

Speaker 2: 47:22

Well, because you're not able to immediately address it. And it's funny. You mentioned the three second thing, like I think of you and I. We relate really well in the world of podcasting, right? So if you're editing a podcast and you come across three seconds of silence in the podcast, what do you do? You trim it out, you get rid of it, right, you skip that section. Well, it's only three seconds.

Speaker 3: 47:41

It's only three seconds, but yeah, it's three seconds.

Speaker 2: 47:44

But it's three seconds that this person is sitting there listening and they're dead air for, and then you come back. What was that? What was that? So, obviously I got somebody's attention just then because they thought they're.

Speaker 3: 48:00

So it was the same thing. So that ended up being. That was like 90% of the reasons why the story teams didn't wanna use this new tool is because it wasn't reliable. They didn't know if it was any given time, would it work or not.

Speaker 2: 48:12

Yeah, it wasn't necessarily the app itself or the database itself, but it was a connectivity for them.

Speaker 3: 48:19

Yeah, it was a connectivity.

Speaker 2: 48:20

I control that.

Speaker 3: 48:22

They ended up realizing that, you know, across the thousand locations they had, they probably had I don't know 20, 30 different types of levels of connectivity, different levels of bandwidth, and there was no consistency in the performance. And sure enough, what happened? And this is probably the number one technology lesson I tell every retailer I ever talked to Every time a retailer rolls something out right, what's the first thing they come up with is they say, well, we need a test store to try this out. Right, and maybe they'll do five test stores. Well, again, that sounds wonderful on paper, but what I've learned is, nine times out of 10, as soon as a retailer says I'm gonna use five test stores, they're going to a go-to list of five really friendly stores that are used to all the playing around with the latest and greatest testy thing that they don't know if it's gonna work. And they're okay with that. They've got experience working with that.

Speaker 3: 49:16

They're already adaptable Exactly, which means any problems that come up they just adapt and they don't become problems.

Speaker 2: 49:22

They're not, naturally, because, and then it's not an issue. And then they go they'll hand that same technology off that flew, perfectly, but then in that store and they hand it off to a lesser equipped store or maybe someone who's a little less staffed or something else like that. That's interesting, well, cool man. Well, I know we've definitely had a great conversation today, thoroughly enjoyed this. But if let's go back to you really quick on one more thing, if there was one thing, obviously, thinking back along your journey, you've learned a lot along the way, right, you've experienced a lot of different things, a lot of different settings, different organizations, technologies, all of that, what would you say is kind of a big lesson you've learned along the way. Is there something about yourself that kind of? Maybe this technology journey for you has revealed that you could share with us?

Speaker 3: 50:19

Yeah, honestly, probably the biggest thing that I've found is again even though I'm coming at this always from the retail technology side that the most important factor comes down to people and relationships between people, and I kind of looked at that different ways.

Speaker 3: 50:37

So, for example, as the technology provider, I'm always working with people on the sales side trying to sell this technology to retailers, and every technology provider wants to talk about what's the wonderful outcome that a retailer is gonna derive by using this technology, and that's great and I think that's important that what really happens in the end when that retailer decides that they want this technology, it's usually not because they've decided the technology is the best thing.

Speaker 3: 51:06

It's because the person they're talking to on the other end of the conversation, who's bringing this technology to them, is somebody they trust. And the reason they trust them is because they've built a relationship with them, which maybe that relationship started at a brand level because there was trusted content. Maybe it eventually became that it was a trusted salesperson, or maybe it's because they met people at a conference who worked on the product team and they felt like they got some inside knowledge on how it really works and what the conditions are that make it work well or not work well, and so they build that level of trust. So I always found that the technology can be as wonderful as possible, but whether it's gonna succeed in any given implementation really comes down to that trusted relationship between the people involved, whether it's the people on the retailer side, whether it's their IT folks, the marketing folks or people in the store level, and then the people involved on the vendor side. And if the relationship isn't there and it's not a trusted relationship, then no amount of technology is gonna fix that.

Speaker 2: 52:13

Yeah, no, I think that's incredible man. It's funny. I was smiling a little bit during while you were saying there and all I could think of was the scene in Tommy boy. Whenever they go out selling breakpads, you know, and Tommy goes on his mission and they're talking about that, one guy says she's like but do you have a guarantee? It's not on the box, it's got to be on the box, mm-hmm. And he's like but you know in the end, what, what goes that guarantee if you don't have the people behind it to back exactly?

Speaker 3: 52:37

So you know, exactly I think and it's in retail is a people business. There's no way around it. It is absolutely a people business.

Speaker 2: 52:45

Yeah, it's really cool man. Thank you if you could go back in time Parting thoughts on this. If you go back in time to whenever you're just getting going in this, is there One piece of advice you would give yourself as you? Kind of start this retail journey.

Speaker 3: 53:02

Yeah, you know, and again it all it comes back to this people factor. So I would say, you know, one of the things that I didn't pay as much attention to early on is how Relationships were built between retailers. You know, most people think the retail is this big, gigantic industry because the volume of commerce and dollars, right, is so massive it's such a huge portion of every country's GDP, right. But at the end of the day, when you get down to the people that work in retail, especially in the corporate offices in retail, it ends up feeling like a much smaller world and people know each other and so not paying attention to those relationships, not paying attention to where do those people find joy in what they're doing?

Speaker 3: 53:46

You know, and the best example I have is you know, there's a charity organization I've worked with over the years in retail called retail ROI. It's been around, I think, now for 15 years. I only learned about it Maybe seven years ago, seven or eight years ago, I suspect. If I've been paying more attention in the my early days, working with retailers, to those relationships and what people were doing and building those relationships, just but from retailer to retailer, I probably would have heard of this organization sooner, because there are so many retailers that are involved in it as their way of giving back to the world right from what they've been able to accomplish. So I think that that, for me, would be the the big thing is to pay attention to those relationships.

Speaker 2: 54:26

Absolutely, man. There's a great friend of mine Ted Rubin is his name, and I don't know if you probably know him if you've been in the retail space for a while, but he always talks about our on our man it's. Everybody talks about ROI.

Speaker 3: 54:37

He's like now it's our or yeah, it's always return Relationship, that's right. Yeah, he's 100% right.

Speaker 2: 54:43

Well, thank you so much, Ricardo. I really appreciate you being here. If people want to follow up with you anymore, would I assume, is is LinkedIn probably the best way to connect with you, or is there a website or anything that they should reach out through?

Speaker 3: 54:56

Yeah, linkedin is the is the best way. I'm always on LinkedIn, that's the best way. You just message me there, you know. If you're always interested in knowing what I'm thinking about or talking about you, just I tell everybody tune into the podcast and you'll know exactly what I'm, what I'm most interested in at the time.

Speaker 2: 55:12

Hey man, that's great, and I'll put your LinkedIn and I'll put retail razors Website right down below here. It'll be in the show notes, so then that way people can find you. Maybe some point, man, I'll come over and chat with you a little bit.

Speaker 3: 55:24

Yeah, absolutely over there.

Speaker 2: 55:26

But now we'd love to do that and, like I say also, I've started adding this in here at the end of everyone, because if you do reach out to Ricardo on LinkedIn, please, please, please, don't just send him a neutral request. Make sure and a where it says add a note. Do that and just say hey, I heard about you on the retail. Our podcast Would love to get to know you better. Thanks so much, something like that, because that way at least it lets him know you're a real human being and you really heard it. As of right now, you could still be a human being. I think give us another year and I'm pretty sure we'll have a eyes. We'll have a virtual assistant for like $4 a month that automatically connects us with all of these things. So, all right, man, well, we will. We'll see you soon here and thanks again to everyone who has tuned in.

Speaker 2: 56:16

If this is your first episode of the retail wire podcast, be sure and mash that subscribe button. Also, you can find us. If you want to see what Ricardo and I look like, you can head over to our YouTube channel. I don't know, they might want to see what you look like. I've got the face for radio, so don't worry about it. But you can head over to our YouTube channel and find us there. All these episodes are on there. But be sure and leave us a comment. Tell us what you thought of the show. If you have any questions for Ricardo or myself, leave a comment in there. We'd love to answer and would love to get back to you on that. And who knows, you might even see or hear that red on a future episode. So we'll see you next time here on the retail wire podcast. Have an awesome time. We'll see you soon.

Speaker 1: 56:59

Thanks for tuning in to the retail wire podcast. We hope you enjoyed the episode. Be sure to subscribe to us on your favorite podcasting platform and leave us a comment for a chance to hear it read on the next show. See you next time here on the retail wire podcast. You.