Whether you were stepping onto the store floor in 1884 or 2021, there was one element you could count on being major part of your shopping journey - point of sale. In this episode I’m joined by David Wilkinson, President of NCR Retail for a fantastic discussion on the many innovations occurring in the retail space and the drivers behind them. COVID has been somewhat of a blessing and a curse; while it’s been difficult for us all to adapt to this new abnormal, it’s shown many retailers that in Bruce Lee’s words they need to “be formless…be shapeless like water” to adapt to retail in the modern age. We look at the different strategies companies across the world have utilized to become more agile in their POS and eCommerce integration , a MUST during curbside COVID.
Welcome to the The Voice of Retail , I’m your host Michael LeBlanc, and this podcast is brought to you in conjunction with Retail Council of Canada.
Whether you were stepping onto the store floor in 1884 or 2021, there was one element you could count on being major part of your shopping journey - point of sale. In this episode I’m joined by David Wilkinson, President of NCR Retail for a fantastic discussion on the many innovations occurring in the retail space and the drivers behind them.
COVID has been somewhat of a blessing and a curse; while it’s been difficult for us all to adapt to this new abnormal, it’s shown many retailers that in Bruce Lee’s words they need to “be formless…be shapeless like water” to adapt to retail in the modern age. We look at the different strategies companies across the world have utilized to become more agile in their POS and eCommerce integration , a MUST during curbside COVID.
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I’m your host Michael LeBlanc, President of M.E. LeBlanc & Company, and if you’re looking for more content, or want to chat follow me on LinkedIn, or visit my website meleblanc.co!
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Michael LeBlanc
David, welcome to the Voice of Retail podcast. How you doing this afternoon?
David Wilkinson
I'm doing well, Michael, thanks for having me.
Michael LeBlanc
Well, you're fresh off the virtual stage, so to speak at the at the NRF Big Show. What a weird January, right? I mean, it's the first time in, I don't know, maybe 20 years, I haven't been in New York City in January, I mean, the whole month feels weird. It's like I'm discombobulated. What about you?
David Wilkinson
It has been crazy. I mean, they think about January for us, it would be doing kind of year beginning meetings, in person, NRF, all the prep sessions that would go with it. And, honestly we had, we had all that stuff in the bag, and we're doing it all remotely and virtually. So it was on one hand, maybe nice. But on the other hand, very strange. So yeah, I agree with you completely.
Michael LeBlanc
Did it work out okay for you? In other words, you know, I know, these events are big, big opportunities to get all the customers in one place at one time with all your top leadership, thought leaders. Did it work out okay? You know, was it 80% of what you had hoped? And maybe it's a good for now, but you wouldn't go, you wouldn't do this permanently right? You wouldn't, you wouldn't shift to this kind of model?
David Wilkinson
Yeah, I don’t for things like the big show at NRF, I don't know that this would be a good permanent replacement. I would tell you that, you know, I won't say I have low expectations, because the team puts a lot of work into creating content that can be consumed in the world that we live in. But I think that, you know, the I think the attendance is hard to consume the kind of content that we have. So I think a lot of people tried really hard. And, I don't have a bunch of the feedback back yet. But I would tell you that you know, I don't think this is something that this will supplement things it won't be here to stay long run is my opinion.
Michael LeBlanc
Yeah, well, I guess if the consolidation is, the conciliation is that everybody's got to do it. So, it's not like you're an outlier and people will be talking about the way NCR did. It's like everybody's got to do it. So yeah, we'll get through it, right? We'll get through. Well, let's, listen let’s jump into a little bit, a little bit about you. Tell us about your background and your role at NCR.
David Wilkinson
Yeah, my background, I've been with NCR about 11 years. Join, and before that I was in technology, the technology space, networking, telecom, other areas of technology. But you know I actually started in finance a long time ago. So I would, I would call myself a Texan. I'm not, I was born in the state of Ohio but moved to Texas, I say as soon as we could get there and went to did my schooling in Texas and started my career in Texas and then moved to Georgia, to here to Atlanta for with NCR for the headquarters and really was doing a lot of different things within NCR, whether it was working with our channel programs, or we did a cloud point of sale startup inside of NCR and then the last five or six years I've been in our retail division working in the best segment of the industry, ever.
Michael LeBlanc
Well, some listeners might not even know National Cash Register, right? I mean, tell us about the NCR, the both the rich, rich heritage in retail and the company that it is today?
David Wilkinson
Yeah, that's a great question. I mean, you do think of NCR, National Cash Register, you think of the old brass ease and the big cash registers and get a receipt and all those things. But you know, we've come a long way. I think about NCR today with our three primary businesses. We have retail, consumer banking, and our restaurant business or hospitality business. And so you think about what we do is that if you're a consumer in today's environment and you go to an ATM or an automated, some sort of an automated interactive teller machine; you go to a restaurant and do order-and-pay at the table; you go to a retailer and you self-checkout; you're touching NCR equipment. There's a good chance that the transactions that you do at the bank, whether it's digital banking, because we power a massive digital banking, the one of the largest digital banking platform. So, if you're transacting with a bank, a restaurant or retailer, you're likely interacting with NCR software. And we provide the services to make sure that that's all available and up and running. And we have some purpose-built hardware to run that. So, we're a very different company, a software and services led company, but really creating outcomes and running banks, running stores and running restaurants.
Michael LeBlanc
Now, global footprint, is there any country, I guess it's easier to say is there any country you don't operate in? or give me a sense of that?
David Wilkinson
You know, we're we are a global company. You know, we predominantly, you know, we'll say, across the enterprise 60% of our business would be kind of North America based and 40% would be rest of world. But yeah, we're we are a global company. For large measure, yes.
Michael LeBlanc
All right, well, let's talk about the before time, pre COVID. It's almost getting hard to remember. And if you and I were sitting down at NRF, this time last year, tell me and the listeners a little bit about how you were thinking about retail, because in my mind, there's things that the COVID era has accelerated, and there's some new trends it’s created. But as you looked ahead to 2020, and where I'm going with this is kind of understanding what's changed, but what we what and how are you thinking about the big trends in retail?
David Wilkinson
Yeah, we it's, it's a, it's a fun way to think about it, how are we doing? Or what would we have talked about at NRF. At last year NRF as NCR we were unveiling what we were calling our next generation retail store architecture. And the whole conversation was that the technology trends in the store happening so fast, that for you to be able to consume as a retailer and your store the technology needed to serve your consumers, you're going to have to change the way you do technology. And because you have to adopt it so fast. And it's and if you try to roll out technology, in the same way that you've done in the past, it was too expensive. So we talked about how we're changing the cost curve for retail technology, with our platform approach virtualizing our in store infrastructure, and then the cloud based applications. So that's the conversation we would have had, we would have said “hey” the consumers, there's a labor crisis in your store in terms of you can't get enough people to do the right things that you want them to in the store. And or, it's prohibitively expensive, and then your consumers are demanding much more from you. And you're seeing a bit of a shift to online. That's what we would have talked about.
Michael LeBlanc
Well, you know, fast forward, it's funny, I had an interview with Darrell Rigby from Bain, and he's got this great new book. Doing Agile Right. And we just talked about the philosophy of being more agile. And I, you know, I was with Hudson's Bay Company back in the late 1990s, 2000s. And I remember I had this great idea for a custom message that was brought down and printed on the receipt based on our loyalty program and everything. Everybody said, “Oh, that's a great idea. See you in 18 months cause our next release is 18 months and yea you okay, you're in the next release”. Like these big massive releases, because you know, listen, you work your the heartbeat of the store item, if the POS isn't working, you're out of business. So it's a very, I imagine it's a very, I call it sensitive, but very high profile and very high risk in some ways to mess with your POS. So, you must have been getting a lot of feedback around, you know, geez, were a little worried about how fast we go. Because if we break it, it's a big, big problem.
David Wilkinson
Yeah, absolutely. Absolutely. And you nailed it. I mean, these projects were long and you know, the outcomes seemed simple. And now you've been on the IT side, that was one thing, but now put yourself in the in the store ops shoes, or the merchandising team or the marketing team, or the brand experience team. And it's hard to move that fast. And I think you're right that, you know, what we're trying to do is de risk that and say, you know, it's not, it's not about a rip and replace, because it is the heartbeat of the store. The ability to do, and we all joke, I will say scan, scan, total, tender is not, its core to what you do. It's complicated, but it just has to work. So, don't mess with that. And then I have to bolt on all these other experiences. And I need to do it quickly. I need to be able to test, I need to be able to fail fast. And I need to be able to create an experience to my customers that's differentiated. Because that's really where retail has to focus. That you know, gone are the days of, you know, inventory, assortment, style, size, color, availability, that's kind of almost table stakes. And now it's about the experience.
Michael LeBlanc
Yeah, right now, let's talk about the experience a little bit this self-serve and you know self-serve, I think you're in that game are you self-serve checkouts? Or if you're not, I'd love to hear your opinion about it.
David Wilkinson
We are the global market leader of self-serve checkouts.
Michael LeBlanc
Alright, so they're nothing new. I mean, I remember projects I was on for Store of The Future, in like 1999, where we're doing self-checkout. So you know, it's one of those things if you get it right, you've got the spectrum of the kind of Amazon, you know, shop it like you stole stores. You, I was looking at the new Kroger, checkout cart. And you know, there's all kinds of playing around this concept of self-serve. But what's on your drawing board? How are you thinking about? I know there's I talked to my friends in loss prevention and they're trying different things. Canadian Tire in Canada, a retailer in Canada actually scanned in hundreds of 1000s of pictures so people couldn't ticket swap and a picture would appear of something they were scanning. So, all kinds of activity and energy happening around self-serve. How do you how do you see it and where do you see it going?
David Wilkinson
That's a, it's a good question. I mean, we see that trend increasing. You know, obviously the pandemic has heightened awareness both labor again, labor shortages and just safety, employee and consumer safety. Well, I think will drive increased adoption of self-checkout, even though the research now will tell us it'll grow kind of unit volume and unit penetration at 8 to 10%. You know, year on year over the over the next handful of years, it may even grow a little bit faster and start to expand into new domains outside of just grocery and big box and maybe into convenience, and maybe even into soft goods and specialty.
But you hit it on the head, I mean, the technology itself, the ability for a consumer to interact with a device, or bring their own device or have another purpose built device that they can scan in the store themselves, create a basket of goods, pay, and leave the store. That notion will continue to grow. Where we have more of an unbounded ability to check out. So, we've always had this bottleneck in the store, you got to come to the front of the store, check out and there has to be somebody there to help you. It's like, well, why you could check out all the way throughout the store, you could have a self, a self-service checkout. So, we are looking at new ways to kind of break apart the software side of that and the technology to say, okay, we can build a basket in the way the consumer wants to build a basket. You can do it yourself with your mobile phone. You could just shop as you would and then self-scan. You can pay with cash or credit. You can have a cashier check you out, whatever it may be.
And then to your point, what are all the problems with that? Well, the big barrier is already the customer experience and shrink. And so what we're leveraging are technologies like you described, computer vision will be a big part of the frontier. We have similar sets of technologies that will allow us to identify items where you, if you put a bottle of wine, if it's available in a grocery store on a scale and call it a banana and then try to weigh the bottle of wine as it were bananas, it would catch that because the scanner is just an optical recognition device that can see that that's clearly not a banana based on a low, a low number of pixels. So, things like that. Things like the ability to watch behaviors from either cameras, the existing security cameras and the scanners to see how items passed across and consumer behaviors to flag suspicious behavior in the store just based on what's happening. So, we got to solve the shrink problem. And then on top of that, you can't have, you can't have interventions to customers, if I have age restricted items, or if they're having problems scanning, and you have to be there to help me find a big part of that is what we do is help consult in the store around what's the experience needs to look like? How do you train your associates? And then what's the ultimate layout of the store need to look like to drive the throughput and the and really the experience that you're trying to create?
Michael LeBlanc
Is there any future in taking that experience to where once was thought about RFID? Where you could just like look, throw a basket through a scanner and, and 100 items would instantly get scan? That's, you know, of course you need RFID tags on the product, but can machine vision start to get there where I start just running items through a conveyor belt in a self-checkout? And I don't have to mess with it. And it's all machine vision. Is there a future there?
David Wilkinson
Yeah, I think there is. You know, it's a, we've done some pilots with some early technology. And then we've got some other more of a kind of a small basket, convenience pilots that we're running now. So, the answer is yes. There are limitations, you know, we think about a store today and the limitations, can you know, if you could throw enough cameras and technology at it, you could do whatever you wanted. It becomes a little bit prohibitively expensive. So, you know, we, yes, that the short answer Michael, is yes, we can do some of that. Or, you know, obviously, the answer to the question is digitizing every item in the store. Like you said, “what does that mean?” Is it an RFID tag? Or is it an optical recognition of it? Is it a, you know, the Digimarc Barcode? Is it the you know, some other way to know that, you know, there's a yes I think will increasingly create a digital recognition capability for each item in the store. And that will enable new checkout of the future. You know that's I think that's the evolution of where going but which side wins is the, is the hard part.
Michael LeBlanc
And, well let's follow that thread a little bit. Let's, as we like to say up here in Canada, we like to as Wayne Gretzky always used to say “I would skate to where I think the puck is going to be”. So, what's your advice to retailers listening around where the puck is going to be In terms of POS? We see lots of cloud based, as you've mentioned, agile principles and concepts, though, what are the three things you think, you know, three pieces of advice that retailers should get ready to think about?
David Wilkinson
It's a great, another good question. I that, I had a conversation with a very large retailer, they happen to be in the in the UK and they said they had some advice from somebody that said, “Man, if you were trying to make a switch in technology five years from now, it would be so much better”. And it's kind of an odd way to frame it. It's like what, well why? You know, it's like yeah, you’ll wrestle with the same problem. So, when we step back to that I say, you know what you have to do right now is well, what I would advise is one, you gotta take a platform approach. So, you have to create a platform that allows you to extend through things like API's or open ecosystems that allow you to do community sourcing and leverage common capability models that are being used across the industry. So, there's a lot of investment going into startups, retailers are investing in their own applications, you've got to create a unified platform that allows you to do that.
Michael LeBlanc
Like a broader ecosystem, because there's also concerns. And we've seen that in the past where the POS can be a point of failure in terms of cybercrime right?
David Wilkinson
Right.
Michael LeBlanc
And so you've got to be very careful how you build that ecosystem out, right?
David Wilkinson
Yeah, absolutely. Absolutely. And that's why we’re taking that platform approach to allow both for security and extensibility, and flexibility. So, I think that's one key, I think the other one is you got to, you've got to find a way to harness all the data that's flowing through your system to drive personalization. I mean, we're finding there's so much data flowing through the systems today that isn't used and could be leveraged to create a rich customer experience. Think about online buying, I don't call it online shopping, online buying is easy. I can go onto a website, buy something online. Online shopping is not that much fun. Because it's hard. I can't see everything. I can't touch it. I can't feel it. I can't see it, you know, all the things that…
Michael LeBlanc
It's hard to be inspired right? It’s hard to be inspire…It’s the one thing that, you know, it's very efficient, you can't beat it for efficiency. But inspiration there’s nothing like a great associate with a prospective, right or whatever.
David Wilkinson
Yeah, exactly. And you think about what makes it, like you said, so efficient on the online side is, you tell them who you are. You tell them what you've bought in the past. They know what others like you have bought in the past, and you have stored payment, right? If you could put that, take those items and elements and put them into your store and greet, “Hey, Michael, welcome back”. Or on your mobile device, “I know you're in my store, I see you shopping, you know, you're buying pasta sauce, you want mushrooms and your spaghetti tonight”, and offer for fresh mushroom, you know, there's some things that we could do to make the in-store experience feel
Michael LeBlanc
Richer, richer, right? More experienced, more experiential. I mean, we all, we all in our industry, you and I've been around for a long time and kicked that experience word around to death a little bit, right? But you really got to get your arms around, what does that actually mean in your in your world right?
David Wilkinson
Yeah, so I think that's the, that's the key and no, and kind of bridging that experience. And we just, you know, the beginning the year, we bought a, we bought a company called Freshop to extend our e- commerce platform. So now we have the grocery buying online, pick up in store. So that's really just the extension of how do you create that the start of that experience, and stretching it into the, you know, into the store? So, you know, I think that's the, that'll be the key. And then I think the third piece is, you know, it's got to be this notion of inclusiveness of the technology. So, you know, you think about like I have a mobile application, if I force you to download an app on your phone, to have a good experience, what we find is that, you know, you know, this, like we said, we've been around a while, we know app downloads are not for specific retailers, the percentage penetration is not that high. And so you've got to find a way to make your technology inclusive and allow people to participate the way they want to participate.
Michael LeBlanc
Yeah, it's a great point. There's a Walmart Store of the future here in Toronto that has the thing you described earlier in your discussion where you can, you can take an app, you can scan, put it in your cart, and there's a bit of a process at the end. But I was sitting there watching the store, and this is pre COVID. Anyway, and you know, there's about of 30% of people in line full-serve, 30% or 40%, 50% I’m bad with math today, in self-serve, and almost nobody doing the this full checkout. And it was a great experience like they even Walmart at the time, they were giving discounts Hey, check out with this product where you get 10% off. This adoption thing. It's easier to, easier to say than do right? I mean, changing customer behavior is no easy feat.
David Wilkinson
And you don't want to alienate those customers that you know if that's the only way you can check out and have the best experience and is only 5% of your shoppers. What did you actually accomplish?
Michael LeBlanc
Yeah, yeah, that's a, that's a really great point. So, listen to picking up on that last thing. Last couple of questions is this whole, changing consumer behaviors. I wonder if your perspective, there's retail has changed…there's no question retail has changed during the COVID era. And I'm curious about your thoughts about which of those changes though are structural and which are adaptations to the world we're living in? And that is starting to help get my head around the strategic implications of the COVID era in both consumer behavior and all these other things. What do you think falls in that this has changed, this has structurally changed versus temporarily change, any thoughts on that?
David Wilkinson
Yeah, we think a lot about that. I mean, this is really what drives our future investment in our products. You know, I think the real crux of that question lies in the consumer and their experience. And it's really about things that are convenient, and are driving convenience, value and flexibility for the consumers. And the things that are kind of a pain or creating barriers or friction in the consumer shopping experience today are going to go away.
And some examples of those things are, you know, again, the ability to buy online or starting to order online and pick it up in the store or have it delivered to your home. We see the trends of online shopping, specifically for things like grocery, that haven't really had a high penetration are expected to grow in the coming years.
And, you know, just the notion of then demanding that your online shopping experience has the same promotional elements, the same experience elements of how do I then blend that with the ability to pick out things like produce meat, flowers, other things?
So, I think that those are things that are here to stay. And I think we're all going to be wired for this generation to be a little more spatially aware, forever. And, and we're the thing like plexiglass in the stores may go away, but we're gonna have to think about, you know, widening the lanes or broadening lanes and thinking about the way a store is laid out differently because, quite honestly, we've just done it the way we've done it forever, because that's the way we built stores.
Michael LeBlanc
I think back to that was the name? Paco Underhill had that great book about shopping and he called it the butt rub phenomenon. If you touched another shopper in an aisle, you both just left. And so, he was kind of advising people to build bigger aisles. I think that's just going to be as he said. I think that's just gonna be… if anybody's sneezes near you, you're gonna have, you're gonna have a fit. Great discussion. Let's, where can people go to find out more about the kind of work you're doing or get in touch and, and get a sense of that?
David Wilkinson
Yeah, you could, if you're if you're trying to figure out what we're doing come to, you know, come to our website, ncr.com. You can follow me, I try to post things on LinkedIn. You can and then but you can find lots of things to follow on ncr.com. So that's, really the place to go.
Michael LeBlanc
Alright, well, David, listen, it's been great to chat with you. Such a great rich history and you're really at the heartbeat of stores, so of stores and beyond. So, it's really wonderful to catch up with you and thanks for taking time to be on The Voice of Retail podcast.
David Wilkinson
Yeah. Thanks, Mike. You got a great podcast. Appreciate you having me on.