Ricardo Belmar: Simplifying Retail’s Complexity

Retail technology often gets lost in hype. But what does it actually mean for leaders on the ground?

In this episode of Retail Leadership with Steve Worthy, I sit down with Ricardo Belmar, Producer and Host of The Retail Razor Podcast Network.

We cover:

• Why “perfect test stores” can hide scalability failures
• The difference between replacing tasks and replacing people with tech
• AI’s real challenge: implementation and process readiness
• The skills leaders need to guide retail through the next five years

Ricardo’s perspective cuts through the clutter and gives leaders a clear, practical lens for technology, leadership, and the future of retail.

📍 Connect with Ricardo: https://www.linkedin.com/in/rbelmar/
🎧 Listen to Ricardo on Retail Razor -  https://retailrazor.com 

Transcript

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SPEAKER_03 0:50

Our guest today has been someone that I have been following for a long time. Whether it is their posts, their contributions to their to the retail industry, their podcast, which is the retail razor, all of those things. We have crossed paths in so many different ways. And finally, I'm able to get Ricardo Bellmar on the Retail Leadership with Steve Worthy podcast. I'm super excited for everything that he's going to share with you. Also, pay attention. Pay attention to the five records that Ricardo would grab if, God forbid, his house was ever on fire. It was just a really cool question. He's a lover of music, and that's something I didn't know about him. So super excited to have him on the show. Get ready for a so get ready for some amazing insights from Ricardo. Super excited to have him on the show. Let's go ahead and get started.

SPEAKER_00 1:46

Welcome to Retail Leadership with Steve Worthy, where we go well beyond the corporate playbook to unpack major opportunities, hidden challenges, and critical issues that senior retail leaders face every day. So let's get started right now.

SPEAKER_03 2:18

And the retail world. I've admired your podcast, which we will talk about here soon. And then all of the content and ideas that you put out there into the retail space. But for those who do not know you, could you do a quick introduction of who you are?

SPEAKER_02 2:33

Yeah, absolutely. Absolutely. For those that don't know, I'm Ricardo Bellmar. I'm currently at Microsoft leading partner marketing for retail and consumer goods across the Americas region. And for which I know sounds like a mouthful, but for everybody who's wondering what does that mean? It means I get to work with a lot of great partners that Microsoft has who are all working in the retail industry and how they all have solutions that are built on the Microsoft platform. So I help them go to market and do a lot of joint marketing activities that way. But so then before that, I pretty much have been working for different organizations in technology selling solutions to retailers. In some cases, they were managed services, sometimes they were just technology products for things like performance management and for technology in stores. Sometimes it was back-end things like data security that for the last two decades or so have pretty much always been involved in delivering technology in some way to retail organizations. So that's how I've got into the deeper into the retail business in that sense, because I've been just in and out of it in different organizations and along the way got to work with a lot of really interesting retailers. And so I I've always had a feel for, in that sense, like what it means to work in a retail store from that perspective, and ranging from the little quote little, right? But the little things like when you have the difficult customer to work with, or when the systems in the store aren't working and you get stuck in who do you even call? What do you do? To there's a visit coming up from a district manager, is everybody ready? And everyone panics, all of those kinds of things. In those days, and I'll be dating myself, right? But the technology was limited. You really you had a point of sale system, right? And you had some amount of equipment that you use when you did inventory every year, right? But there wasn't a whole lot to it. It was even early days for having what things I think we all take for granted, not like having guest Wi-Fi in a store. That was still new. So that was my original taste of retail. Parallel to that, you asked me like what got me into technology. So I suppose I've always been a little bit of a fan of technology since I was a kid, anyway. Originally, mostly just because of music. I've always really had an appreciation for really high-end music equipment. My my theory is always that life needs a soundtrack, and you want that soundtrack to sound good. So you better have good equipment to play it on. And that's always been my philosophy from that. So that actually is what led me to study engineering in college. So that's what kind of what got me into technology. So now you're probably wondering how in the world did you ever get this intersection to happen? So in in one of my early jobs, the company I worked for, it just so happened. They were a managed services provider, mostly for things like data connectivity and communications. But believe it or not, their first customer in the US was Walmart. And they were Walmart was the first retail store in the US that actually put satellite dishes on the stores for data connectivity. And original intent, obviously, just to connect point of sale. And from there, that became that was like the bread and butter business for the company I worked for. And retail ended up representing almost half of their business because everybody wanted to follow Walmart's example. And so figure if Walmart did it, then this must be a good thing, right? So that's what got me involved there. And at one point in that company ran the product management team, and we were tasked with coming up with new managed services specifically for retail. We were doing data connectivity. We said, you know what, retailers need data security, so let's try that. We introduced what we called managed guest Wi-Fi services. So we put the Wi-Fi into a lot of retailers in those early days as part of that function. Then we even did voice connectivity for retailers. We had distance learning systems that we deliver for training. So we did a lot of training systems, and then we were one of the early folks involved in digital signage. So one of those stories I like to tell people, we all get excited about retail media now. In my mind, well, retail media is really just what we used to call digital signage in stores. And it's just that nobody had the crazy idea that you could turn it into a media network. So if only we had known that then, we probably would have sold more.

SPEAKER_03 6:30

True. Very true. Very true.

SPEAKER_02 6:31

Yeah. So yeah, so that's what got me the intersection there, because they ended up just having a team that was working on building those kind of solutions for retailers. And retail represented almost half the business. So that's why it became an important piece of it. And I always think one of the interesting things that I think worked in my favor probably is because a lot of the other manager folks I worked with had never worked in retail themselves. Yeah. When we would have these conversations in the business of well, like, why should we do guest Wi-Fi as a service for retailers? Why is that a thing? Everybody has a cell phone. Why do they need Wi-Fi in the store? And like, well, there might be some reasons. If you're the retailer, maybe you want them on the network because then you can do things, right? You can you give the have an uh ability to track movement around the store, right? So you might get some interesting analytics that way by knowing where people are going. Maybe you want to deliver an app, right? A mobile app to the customers that has some unique in-store functionality. And it turns out cell phone singles don't always work in a store. Depends on the store. We used to joke in those days that if my favorite example was like most Target stores that I went into, I would tell the team, you know, I don't know what the construction materials are in a lot of those stores, but I I gotta tell you, every time I go into the ones near me, cell phone never works. Never works.

SPEAKER_03 7:46

Never works. No.

SPEAKER_02 7:48

So we got to sell those guys Wi-Fi.

SPEAKER_03 7:50

Yeah, yes, yes, yes. Yeah. You probably sold some of that Wi-Fi to me when I worked at Target. We were just starting with putting Wi-Fi into store. Yeah. And that was the biggest, one of the biggest moves that that we did during that point in time. So we're gonna get back to this technology thing. But I you you said something that I just couldn't gloss over, right? Your your love for music. The love for music. Yeah. Yeah. So this is a question, of course, that not that I didn't send you, but you're a pro at this. This is off the top of your head. You're, God forbid, your house is burning down, and you gotta grab five albums for the rest of your for the rest of your life. What are the what five albums are you are you grabbing?

SPEAKER_02 8:35

Oh, that's a tough one. This is probably where I'm gonna think to myself, it's a good thing that everything is digital now and I just have to grab my iPhone and I'm set. We're talking vinyl.

SPEAKER_03 8:43

We're talking vinyl here.

SPEAKER_02 8:45

Yeah, I know. Oh, what a base. That would be an interesting mix. So for me, my absolute favorite artist is Kylie Minod. So I would be grabbing one of her albums, probably her disco album from the pandemic years is one of my favorites. Just to have a different mix, I would probably grab a Gypsy Kings album. It would be another one.

unknown 9:03

That's so good.

SPEAKER_02 9:05

And then going a little bit back in time, I was always a huge foreigner fan. Yeah. So I'd probably grab a foreigner album. Oh. Let's see. Who else is one that I couldn't do without? I'd probably grab another kind of uh pop disco type modern stuff thing, something like maybe a Dua Lipa album or something like that. Yeah, yeah, yeah. And then oh, what is that? Four? Yeah. Fifth one would probably be another like more something going back a little bit, like maybe an Aerosmith or a Death Leopard album.

SPEAKER_03 9:30

Yeah, yeah. Oh, those are, man, those are good. Those are those are really good. Those are really good. I was with my daughter a while back and uh and the Nirvana song came on, so it was like Teen Spirit. And I just went, I just went bananas. I was like, this is my jam. She was just like, really? I was like, this was this is my jam. We played this in the locker room before we went out for basketball games and baseball games. That was our hype music. That song. I'm like, so you had me at Nirvana. And she was like, really, Dad? Now she can't get the song out of her. Ah, of course, yeah. Yeah. Great. Thank you for sharing that. I just couldn't I just couldn't pass that up. I couldn't pass up that opportunity. We'll talk about your the podcast here in a second. But so when you think about technology from back then, if you will, because I think, of course, everything has changed. Now everybody is the adoption rate has actually sped up more so than it did back there. But what are certain companies getting wrong right now as they start to implement more technology into their organizations? Because everyone wants there is no more first movers advantage. We used to talk about that all day long, probably up to 10 years ago. So there isn't that anymore. But what are companies getting wrong? I typically, what are they getting wrong? I want to know what are they getting wrong right now when it comes to thinking about the ideas of our technology to help them improve. Yeah.

SPEAKER_02 10:54

I think there's two, probably two most common things I see. One is has to do with how they get people in the organization to adopt whatever the new technology is. So when new technology decisions are made top-down without that buy-in, there's always resistance. And it's usually, I find it's usually not resistance because people think it's a bad idea. It's just something that's unknown and different. Correct. Think of it as in any role, right? If you suddenly get handed a new piece of technology with no explanation for why this is going to make things better for you, then you don't really feel like you have a lot of incentive to use it. Because no one's really explained it, right? It's just, it's almost assumed that, of course, we you won't, you wouldn't be given anything if it wasn't going to be good for you. But everybody wants to, and I believe, inherently feel like they're part of the process and part of that evaluation because at the end of the day, if you're the one using it, then aren't you the one who's contributing the most with that technology versus the people who made the decision to give it to you? So it's I it's a human nature kind of thing in my mind. But I think it's an important piece that gets overlooked in a lot of organizations. So trying to force that down, and I'll give you an example of that one. One retailer in the UK years ago, another company I was with, they were rolling out a new application on tablets for store employees to help customers decide between different products in a category. So the tablet basically was a homegrown app they came up with that was designed to kind of be used by a store associate to walk a customer through a series of questions and things to understand like which is the best fit product for you in that category. And of course, everyone at corporate thought this was going to be magic, right? They thought, oh, this is gonna increase conversion rates. This is gonna eliminate buyer remorse, right? Because people are gonna leave our store feeling like they made the best possible decision. And so they roll it out, right? And at some number of stores, right? Like everybody does a test, right? Everybody does a pilot test to see how it goes. And some of the feedback from store teams was, oh, that this is pretty useful. We like this. And then as they went to more and more stores, the feedback turned negative. And a lot of the store teams say, I like the idea as I'm using it. I don't understand why it got designed this way because it constantly freezes, it gets stuck, and I'm standing there looking like a fool in front of a customer because they can't make it work. So I'm just not gonna use it. Yeah, I'm gonna go back to doing it the way I used to do it. So that became a problem. And sure enough, part of the reason for that was because they designed this without any input from any of the store teams. They didn't add, they didn't go through an earlier test to see how would an actual store associate use this app and to make sure the interface was good. They made assumptions about that from a design perspective and then just handed it to them. So that's one thing. And then the second thing, and this actually example serves both of the points I'm gonna make. The second thing is that I see organizations don't think about is how does the app this new technology scale? Yeah. So by that, if you're a retailer with 500 stores and you're gonna put something in the hands of your store teams at 500 locations, that's a pretty big deal, right? That's not something simple. And it turns out, I would say 80, 90% of the time, when you try it out at one store and you figure out how to make that work, everybody is really pleased, right? Pat themselves on the back and say, okay, great, let's try it at 10 stores now, right? They go to 10 stores and probably works okay. Maybe there's a couple issues worked out and then it's fine. And then some places will say, okay, we did 10, let's try 25. And if that works well, we'll go to the rest of the store fleet. But oftentimes everybody gets so excited because of the benefit that this technology is going to do. You fast track that part and you say, it's working at 10, let's just go. We'll figure it out. And then the thing that gets overlooked in scaling these things is that despite I think everyone's best efforts to make a store as cookie-cutter as they can from one location to another, we all live in the real world. And in the real world, that unfortunately doesn't happen. Every place has some nuanced differences. And I'll go back to like those early Wi-Fi days. Things that people never thought about with Wi-Fi is what's the construction material in the store? Yeah. Is it going to block the signal in some way? One of the most revealing things with that, and this was again to scale, we worked with spent some time working with Total Wine. And when they first went to add Wi-Fi in their stores, they learned that you need guess what happens to provide the most signal attenuation to a Wi-Fi signal? Aisle after aisle of bottles with liquid in them. So they originally thought based on so Wi-Fi technology vendors were telling them, oh, your store is this square footage. We'll do the math. You need two access points, full coverage. Except that they didn't account for the fact that wine bottles attenuate the signal because of the density of the liquid. So as the signal goes, they found that there were bizarre dead spots all over the store when they tested this out and realized, you know what, it's not two access points, it's going to take five to do it because of the signal penetration. They say end caps were the worst because you had the strongest concentration. So if you were a customer walking through, suddenly you lose signal every time you get to the end of an aisle. So things you don't realize, right, when you're planning until you go to scale it out to multiple locations because they found right the layout of each store is slightly different. It's never exactly the same because you never get the build is never exactly the same footprint from store to store, no matter how much you try. So it's that that people factor and scalability are the two number two top things I find that cause things to go wrong.

SPEAKER_03 16:23

Yeah. It's interesting because you said a couple of things and I had one thought. He said work well. They roll it out to 10 stores, and they typically sell it works well at those 10 stores. And I always like define that, not to you, but for the retailer. What does that mean? Yeah. What does work well mean? And here's the point that I also feel that a lot of retailers get wrong, and even with the implementation, is because a lot of the implementation on a new technology is built off the fact that they assume every store is on SOP. Like that every single store is following SOP. So the powers that be are basing their technology off of the SOP, that book that's right in front of them, and they upload it to AI, and then AI reads the SOP, and bada bing, bada, we have this magic technology that now we can roll out to every store and we're gonna scale. One of the things that I would always talk to my stories about when we were rolling out any new technology was exactly that. We got to get back on SOP. Like as best as we possibly can. Because if we don't, the technology is gonna be built on a faulty foundation or utilize on a faulty foundation, and we're not gonna get the results that we need. And so I think that's also the issue that where I see where companies, when they want to do the technology say, man, every store is not all thousand stores. Come on now. They're not all on SLP. So how do you help them figure out how this technology is going to honestly fit within their utilization of their definition of SOP?

SPEAKER_02 17:57

Exactly. Yeah. Yeah. And you know what's interesting with that? Because you're absolutely right. And when most retailers will say, when we let's try it out at 10 stores, they usually try things out at the same 10 stores. Yes. Because they've decided and learned that those 10 stores, they're probably the most accurate, right, on SOP. And they're used to trying new things. So they have a higher tolerance for new things when it doesn't work and you have to figure out how to fix it. So I find that sometimes that actually masks a lot of the scalability issues that you don't see because you picked the perfect test case to try it out.

SPEAKER_03 18:33

You do it at home office stores, right? That's the other problem. You do you listen to me, that the home office stores are not the are not realistic stores. Like any retailer listening to this, hopefully you know this already, but I'm just gonna let you in on a little secret. Your home office stores aren't realistic, like when it comes to trying out new initiatives, new planograms, all of that stuff, because you're supposed to home office. And the merchant the merchants live probably in the same building as your store. Yeah. So they get the opportunity to take the elevator down to that store and check out their display. It's it doesn't work that way. So anyway, just wanted to help them to help you out with that. Let's talk about let's talk about your amazing podcast. And you don't do it, you don't do it alone. Talk, talk about your amazing co-host and and then how that podcast can be.

SPEAKER_02 19:27

Yeah, so yeah, my incredible co-host, Casey Golden, she's a startup founder, our company Luxlock, all about this. She likes to say she's a luxury girl. So she's all about luxury shopping and the what I like to call as the luxury version of clientelling, because that's really where her company sits, is really making that experience shine for someone. And I think that the way I've her often heard her explain it is to say, if you could shop with someone who actually understands everything there is about what you're shopping for and has that expertise, why wouldn't you? Yeah. And so that's what it's all about is about connecting people with that kind of whether it's a stylist, a personal shopper, whatever it is, that's what clientele means to her for that. She brings a great perspective to things. So one of the reasons why we like doing this is because we each kind of come at this from a very different side of retail. We both have retail tech experience, obviously. Casey's actually been, she she's worked at places like Ralph Lauren, VF Corp. So she's been a buyer, she's done, she knows about merchandising, she's worked in supply chain. So she has that perspective. And I've always been a little bit from that outside looking in and being the technology provider, but I've always looked at it as it's one thing to just provide technology, like we talked about earlier, but you kind of have to know what it's being used for and how to use it. Over the years, I've spent a lot of time operationally with a lot of retailers kind of understanding how they are using this. So that's the perspectives that we bring to it. But you asked, how did we start this? So I'll take you back a few years back to 2020, and you may or may not remember this thing called Clubhouse. Oh that was at the time really popular.

SPEAKER_03 21:06

Yes.

SPEAKER_02 21:08

So it was getting super popular, right? To just do all these topical things. And I was in a conversation with actually a couple of other people. I say, no one's doing discussions on Clubhouse about retail, but a lot of retail people that we talked to all say like they're enjoying Clubhouse. So why are we not why don't we start a discussion group on Clubhouse for retail? So I called about a group of folks, or about six of us originally that started this, and we could I called it the retail razor room because our premise was we're gonna we're cutting through the clutter and cutting through the noise to explain things to help for particularly technology for retail. So we started a room, we I would say generally did a weekly discussion on a different topic in retail. And so we did that for most of the year, for most of them, I'd say about a year. And at some point we realized some of these discussions are pretty good. This would make an interesting podcast if we recorded them. So I figured out how to do how to record clubhouse sessions. Yeah. And that's how we got the idea. And Casey was one of the other folks who usually joined for this. And I'm like, Casey, what do you think about joining a podcast? We'd host it together. We'll do these clubhouse recordings, and then if that goes well, then maybe we'll do some stuff beyond Clubhouse. So yeah, that's how we started. So like the first season, most of the episodes in our first season of the show were ones we recorded in Clubhouse. So you got the flavor of whatever folks showed up in the room to ask us questions. We'd have a different panel of experts. We were we nicknamed the group the retail Avengers across the six folks, because we were generally always try to get most of the six together for that. And then and then, of course, Clubhouse died out and faded away in popularity. So we just kept it going as a podcast ever since then.

SPEAKER_03 22:47

That's awesome. So yeah, I remember. I do remember Clubhouse very fondly. And I actually came across a picture on Facebook of my Clubhouse setup that I had on my and because I was talking a lot about podcasting and I was talking a little bit about retail in that space. And to your point where I actually had my Rodcaster Pro set up where I could actually record it into my Rodcaster Pro, all of that stuff. And it was like, and that was an amazing experience, an amazing time for communication. And one of the things I love about podcasting, I started podcasting like in in 2007. And then I stopped in 2012 and then picked it back up. And I think part of the interesting thing about podcasts is that it you're feeling the need that a large, maybe a larger industry is not filling. What need do you feel the retail, the retail raiser is actually filling within the space?

SPEAKER_02 25:16

Yeah, I think really our focus is really explaining things simply because they're just too complicated. And that often is the case with retail technology, right? Where, you know, even like now, of course, almost all the discussions are around AI, right? Because that's the main thing that everybody's trying to figure out how to adopt in retail. You ask any retailer how are you going to use AI, you'll get a hundred different answers, right? Because everyone's still trying to figure out what are the best use cases, what gives you the best value for it. So we'd see the mission as any kind of complex subject, which again, like nine times out of ten, it's technology related because that's where a lot of the complexity is. But sometimes it's not limited to technology. So some of our most popular episodes have been not really about technology and they've been more about people and things like how do you lead teams in retail, how do you develop leadership skills in retail, how do you make retail a full a fulfilling career. So we've had some episodes like that, and so it would, which is interesting because that's very different from technology. Yeah. It's very very almost like polar opposite in some arguably. But in both cases, we see it as it's about simplifying things so it's not complex. If it was already simple, everybody would be doing it, right? And we wouldn't have questions about these things. Right? Everyone would just get it right the first time. But the fact is that in general, as an industry, you don't get it right the first time, and it and because it is complicated. So our goal is usually let's who can we talk to, who can we bring on the show and have a conversation that helps explain why things succeed. And it's not, I don't like to use the phrase that we talk about best practices because I think that's misleading. I don't like to use that in this case. So that's why I like to say it's about simplifying, complex simplifying the complexity. And that's why sort of our catchphrase is cutting through the clutter.

SPEAKER_03 26:58

Yeah, no, I love that. I love that. So of course, you hinted on it around AI. I I have a podcast episode coming up with Jenna Posner, who's the co-founder of Retail AI Council. Yeah. And I asked her this question, I'm gonna, and I'm gonna pose the same question to you about AI. Does AI have a branding problem within retail or in general?

SPEAKER_02 27:22

Yeah, it's a great question. I don't know that I would call it a branding problem. I think like every new technology, it seems, that comes to retail, there's always a hype cycle. That's a t-shirt right there.

SPEAKER_03 27:35

There's always cycle. It's a t-shirt. You need to brand that like hype cycle. I love that.

SPEAKER_02 27:41

Well, and I I feel like I can say this since I am one of the technology vendors, right, that is doing AI in a big way. And it's true, it it is there is some intention here, right? Every technology vendor, we feel like we have to hype these things up to get attention, right? Because it's not easy always to get the attention you want to be able to present the solution to a target audience like retailers. In a way, it's self-a self-fulfilling prophecy kind of thing, in that, yeah, every technology vendor, we're gonna hype it up like crazy at the beginning to get attention to it. Now, the trick, again, this is kind of like what I was saying before about the podcast, the trick is always seeing through the hype and figuring out where is the real value and what kind of real value can you get. And I think every new technology goes through this. It's and it's not limited just to retail. This is just a general tech thing. Every new tech goes through this hype phase. Sometimes the hype is so strong and sense so quote, bad that the next phase, like what Gartner analysts like to say, they have a term for it. They call it the trough of disillusionment, which is like basically says the the all the chat chatter about a technology becomes so negative that everybody can't stand it because there was so much hype. I actually, I personally don't think AI took that path.

SPEAKER_01 28:50

Yeah.

SPEAKER_02 28:50

Uh, because I think on the vendor side, we were able to collectively get enough adoption, enough early adopters, to actually show there was real value. So my favorite comparison on this is compare it to all the hype just like what, two, three years ago about the metaverse.

SPEAKER_03 29:07

Yes.

SPEAKER_02 29:07

At peak AI hype, everyone said, Oh, is this gonna be another metaverse? Where everybody got excited and then it just fizzled out and turned into a big nothing at the end of the day. And that's probably been a little too harsh because there were a couple of use cases that came out of metaverse around digital twins that I talk about a lot that's actually useful. It actually has real value. But the idea, I think, that everybody was gonna go into these virtual worlds and do all their shopping there maybe was a bit of a stretch. But I think there's a difference. Like I don't think AI is going through that same metaverse like cycle. I think there were enough early adopters to identify the value. I think the real challenge with AI, and this is why I don't know that it's a branding issue, it's more of just an implementation issue, is that what it actually has done for a lot of retailers is highlight other problem areas in the business.

SPEAKER_03 29:55

100%.

SPEAKER_02 29:57

And AI, like any single technology, is not the one technology that's going to solve all of your problems. It will solve some of them, where it's, in a sense, it's well suited to solve those problems. But that doesn't mean that you can solve every problem with AI any more than I don't believe you can solve every problem a retailer has with one single technology. You've got to find the right mix, depending on what the problem is. And best example I give for this with all I see we see this with a lot of customers, retailers really do have a data challenge, and that there are so many data sources that retailers have. And historically, the older a retailer is, in a sense, right, the more data sources they have and the more disconnected they were. So now the challenge is your AI results are only as good as the data you put into it.

SPEAKER_03 30:45

Say that again. Please say that again.

SPEAKER_02 30:47

AI results are only as good as the data you put into it.

unknown 30:50

Come on.

SPEAKER_02 30:51

Yep. So if you've got, let's just make up some numbers, 25 different data sources in your retail business. And if they're not all completely, fully connected, indexed, properly tagged, sorted, and you name it, and you feed it all into AI, and they're disconnected, then the AI can't do any better than you could in that sense, putting it together. You you've got to have that foundation built right with your data before you put it in into AI to get a meaningful output. And so I think that's been, if I were to judge like what's the best thing about AI for retail, I actually think it's that it has is forcing retailers to solve those problems first, which many had been putting off because recognizably, right, it's not an easy challenge to fix. It takes a lot of work to clean up your data and make it into a form that you know is suited for AI. And that in and of itself is a project. And so a lot of retailers have before this moment said we can put that off because there's other things we want to prioritize. Now with AI, that now means, okay, this data piece, that's the priority, because if you don't do that, then the AI is not going to help you.

SPEAKER_03 31:56

Yeah, agreed. And I the reason I wanted you to repeat that, obviously, is because that is something I've been talking to people about since the beginning of AI. We did something on on the campus, I want to say almost a year and a half ago, where I did a sort of masterclass on how to help re retail leaders think and communicate about AI. And this was a year and a half ago. And part of that was understanding the input first and then the problem first to be b before you even talk about the input. But then the other part of that is the frustration I see a lot now is is that they put the whatever it is, the input in there, and they they take out the output, and then there's not a lot of strategic vision that takes place for implementation of that output. They take it so much at face value, and then it goes it almost, then it also goes back to the point that we talked about SOP, right? So how are you going to implement this output based off of stores that are broken SOP processes and you're just taking this as the gospel, and now you're just going to implement it out there, and then you blame everybody else for the lack of implementation success, except for the home office stores that are doing extremely well. So I almost feel like that's also a piece of the puzzle that's being missed in the conversation. What are your thoughts?

SPEAKER_02 33:16

Yeah, absolutely.

SPEAKER_03 33:16

Yeah. Oh my gosh. Yeah.

SPEAKER_02 33:18

If nothing else, right, it tells you that the most successful retailers that are successful with AI projects are probably also improving their own internal processes along the way, along with the AI deploy. And that's a contributor to what's making it successful.

SPEAKER_03 33:33

Yeah. Yeah. And that's and I think to your point of this year at NRF, I I heard a more reserved aspect on H on AI. Last year, right? Oh my gosh, it was super hype cycle. Yeah. It was nauseating. And this year, I well, I don't know if you felt this or not, but I felt the more tempered perspective around AI. More, hey, you know what? We're still figuring this thing out. And we heard a lot about data stacks or how to get organized those things. I heard a little bit more of a reserved perspective on AI. So I guess they're listening to the retail raising. They're taking your advice.

SPEAKER_02 35:39

Hopefully.

SPEAKER_03 35:42

Yeah, hopefully. Yeah, excellent.

SPEAKER_02 35:44

But yeah, I agree with you. I think there was I I wouldn't characterize it as where last year was mostly about what's possible with AI and everyone trying to show off the most out there type things as possible to just get attention. But this year was more about here's what people have actually done. Yeah. Here's what's actually possible and what the benefits are. And if it's measurable, here's why this matters, here's how much benefit there is, and quantifying it. I mean, I saw lots of examples from researchers who have done something, and they can tell you, oh, because we put this in the store and our store team members are using this, they're saving an hour a day. And that was a measurable improvement. Or someone said they had a supply chain example about how it's saving them this much money because they're doing this. You name it. There were there are I think that was the biggest difference I saw is that now it was more about, yeah, I get that you can do almost anything, but what can I actually do? And oh, here's an example. And I felt like that, that's what the message was more about this time. I mean, and not that there wasn't still a lot of, oh, here's what's coming next. I mean, my probably top buzzword of this year's NRF was a gen tech AI and how AI agents are going to take over everything. But even that you start to see tangible results with that.

SPEAKER_03 36:54

Agreed. Okay. This is think three, four, five years down the road, someone is paying you a boatload of money, and they're like, hey, whatever you say, Ricardo, that around the next four to five years of retail, like we're gonna do it based off of what you say right now. If you have to think about retail the next five years, what are some of your some of your thoughts and some of your perspectives? Like, where are we going now that people need to start to pay attention to? I know we just we had the AI, and I know that's probably gonna be part of it, but just wanted to get your perspective because I think that's an important, you know, thing for us to think about. We're we're very action-oriented as an industry, but I also think sometimes we lack maybe some of the foresight and things that we need to do now in order to prepare for the future. Someone was asking you in this question, what is what are some of your thoughts?

SPEAKER_02 37:48

Yeah, AI is definitely gonna be part of it. It's not gonna go away, but it's just gonna grow. But beyond that, what are the things we're gonna see made possible with that? I really think that we're gonna see much more connected tissue maybe between what solutions are being built with AI and the people using it. So I think so far a lot of it, and it's just again, just the nature of a technology, right? We focus more on the what with the technology. But I think now we're well, in the next few years, we'll just be a little bit more focus on the people using it and how they're using it and why they're using it and what benefits they're getting. And we're gonna measure the benefits more from the people perspective than the tech perspective. And so alongside with that, so what I so I think we're gonna see a lot more things happening in stores. Right now, I think probably the majority of the solutions are focused more on back-end things because it's a little bit easier to deploy that way. Going back to our what we started talking about scaling, right? So a lot of stores, that makes it harder. So I think you go five years out, you're gonna see more influence of technology in the overall store experience. I think we're gonna see this technology done in a way that makes things easier for store team members and in a way that makes them, I'm gonna say, able to do the work they're being asked to do in the store with customers in a better, easier, more fulfilling, more productive way that benefits everybody, both the business and the individuals that way. And probably more importantly, makes customers feel like they got value by being in that store. So I think we will see more technology there. I think the other sort of element that's gonna insert itself into this is happening on the retail media space, where that I arguably a lot of people want to say, oh, it's getting saturated because there are so many retail media networks. But in my view, it's only saturated in digital channels, right? We haven't really gotten to a point of saturation of how is this retail media gonna play out in the store experience. I think that's still early days, but I think that's gonna get figured out and you're gonna see an integration in sorts where we haven't yet applied AI in a meaningful way into this media aspect yet. And I think that's gonna happen. So from a customer's perspective, you're gonna see what I would like to say is gonna be a better implementation of personalizing the experience to make it from a perspective of relevance to the customer. So I think today we look at something like personalization, it's hopefully relevant to the customer, but no one really knows yet. If the relevance is really being measured from the retailer's perspective of their making assumptions as to what's gonna be relevant to the user. I think when we get more AI, more agentic AI, and when we're gonna see more agentic AI on the consumer side versus on the business side, I think that's gonna actually make this stuff a little bit more useful to shoppers, and that's gonna enhance the experience. As much as everyone likes to talk about the growth of digital sales channels and retail, I'm really excited for what's gonna change in the next few years in stores because I think that's going to be a more dramatic change than what we've seen happening in digital channels to that overall experience. And that's where I think we'll see more investment. I think we're gonna see more technology being applied in there. But it's gonna be done in a way that everyone understands what's the relevance to the people that it's impacting. Because otherwise it can just fail.

SPEAKER_03 40:56

Well, agreed. And this is the last question I want to get you out of here on this one. So, with all of that, there there are gonna be some struggles with leaders trying to lead through this. What are some of the skills that leaders are going to need now? Because it's a good, it's it's different from when you and I started in retail, yeah. Putting up those Wi-Fi systems and zebras and all of that stuff. It's a different beast out there now. And given everything that you just spoke about relative to the future of retail, what are some of the skills and ideas and behaviors and thought processes that retail leaders are going to need now to be successful in the future?

SPEAKER_02 41:36

Yes, I think there's probably a few things. Obviously, there's a need to be accepting of new technologies as a starting point. But then I think there along with that, there's the need to recognize that by accepting it, you're not accepting it from a position of who is this going to replace? Which I think is what everybody's so unspoken fear that not everybody's afraid to talk about, right? Is who is it gonna replace? And on that one, I take two perspectives there. One is you look in history, right? Every new technology that comes out ultimately, yeah, it does replace people at the end of the day in some fashion and in some roles, but it's almost never to the extent that everyone is afraid of. So, like for example, I don't expect that we're gonna see robots taking replacing people and store associates and stores, nobody's gonna shop in a store that's totally automated in that manner, right? For a lot of things. So I think those fears are not uh not needed. There are some things that where we ask people to do a task now that hopefully with the technology will replace the need for a person to do that task. But I think the thing that leaders have to recognize is because your goal is not to replace the person, your goal is to replace the task, which allows the person to do something more useful with that time. And there's always something better, in my view. Like if a good leader can recognize what can my team be doing that's gonna produce even better results and what's holding them back, right? I need to be able to say what's preventing them from accomplishing those high value functions. And if it's because there's a lot of tedious things that have to get done because there's no way around getting them done, that's where you have to recognize oh, can technology solve that? And can technology eliminate those tasks and those burdens so that I've freed up my team to do more high value, high-order things. Because the net benefit to that, right, it's not just a net benefit to the business, but it's also a benefit to those individuals because they're gonna let they do a lot better if you get rid of all the tedious tasks that just have to be done. And I think the thing that doesn't get looked at in this, and that this is where I think, again, retail leaders should be thinking about is it's a fact that retail has a high turnover, right? It's just a fact that we all have to live with. So sure, we can do things to try to reduce that and try to address that. But so then you have to ask, what are those things? If I can get rid of the functions that people hate doing by automating them or applying technology, okay, that's a win, right? That's likely to improve employee satisfaction. So you have to have an ability to recognize and think in those terms versus thinking, how can I reduce labor? I think that's the wrong way to look at it. It's not how am I going to reduce this labor? And I get it. Obviously, we all know labor is a huge cost factor in retail. We all recognize that. But the goal as a retailer can't just be how do I cut that? It has to be how do I improve its effectiveness. And the way I improve its effectiveness is by finding and identifying the right technology that can help make those jobs easier, better, faster, pick your adjective there. But it's basically an improvement. Now, the catch is that most retail leaders, to be fair, right, you can't expect them to know what all these technologies are. But the other skill that comes in is you have to be able to recognize when you need someone else to come in as a partner to help do this. And you have to know how to choose that partner and trust them. So I think those are some extra qualities that maybe haven't been thought of as much. It's not as a matter of, oh, we just need to run an RFP to find a technology provider that's going to give us the best deal. No, that that's not how it's going to work. If you do that, sure, you'll you might buy the lowest cost option, but is it actually going to help the people you were trying to help make more efficient and more productive? Maybe it is, maybe it's not. But if you pick the right partner up front that doesn't just deliver the right technology but knows how to do it and understands the people part of the equation as well, then you've found someone who you can actually trust every step of the way and deploying that and it and then going in that this is someone that this is a long-term relationship. I think the some of the things are the worst things that can be done that often retail leaders may fall into this trap is I look at technology partners as a short-term thing. I just need to make a purchase. And no, you don't want to look at it that way. Look at it as a long-term trusting relationship where you're working with, you're going to work with multiple providers, but you want to work with ones who you know that over time they can keep helping you improve, keep bringing new things that make things better for the people doing the job. And that's, I think, a new skill. I think that's a new skill that we haven't needed before. But I think now the technology is at a point where it's not a short-term fix, it's technology for the long run. And so these choices matter. Man, did you prepare that?

SPEAKER_03 46:16

I get to think about it a lot. Yeah. Yeah. Listen to me. I usually have something to say after someone gives an answer. I am I am speechless in the context that you've I'm like, this guy's all in my head. This is is he, is he like, like, what is wrong with this? What is wrong with him? Why is he saying everything I'm thinking about? No, I love that. I love that perspective. I love that perspective. I I completely agree with the idea around labor. I always approach it in the context of productivity as well. Yeah. Right? Because here's the reality within stores is that you will always have a team member or people within the stores. One or two people are more productive than the other, than other people. So think about that. Now, is that fair where you have Jim and Tom over here and Susie, who are three times more productive than 10 of their counterparts? And so how are we balancing the ideas around productivity, fairness, if you will, but making sure that we're taking into consideration leadership, but also the growth of the stores and scalability. We've been talking about as well. All of those different variables. Yeah. I knew this was going to be a great conversation. It was, it's been long overdue with you, and I'm so glad that we finally got the opportunity to connect. Yeah. I know the audience and everybody's going to get so much out of this of what you you spoke about. Love your background. I love the five albums that you would save. Life means a soundtrack. Yeah, life is a soundtrack. Life is a soundtrack. What where can people connect with you and how can they get to know a little bit more about you? But more importantly, how can they partner with you if they're looking at if they're looking for a solution from a Microsoft standpoint?

SPEAKER_02 47:59

Yeah. So I think probably the easiest thing to do is to just find me on LinkedIn. That's probably the easiest, quickest way to get a hold of me. Just feel free to send message me there. I'm always, as I know, I'm always posting things LinkedIn, talking about what we're doing. If you want to know more about the podcast, that's another excellent way to do it. There's a retail razor page on LinkedIn. So that keeps you up to date on everything happening there. But that's the easiest, simplest way is to just hit me up via LinkedIn.

SPEAKER_03 48:25

Excellent. Excellent. Excellent. Thank you so much for your time. I really appreciate you being on here. And this is not going to be the last time we have you on Retail Leadership with Steve Worthy. Thanks so much.