Food retailers moved with speed and agility throughout the pandemic to implement safety protocols, cope with supply disruptions and adjust operations. The industry’s response to an unprecedented challenge was impressive, but now what? Progressive Grocer spoke with Rance Poehler, president and CEO of Durham, N.C.-based Toshiba Global Commerce Solutions, about frictionless food retailing, winning with speed and why grocers need to think small.
Progressive Grocer: You’ve been in the technology world for 25 years and have seen a lot of change. We often hear about the pace of change accelerating, but how much faster can we go?
Rance Poehler: Every day, every month, every year, there’s going to be disruptive technology. It’s just the nature of the space we’re in, but COVID-19 accelerated technology adoption by five years. We certainly saw this with high-volume retailers who were in the midst of digital transformation and were much better prepared than those who weren’t even thinking about it and didn’t have a strong e-commerce platform.
PG: With the rapid adoption of technology, are there any innovations that you’ve been surprised haven’t caught on, or caught on faster than you thought?
RP: There are several related to frictionless experiences, and self-checkout is a good example. We were doing well in self-checkout, but COVID-19 caused a massive acceleration. Shoppers made a decision: If they were going to go in the store, the less contact they have with merchandise or associates, the better. So our self-checkout business saw a huge lift. With the movement to more self-checkout, retailers are seeing increased shrink, but there is a lot of innovation happening to address that.
PG: Is the increased shrink intentional or inadvertent?
RP: A lot of it is inadvertent, but we are working on how to solve the operational side of shrink by using computer vision to increase accuracy and improve the customer experience. For example, we can reduce the checkout time by confirming if an item is the correct item to help customers better identify products to speed up the process and satisfaction with the experience.
PG: Rapid adoption of self-checkout continues to have a major impact, but what technology or innovation do you believe will have the most disruptive impact on food retailing this year and in five years?
RP: Frictionless will clearly be an ongoing source of disruption. The retailers that have the technology and platforms in place to provide that to the customers are going to benefit. The vision is that other than picking up products, shoppers won’t have to do anything else beyond opening an app that is linked to a payment method. That’s one thing that got me excited about Toshiba: the vision of frictionless. It is a source of ongoing disruption, because there are too many business reasons to not have it happen.
PG: You joined Toshiba last November and at the time commented that the company was on the verge of disrupting the industry with intelligent end-to-end solutions. What did you mean by that?
RP: In January, we unveiled our ELERA platform, which we describe as a comprehensive, unified commerce platform designed to free retailers to reimagine their businesses without the constraints of traditional retail IT systems.
PG: And that means what?
RP: It’s a different approach based on the concept of microservices. We’re not telling the customer they’ve got to rip out all their legacy applications. We’re saying insert the ELERA platform and build upon it over time in areas where you want to improve efficiencies with what we envision will be 30 to 40 microservices. For example, in self-checkout, we have a microservice focused on accuracy realization, and another example would be refund process improvement. A microservice is essentially an application focused on a particular area that sits on a platform to make the business more efficient and profitable. We have ELERA in nearly 15 large retailers at various stages, and we expect it to be highly disruptive.
PG: Regarding the 30 to 40 microservices, which ones are most popular?
RP: The full range isn’t currently available, so we are relying on retailers to steer the development and rollout of future microservices. We’re launching our customer advisory council where we will have discussions about business challenges and say, “If you could guide us to develop specific microservices on ELERA, what would be your priority?” Our first advisory council will be in early April, and we’re going to use that input to really fine-tune our offering.
That is going to have a big impact on our business, and another area where we are seeing growth is with end-to-end, wall-to-wall service agreements. We service all of our own technology, but we’re servicing all the technology that the stores utilize in the space that we’re in. And why is that important? It gives retailers greater access to knowledge about their customers on the ELERA platform, and they also appreciate having one throat to choke when it comes to servicing their stores.
PG: That gets at the issue of unifying data from multiple sources which is key to making optimal decisions. Why has that data unification piece been so challenging?
RP: A lot of it is related to legacy systems and financial constraints. It is hard for companies to rip and replace a bunch of IT architecture to gain more access to the digital footprint of their customer.
However, COVID-19 has changed two things. It drove home the realization that you’ve got to understand your customer better because the ones that did performed better throughout the pandemic. And you’ve got the major impact of Amazon, because Amazon understands everything about their customer. In the past, retailers got access to the bulk of their customer information at the point of sale (POS), but some of that legacy architecture has been in place for 20 or 30 years. Retailers now have so much more information about customers, but they have to be able to tie it all together, and our vision of the way to do that is with a platform approach, like with ELERA, to compete with the largest players in retail.
PG: How does the cloud fit into ELERA and the concept of microservices?
RP: ELERA is absolutely cloud-enabled, and that’s how we’re deploying it today. But it does have various deployment options, depending on the use case and the particular retailer needs. A lot of traditional legacy architecture revolves around keeping data in a data center on premises. Some of our biggest customers today are using cloud in their IT environment for various operations, but many applications are still run on prem. But retail will move to the cloud, and the medium and smaller retailers will be able to take advantage of that. They'll be able to use our hardware and services, light up ELERA in the cloud, and then we combine all that as a solution and offer it as a service.
PG: When people hear the Toshiba name in the retail technology world, how would you like them to perceive you in the future?
RP: As an end-to-end solution provider that is much more than a legacy POS company you know from the past. We have repositioned ourselves as a thought leader in retail and as a solution provider. It is a strategy that will propel us into the future, but we do need to change some perceptions. The biggest retailers in the world are our customers. They trust us, and they are interested in ELERA, but that isn’t as widely known in the industry as we would like.