Retail 301: The Science Behind the Shelf with Leon Nicholas

Hi, I'm Darina, co-founder of Quo. You might know us as OpenPhone. My dad is a business owner and growing up, he always kept his ringtone super loud so he'd never miss a customer call. That stuck with me. When we started Quo, our mission was to help businesses not just stay in touch, but make every customer feel valued, no matter when they might call. Quo gives your team business phone numbers to call and text on your phone or computer.

Your calls, messages, and contacts live in one workspace so your team can stay fully aligned and reply faster. And with our AI agent answering 24-7, you'll really never miss a customer. Over 90,000 businesses use Quo. Get 20% off at quo.com slash tech. That's Q-U-O dot com slash tech. And we can port your existing numbers over for free. Quo. No missed calls. No missed customers.

How do more than 100 million Fortnite players join the battle without lag? AWS is how Epic Games scales up to keep them in the action. AWS powers next-level innovation for millions of businesses.

Welcome to the Mr. Beacon podcast. Another great episode this week with Leon Nicholas, who is VP of Data Insights at Smurfit West Rock. So if data is where the gold is buried in retail, then Leon is an alchemist. He's also an amazing... storyteller. And his position at Smurf at Westrock, I think, is fascinating. Smurf at Westrock is this giant in packaging, arguably the biggest supplier of cardboard fiber.

packaging and displays in the world. They've got over 100,000 people and a who's who of customers across many, many sectors. So they make everything from album covers to those little bits of paper that you get with prescriptions and the cardboard displays that pop out and are very creative, artistic shapes, sizes, and the cardboard boxes that you get delivered to you on a daily basis.

But they don't just make boxes, they make the machines that make the boxes. And they also have some very interesting work going on, wiring, digital and physical. And so Leon gets to see all of that. He is brought in as a subject matter expert, speaks widely in conferences. And, you know, from our... perspective as solution designers, as architects or enthusiasts about what's going on in the future of digital physical and the place where everyone goes, the retail store.

then Leon knows much more than most people about what's been happening, what is happening, and what is going to happen. So enjoy the conversation. The Mr. Beacon Ambient IoT podcast is sponsored by Identive. Use IoT solutions, create digital identities for physical objects, enhancing global connectivity for business people and the planet.

By Bleakop, who enable physical products to communicate with cloud applications using Bluetooth Low Energy. And by AmbientChat.ai, we connect people, places, products, and brands with a digital assistant using AI and Ambient IoT.

Leon, welcome to the Mr. Beacon podcast. It's a pleasure and a privilege to have you on the show. Oh, it's an honor to be here. Thank you for having me. Well, I have really enjoyed our... conversations so far and you know retail is a regular point in the ecosystem that solution developers ambient internet of things, AI solution developers think about when they're devising their business plans.

You know, it's an industry we're all familiar with, but very few people know it to the depth that you do. And I actually think depth is required because on the rocks of retail are... thousands of crashed, shipwrecked businesses that have tried to get going. And so, you know, I'm entitling this conversation for now as Retail 301, the science behind the... shelf. Your VP of Retail Insights at Smurf at Westrock, who are arguably the biggest packaging company in the world, 100,000 people.

somewhere between $20 and $30 billion of revenue, depending on how you measure it, $40 billion of assets. And, you know, there isn't a brand. that you don't touch your packaging and your displays. are everywhere. But the thing I love about Smurf at Westrock is how far you go in terms of applying technology to retail. You are the guys that... make the machines that make the boxes, as well as selling the packaging that touches almost every product.

You know, what is retail 301? You know, if 101 is about stocking shelves, 201 is about shopper marketing. To me, retail 301 is about... those invisible systems that make retail work. And the structure I was thinking we could use for our conversation is kind of... Problems, solutions, and future. And the problems are, I entitle, what keeps Doug McMillan, the CEO of Walmart,

And what keeps Colleen Wegman, the CEO of an amazing regional chain, what keeps them up at night? And then I thought we could talk about packaging and displays as smart infrastructure kind of. the digital convergence and what is going on in packaging. And then lastly, you know, your take on where all of this is going. So does that sound like a decent agenda for our conversation? That sounds great. I hope I'm up for it.

I know you are because I've heard you talk about all of this stuff in an amazing manner. And, you know, so let's kind of if you could see inside Doug McMillan's brain. What's your guess at what is keeping him up at night? And maybe there's a difference between what's actually... some people think is worrying him and what's actually worrying him i i'd be very interested in in your take on big retail ceos and

you know, 100 regional, 100 store chain CEOs, what they're worrying about these days? Yeah, gosh, you know, these days there's quite a lot to worry about. actually. Now, I think you could make some distinctions between what the big players are concerned about and what the smaller ones are concerned about. But let me just speak in some more general terms first. I think certainly right now, the...

Retail leadership today is significantly concerned about the unpredictability of government regulation. The increasing... picking and choosing of winners and losers, the imposition of tariffs, without a good sense of what those policies are, as opposed to just kind of the whim of someone each day.

You know, and what some of those forces are, it used to be a reasonably predictable kind of an environment. And you had a regime change in Washington and some things would shift, but then you could, you know, set it and you were good for the next X number of years. That's a new variable today, Steve. And that variable has implications for logistics. It has implications for pricing, which is the single biggest driver of sales.

And so it's keeping a lot of folks up at night because they don't know how to plan. They don't know what's coming. And it's made for things to be rather unpredictable. I think that the second thing that keeps folks up at night is... The recognition that there are very few retailers today who have been here for 100 years. I mean, I...

There may be a few names, maybe Abercrombie and Fitch, right, that you could think of. But they've radically changed, obviously, since the beginning. But there really are not that many. Maybe boots in the UK, if I've got it right. And so because of that, there is a recognition that as society changes and retail is arguably the closest.

industry to the ebbs and flows of society, of people and what they buy. As a result of that, I think there's a real concern about just keeping longevity going, staying relevant. over time so you're not just you know kind of the flash in the pan you're not a a time-bound retailer and so many are but that you actually can you know have a life that exists, partly because shareholders are looking for that. They're looking for long-term value and long-term capacity to make profit.

But also just because, look, you know, there's so much they can so quickly. happen that can take a retailer that was just a few years ago doing quite well, you know, and now is being named a takeover target, for example, you know? And so as a result of that, I think there's a real concern about... How do we do this? How do we keep staying relevant in a society that is...

changing more quickly. You don't have large blocks of time where things are relatively the same for a decade on end, the decade of or whatever. Now it's really every couple of years, you seem to have these new forces and new things at play that make retail much more complicated. Retailers used to be able to try to set the agenda or brands tried to set the agenda.

Now TikTok sets the agenda, you know, or, you know, or some AI agent, you know, sets the agenda and determines, you know, what you're interested in. And so as a result, I think of that. It's you've got a lot of angst about we'll call it relevance angst. And, you know, investing today in enough in enough agility so that you can rapidly change.

in the future. Those to me are the two big structural, I would say that would encompass anybody in retail. I don't know if you have a fruit stand, you're probably concerned about those things.

Yeah. So just to kind of play back some of my thoughts on what you just said, you know, one is on one hand, the inputs, the cost of goods all over the place, you know, could change overnight. And then the output, the consumption mode, how consumers are buying things, drastically changing. And then you've got all of the tools that people use in the middle to join that up. That's all changing as well. And all of that needs to be applied. You know, if this was a racing car.

The foot would be right on the floor and the needle would be in the red because if it's not in the red, if you're not like running things absolutely to their limits and you've got big fat margins, guess what? Someone who's got lean margins is going to basically eat. your lunch so you've got to drive that right racetrack at the very edge of what is possible and then how on earth do you rebuild the car when you're you're you're doing that so how has walmart

And I don't want to go too far into anything, but how have they, it seems like pulling off the impossible. I was looking at the market cap of big tech versus companies that make things and sell things. And Walmart's still up there at the top of the leading the pack of the physical companies. And I think when Amazon came along, people thought, these guys are dead. How do you take...

4,600 super centers and adapt that to the world of e-commerce. How have they done that? But they did it. Yeah, they did it, and they did it through Vision. I think, you know, and you've got to give leadership there over the last 10 years, maybe even you might even see the last five or six, real credit for making strategic investments, big bets.

on saying, hey, wait a second. The biggest unlock, I think, for Walmart was to recognize they've got that base of over 4,000 stores in the United States and that that base, rather than being a problem. you know, for them because, oh gosh, we've got, you know, physical assets here. We're going to do it. That became the key that unlocked their capacity actually to serve the consumer faster. Proximity.

in the world of commerce became more important because speed became more important, you know, two-day delivery or whatever. And so Walmart steps back and says, hey, wait a second, you know, At our core, we are a logistics expert. You know, if something goes, if we have a natural disaster, Walmart gets food and trucks there faster than the National Guard shows up. Yes. I mean, from a logistics, from a moving things, you know, they are, they're the best. They invented a whole...

terms in... Bosket analysis, arguably. Sure. Yeah. And even on the back end, arguably they invented cross-docking. You know, so you've got this enormous infrastructure here. And I think what they realized was that they just needed to tune that. you know, for purposes that were ultimately going to get things to the consumer faster and they were going to engineer things faster.

to be more, frankly, even more efficient, but more tuned to a digital architecture, which means bringing that whole system in effect. online, but applying technology not only to continue to cut costs through automation, would be one big area, through automation and we'll call it algorithmic sorts of analyses.

But then take that same technology and give it to the consumer. So now the consumer can use that whole ecosystem to order, to pick up, and to get ideas for other products that might be available to them. And I think it was, for me, the fact that you can get faster access to your product, to what you want and what you need through Walmart than you can through Amazon. I think. And so Walmart took the advantage of physicality and applied it to its logical end.

took what they're good at. They're good at logistics. They're good at customer satisfaction. They're good at cutting costs and said, hey, we can do that. All those elements will lead to success over here in the digital sphere. of things. And now I think by most estimates, it's about 20% of their sales is online initiated.

Which is amazing. And, you know, my experience of them is they're a technology company. I mean, they have data scientists. Yeah. And you kind of have to be. You do. I think if they had not. made the pivots and the turns that they needed to, to apply the, the, that engine and retool it. formulated to some extent for a digital first age, that would have been problematic. Yeah.

But you wouldn't have said that they, you know, 30, 40 years, you wouldn't have said this was a technology company. You might have said it was a logistics company, was a supply chain giant that happened to sell, you know, groceries. Yeah.

But today, I think you're right. I think it's very much a technology player. Yeah. When you have labs and people that are looking at... auto-identification and you know they're the first company that really deployed uh distributed ledger technology to in onboarding suppliers and so they've got a lot of things to be proud of So things, they're not dead yet. If you're the technology disruptor, you're like, oh man, they still seem to be at the top. So what about...

If we look at the regional 100-store chains, how do they survive in an environment that's being eaten by... AI and all of this logistics technology and connected packaging? And what's your prognosis there? Yeah, for the regional chains or the smaller chains, I think the key for them remains... differentiation. They have to be something other than, something more than, something different from those larger players, while at the same time...

still leveraging and channeling, refracting that technology toward that end of differentiation. So for a smaller chain, what that might mean is, you know, better, more personalized shopping assistance. for example, more personalized apps that are more customized to local, particular, because it's the local and the particular that always makes problems for a larger company.

Right. Yeah. The more homogeneous you can have things, the better, you know, and things are every day. But I think to the extent that the regional chains can be more applicable to geographic differences to. to differences among households, to cultural differences, things like that. That's how they continue to stay relevant. But they can't do it in a way that is Luddite in fashion and says, well...

you know, none of that crazy technology for me. No, you've got to take that technology and adapt it for... your shopper and bring that technology to bear in store because you have to be able to keep pace. And this is where I think AI in many cases may help because it gives an advantage. you know, to somebody who might otherwise not be able to do it. You know, when calculators first came out, it helped lots of folks who before that had trouble with their times tables.

You know, well, I'll just use the calculator and it won't show that I don't know my times tables. You know, I'll just do it like that. Or if you have poor handwriting, when you have the PC come in, it doesn't matter if nobody can read your writing because the PC does it for you. So it's a leveler.

in that regard. And so I think to the extent that these regional chains can appropriately apply AI, not in a way that is for homogeneity, but can do it in a way that draws out their distinctiveness, then I think you're talking and it gives them sort of a leg up. and a catch-up advantage. I like that because, you know, I was thinking about what Walmart had been doing with Sparky and their own AI agents. And I'm thinking, you know, how is Jimbo's my, you know, I don't know, dozen?

organic food chains local to the san diego area how on earth do they they're not going to develop a new ai agent but i guess what i'm hadn't thought about which you planted in my brain is Yes, in the same way as startups are now expected to ship products, not with 30 people, but with three people. Yes. These tools allow you to have the benefit of incredible merchandising analysis and the kind of...

modeling that would only be possible in the past by someone with an army of data scientists. Now that you can actually do this with a very small number of people. That's fascinating. Very small. Yeah. It allows you to scale up or to talk. Maybe the word, the term is punch above your weight. Yeah. You know, I, I have a friend who has a startup company and he's an employee of one. And with AI, he's got a business plan, a logo, marketing taglines.

You name it. He's got all of that stuff at his fingertips. He has a robust relationship, he would say, with his personal chat infrastructure. They give him very customized ideas. And so as a result, you know, he's able to play up there with, you know, with the larger players. So I think this is an advantage. And that's what makes, again, retail so exciting, you know, is that.

You know, just when you think, well, scale is the advantage and the big will win, that may not be the case any longer. The small may triumph. Yeah. Well, I'm glad you brought up the startup thing, not just because...

I'm back in that space now, but... A lot of our audience are solution designers, architects, entrepreneurs, and sometimes they're actually in big companies, but very often they're in technology companies that want to get into retail. And I am very interested. You've probably seen a lot of initiatives over the years.

What would you say the pros and cons are of working with the big guys versus working with the small retailers? If you're trying to introduce a new technology, you know, I look at my old company. Williot and Walmart did... press around their deployment of their ambient IoT in 500 stores going to all of the stores. And I think about what it took to get there. I mean, that was something that it basically...

took the company's eight-year history to get there, which is beyond the attention threshold of most investors. So what's your advice? You know, with the big companies working with big retailers, the advantage obviously is the capacity to have, depending on the partnership you have. additional resources, additional capital that you can use, that you can apply, and that could potentially be used elsewhere. But it oftentimes...

means capital resources that you might not otherwise have had. It gives you scale, the capacity to have something done not in a small place, but in, you know, and get that kind of recognition. I think maybe a related term would be impact. If you're looking to have an impact, if you really want to do something that is noticed, if you want, it's kind of like Bill Gates, you know, if you...

you got a lot of money, you could, you know, cure malaria or something like that, or give everybody nets in Africa. You know, a small startup might do that for a village, but here you can do it, you know, the whole continent gets, you know, malaria nets. So there's the opportunity for impact to say, I really want to do something here that drives impact. I think the benefit of working with smaller retailers...

though, is speed. You can do things just much more quickly. There aren't layers and layers and layers of bureaucracy. You have an idea. connect with some folks who are decision makers and the decision is made. Yes. And there you go. And there's a... There's the capacity to move more quickly. Smaller companies are more agile. So when you have hiccups that come up, it doesn't stop the whole enterprise. It doesn't say, oh, wait, we've got to go back to phase B2. Yeah.

You modify and you move on. So to some extent, innovation happens more quickly. You get to answers, speed to answer, does this work, does this not work, can be done on the smaller scale. And therefore, I like to think of smaller retailers as kind of the first testing ground. It's the first way that you determine something because you can get there more quickly and get to answers more quickly. So I don't know that there's a, you know, there are pros and cons, I think, to.

them. And I think it's what motivates you and how far along you think an idea is. This episode is brought to you by Capital One. Capital One's tech team isn't just talking about multi-agentic AI. They already deployed one. It's called Chat Concierge, and it's simplifying car shopping. Using self-reflection and layered reasoning with live API checks, it doesn't just help buyers find a car they love. It helps schedule a test drive, get pre-approved for financing, and estimate trade-in value.

Advanced, intuitive, and deployed. That's how they stack. That's technology at Capital One. How does F1 turn data into insights at 200 miles per hour? AWS is how fans get inside the strategy. AWS powers next level innovation for millions of businesses. Yeah. Yeah. I mean, you go in with something that's half-baked to someone that's got thousands of stores, then it's just not going to work. Is it your ability to think on the fly when you're halfway through the... 3,000 Earth Store.

It's just not there. And actually, I had someone who's a veteran of one of those, the biggest retailers. And he talked about when technology solutions break. And he talked about these thresholds. And there's kind of the... the one the two the three store pilot things break then yeah then you get to 500 stores things break then and then you get to you know 3 000 10 000 and then there's another set of break points and so

I want to get to the central topic, which, you know, why data and packaging? What's the link between them? Talk to me a bit about how packaging and Cardboard displays potentially can be smart infrastructure. Well, packaging to me is certainly it has functional benefits. And that's, you know, that's always been the case. But to me today.

packaging is a portal it is a portal to address any number of of industry issues of vectors um if smart if connected if If it can put its hand up and say, I'm here. And it does that in a number of ways. One is just plain old compliance. If you're building a display today, manufacturers produce, and we're the largest producer of displays in North America, a manufacturer might...

Or we might help design a display for, say, a cosmetics company and ship it out. And it ends up being, according to the data, in 60% of the stores. Well, that means 40% never got put up. They're either in back rooms somewhere or someone just didn't want to put it up. Or in some cases, somebody opened it up and took that same product and put it to the shelf. Said, oh, here's shelf product. I'll put it on the shelf.

And not clutter up the aisle type of thing. You know, if I have a small store, put it that way. And then even among the 60%, I don't know where that got put in the store. Did it get put on the front end? Did it get put in the far corner, you know, next to the clearance bin? Is it where it belongs? Is it fully stocked? You know, or is it empty?

I have all of those questions, but unless the display is smart, I can't know the answer. But if the display is smart, then I can know all the answers to those things. And therefore, in turnkey fashion, say, here's my problem right here. I know where it is. I know that it's up. I know where it is. And I know if it's fully stocked. A smart display can tell me if there's unusual activity there.

like theft. If somebody goes and buys, I don't know, 15 packages or takes off 15 packages of AA batteries, it might be a trigger that perhaps something's self and you might want to take a look at the camera. A smart display. And that's just the beginning of what that can do. I mean, from a backend perspective, the capacity to track.

the product from the manufacturing facility to the DC and the DC to the store and the store out the door. Just enormous capacity to, you can't run, you cannot run retail today. If you don't know where your stuff is, I mean, how many times have you gone online and said, I'll take that product and you order it and it says it's in stock and you hit the button and it comes back. It wasn't in stock. We gave you this replacement item. Well, wait a second. You said it was in stock.

I mean, imagine if the airline industry operated that way. We don't know where the airplanes are. You know, we're not quite sure. They're somewhere around here. I mean, it would be, you know, the whole thing would fall apart. Similarly, in retail, it's the ability to be able to say, whether it's the truck or the pallet or the case or the individual unit, where is it? Because I'm going to do something with it differently, depending upon where it is.

And more and more, I've got a shopper who's plugged in through their mobile device. I've got a shop who's plugged in to saying, I want to know where it is so I can go get it. So the retailer can't, I don't think you can operate in a digital age. without sort of a, a smart package telling me here, here's where I'm here, here's where I am, et cetera. And then of course there's the whole opportunity to engage.

If you are a consumer, the capacity to scan the package now at any level or scan the code and now begin to have a dialogue that is uninterrupted. unfiltered if you want, with the producer. And I can ask all kinds of questions there. Like, when was this made? Where was it made? Can I mix it with rice? You know, when does it expire?

Has it been, has been, has been exposed to these chemicals? I can ask any number of questions of that package. Have a dialogue with it. And then finally, this is a long answer to your question, Steve, because you could tell I was kind of animated by it.

You can then bring it home and have a post-purchase conversation with it. I mean, I don't know about you, but when my wife says, hey, let's go get some plants and plant them in the front of the yard and all that, I don't know what I'm doing. Yes. Put it in the ground and hope it all works out. But if I could scan the plant tag and have the plant tag walk me through a video that says, no, no, no, no. Put it in this deep and this much water and this much sun and...

You know, give it this amount of fertilizer or whatever. That's all post-purchase engagement. Yeah. Right? And then remind me a couple weeks later, you know, hey, how are those... pink petunias looking you might want to think about uh red ones and they're on sale and we can deliver them to you and but none of that can happen if the package isn't smart none of it yeah and so to me

This is where we are, I think. We're just at that place now where it's almost a mandate, or it feels that way to me. I don't think we can move forward much more here until the things are smart. And why aren't they smart already? Because you convinced me well into that exposition. So what is it that stops people doing this? Because it seems like a no-brainer to me. Some of it is cost.

Or the perception cost. You know, there was a lot back several years ago when some of these technologies first started to become available, they were expensive, particularly for the fast-moving consumer goods, which make up... you know, probably call it 60% of, of, of, of units are fast moving consumer units out there. You know, candy bars, bags of potato chips, things like that.

To put a tag on all of those, I think, is problematic. But I think the biggest issue was it wasn't always connected to an AI. infrastructure because AI didn't exist today. I think the, the, the catalyst, the, the barn doors opening to some extent is now all of that. All of those signals coming from smart packaging can now be run through a translation layer. I don't know. You're a better terminology than I am. I can now run through a layer.

And that layer now can, in a customized or personalized or contextualized way, do something with it. Yes. That acts as a feedback loop into the system, either from an efficiency and productivity perspective or from a theft perspective or from a consumer engagement perspective. And we haven't even talked about sustainability. I mean, here's the capacity now for something to walk it to from literally from the...

the production of the cardboard, all the way through to its recycling. I can measure and track that and determine a circularity score for that product. But if it's smart, I can do that. Only with, I think, a layer of artificial intelligence here that is going to look at this more intelligent versus just collect the data. If it's just going to be collected in a storage area.

then big deal. I've collected the data. The product moved from A to B. But now with, I think, the intelligence layer to say, wait a minute, it moved from A to B. It could have moved from A to C. and saved X amount of dollars and this amount of gas and this amount of carbon emission, et cetera. And it's that intelligence layer, which I see as opening things up. Was it Marshall McLuhan?

that said the medium is the message. And I think the medium is, it's AI now. I don't think he was thinking about AI when he said that, but it was more about TV. Yeah. Packaging to me is the portal. It's the substrate. It's the way you get in. It's the access point. Yeah. And before we were limited by that tiny portal. There just wasn't enough space. And some people don't care about sustainability. Other people care about it deeply.

you know, dilemma for makers of packaging is, you know, I've got all these, I do my job. I realize, oh, there's all these segments. Do I have different packaging for all these different segments? Well, that's not really practical. So I've got to have this translation personalization. layer and that's software yes so when you do that suddenly it's like oh i'm not limited by space and i'm actually not limited by place this packaging can talk to me

All the way from manufacturing. It can look at, you know, diversion into the wrong market. It can help me with counterfeit. It can help to count my steps so I can. travel less and more rapidly and and then all of the post sales thing and none of that really made sense before you had an ai client that could filter and aggregate and consolidate. And I actually believe that, you know, even people...

I care about sustainability, but do I want to read every sustainability declaration on every product that I buy? No, I just want the assistant to help me buy things that are more sustainable. Take care of the details. I want you to use your AI brain to look back into the supply chain and do the work for me. I want to set the policy. It's like I want stuff that's fresh, organic, flavorful, and isn't going to kill.

the planet. And then AI can now do that if the packaging is joined up. And that's the opportunity I think we have. Right. It enables you to be the CEO of your commerce. Exactly right. That's what a CEO does. You used the term just now, it's set policy. Yes. But if you've got to be too involved in the execution of that policy, you're out of balance. And I think AI is an enabler, therefore.

Yeah. And particularly for you, right? You have certain criteria, you have different policies, you have different things that you care about or that you're concerned about from a health perspective or whatever. But it's that same package that can, because it's funneled through your AI layer versus my AI layer, that now can offer back to me.

you know, more personalized, uh, answers. Um, but it's, uh, you know, it's, it's, it's, it's, it's where things are. And I, I think, uh, and I think it's exciting.

Yeah, it's tremendously exciting because I think there's big problems that we can solve with this technology. If we look at, yeah, we're in the 21st century, but we still have huge problems with waste, cost of goods. recalls and the killing the planet but

You know, we have to save the planet, but also save money. And so these are huge challenges. And they haven't gone away. They haven't been solved. And the good thing is we have the most powerful... uh synthetic intellect in the world we gotta link it

to the real world. We can't just have it sitting there helping our kids with their homework. We want this AI to be helping with supply chains and the purchase experience and the consumption experience and the reuse experience. So I think that's where packaging... comes in. I feel like we've segued neatly into the final... topic area, we're definitely talking about where it's going, although arguably a lot of this is here today. What are your thoughts on the key future drivers? AI is...

clearly one of them. What else can we expect to be changing in the retail landscape? And it doesn't have to all be... frothy stuff uh there are kind of mundane things that we should be aware of as people that are trying to serve this ecosystem i think for me the The first and probably most foundational idea is that everything is going to have to be tagged. Everything is going to have to be smart. You know, whether it's RFID or QR or Bluetooth or...

some other technology that is coming. I think this notion, and I would even put a date on it, by 2030. I don't see... We're not going to be able to move forward. AI isn't going to get the kinds of inputs it needs to be useful, to be revolutionary, unless... everything is tagged and sending in information, sending in signals. I just don't see how it happens. I think we're going to lose that. All of this...

All the talk of efficiencies and productivity and engagement, I think it's going to fall flat. So I think you have to start there at the baseline, and that's going to take investment. And I think what that will mean, I think what that will mean ultimately is Something reasonable and on a very practical level, I think it's going to mean that I don't, I'm not going to see a need for a checkout experience in, in stores any longer. I think if you look at Sam's Club.

Today, when you go into the newer Sam's Clubs, you can go in, you scan the product, and then you just walk out through the U. There's an inverted sort of entryway there, exit, and you go through it. And it knows what you've tagged and it compares to what's on there. We are not far from very simply having everything, forget about it, you have to scan something. It just, it has a tag on it and it moves through this and out you go. So I think.

I think you're not going to have a front. I think we're going to tell our kids, not our grandkids, our kids. Hey, remember when you used to check out? You know, it's sort of like logging on. You don't log on. You're always on. And I think it's going to be the same thing that we've eliminated logging on. I think we're going to eliminate checking out. I think that is certainly coming. And I think the other...

So that's, that's one element. The other element I think is significant increases in automation coming in and smarter automation. So not just a robot that, you know, but that's, that is. adept at everything from, um, you know, pallidization and depallidization and, you know, so dark warehouses and, and things like that to. The store itself, one of the biggest labor drivers in the store is simply stocking the shelves. And I used to do it, so I know how difficult it is.

2 a.m. You've got a stock crew in there opening up boxes and putting products on shelves in a uniform way and turning the cans and then... dismantling the box and then making a bail and all that, it strikes me that automation is going to take over all of that, not even some of it, but all of it. And so I think... The rise of automation, smart automation, is I think the other element that comes in here. And then the third for me would be just a significant increase.

in the opportunity for customization that Steve, when you walk into that store versus when I walk in, I've got. headphones on or I've got, you know, Bluetooth in, I've got my device there. And I literally have a custom experience that is very different from yours.

Yes. It's just very different. Certain ads are going to pop up to me. The path through the store is going to be different. It's going to know that it's four o'clock and therefore it's, we all know, Steve, Monday, Wednesday, Friday, you know, you got frozen pizza or whatever, you know, so. If you're in there on a Monday at four o'clock, I'm not going to waste your time over here. The pathing through the store is just going to be much more programmatic. So programmatic pathing.

I think. And people will pay access. I want access to Steve. I want to break into his path. And here's what I'll pay to get access to it versus today. Everybody gets 10% off the green beans. I just think that you're going to be talking about a technology-enabled store that is much more experiential, but in a way that's not where everybody has the same experience, but you get it.

Uh, you get it on your own. Um, I, that to me is where it's headed. I think, um, you know, I, I, a lot, a lot of the kind of the mental reference points I have is how can we create the best. retail experience that we've ever had, which, you know, in my case, there's like the corner store where the guy knew about every piece of hardware in there and could give you advice and the story and a relationship and he knew you.

knew everything in the in the store how can we take that and make it mass customizable so that you get the the nordstrom you know some of the nordstrom just did amazing work with personal shoppers. How can we take the Nordstrom personal shopper and apply it so that everyone gets that? And then they come home with you and help you use it. And then when you've had enough of it.

They help take it away and find a home for it somewhere else so that you, it doesn't go into the landfill and it does get used and you get some residual value back. Yes. And we have better quality products.

that actually last and have been designed with care. And so I think there's a future where people have better quality products, less waste, less cost. And I think it will take all... the AI and all the ambient Internet of Things, this technology that Walmart's now deploying in all of their stores.

Along with electronic shelf labels and IoT gateways and the smartphones and so forth. It's going to take all of that to bring it together. But I think, you know, in many ways, I feel like we've just started and there's a lot of opportunity. If you think about how miserable the average retail experience is relative to what it can be, that's the delta. If we can scale that up, then the future will be very bright and the people that figure that out.

will be the ones that are dominating the Wall Street Journal headlines in the future. So, Leon, how does... One of the world's greatest experts on retail end up being one of the world's greatest experts on retail. Tell us a bit about your origin story. I know that sounds a little bit like we're talking about a supervillain in a comic book.

I'm assuming like every great retail exec, you started off by actually stocking shelves or something close to it. Is that? No, Steve, you're absolutely right. After I graduated from college, I... I went to work for Hannaford Brothers, which is a retail chain in the Northeast, now owned by Del Hayes out of Belgium. I went into their training program. and ultimately then became a grocery manager in the company's flagship store. Now, I have to be honest with you.

This was not what I had intended walking out of college. I was a reasonably good student and, you know, didn't expect that I would be, you know, cleaning up messes in aisle six. you know, picking up the slack from the night crew the night before and, you know, handling shoplifters and stuff like that. But I did it for a couple of years and I'll be honest with you, it was the thing that ultimately, even though I didn't like it at the time.

So a lesson for everybody. I actually enjoyed it later in life. Looking back on it, I recognize that... You know, it gave me a foundation, kind of a structural foundation for understanding operationally how the industry actually works. nuts and bolts. But I left there, then I went to work for a company called IRI, which is now called Circana, and sort of cut my teeth on the inside side of things. But again, pretty quickly realized that I was going to leverage that.

you know background in stores and you know building end caps and stocking and doing inventories and things like that. So I spent about eight years with IRI kind of working my way through. Then I spent a number of years with some smaller consulting firms kind of heading up their consumer goods and retail practice areas. really bringing together operational understanding with insights before joining Kantar. I was with Kantar for 10 years. And for people that don't know, explain who Kantar are.

And why they're significant? Kantar, I don't know if this is the case any longer, but at the time, Kantar was the world's largest information services company. I headquartered out of the UK. It was part of WPP, the advertising agency, advertising conglomerate. And so Kantar was Information Services, and I was in Kantar's retail. And that was provided insights and consulting services to consumer goods and retail companies, primarily North America. I was their chief insights officer.

And that was how I got the attention of my current employer, which is now Smurf at Westrock. At the time it was Westrock. They had us as a... They were using Kantar retail, and so I got to know a lot of those folks. And I think the billing got a little bit too high because they decided perhaps it was better to have me on board. Very good.

Yeah, yeah. I mean, it's remarkable. You work for a company that, if you were to be kind of, I don't know, reductive about it, sells cardboard, makes cardboard. That's right. Yeah. What you do is so far from forests and pulp and that sort of thing. I think it's... amazing that you are able to kind of go from the CEO strategic level of retail and join the dots between that and Cardboard. And it's quite remarkable.

I want to just go back when you kind of first went from dealing with all the headaches of being in retail into the world of data. And it seems to me that you've been in. thinking, talking, implementing data solutions for like 30 years. What was it that got you in there? And what is it that keeps you in there? What is it that appealed to you? And what do you find so fascinating that you've done?

dedicated three decades of your life to it. Yeah. Well, of course, it helps to feed the family. So that's always good. You're good at it. I think for me, it is... Retail and consumer goods are ubiquitous. You've got... commerce opportunities at every street corner and, you know, in subway stations and on airplanes, there's retail, there's commerce taking place. And there are consumer goods. We all have them in our cupboards and, you know, carry them in our bags and things like that.

What I was intrigued by was for something that was so universal and that everybody touched, it's an industry that everybody touches, unlike others, like, you know, I don't know, airlines or something, that it was still relatively, I would say. unknown in terms of all of the dynamics that take place, Steve, within it.

You've got operational understanding, you've got logistics, you've got technology, you've got merchandising, you've got marketing, you've got finance, you've got virtually every vector. of white-collar America, legal, loss prevention. You know, you could go on and on. There isn't any vector of employment that doesn't really... run through or touch retail at some point. And so I liked the opportunity to bring, therefore, some insights, some cognition, some framing.

to this industry that oftentimes I have found starts with lots of good ideas. Okay. So maybe a new product or a new concept or something like that, but flounders on the way. you know, to getting to, you know, ultimate commercial success, there's a big gap in there. And for me, and that's for anybody, you know, company, large companies, small companies have ideas that, and some of them work, some of them don't.

was really trying to step back and say, rather than seeing everything as more of a whim and a flip of a coin, I was really intrigued by the idea to sort of bring cognition, bring the frontal lobe. so to speak, to all of this. And amongst all of the disparate activities that were going on, try to see if there weren't some theory and therefore some answers to what best practices were.

In such a way that there would be a more solid information base and a more solid capacity to synthesize across all things that seem disparate. I liked to bring order. to what can sometimes seem rather chaotic. Retail, if you walk into any retail operation, right?

It looks pretty chaotic. People running around and employees. It's on the edge of just falling apart, isn't it? You've got something that's actually very hard, very hard. And you've got a bunch of underpaid, overworked... people that are stretched at the very limits because they're under such huge competitive pressures that's right And so it is on the edge of all going horribly wrong. And it's the people that can... Sometimes it does.

You know, marshal the chaos and head towards consistency. I like that. I like thinking about it as a bit of a... I like being sort of a...

symphonic about it, maestro type, you know, sort of, and recognizing where I see patterns, you know, constellations amongst the stars. And so for me, that was what appealed to me. Well. I can relate to it. So my career in retail is half the length of yours and probably a fraction of the depth. But I got into it at Qualcomm because, and I think what I saw was... This is a segment we can all relate to because we all buy things. Everyone buys things.

And so every one of our engineers at Qualcomm, and there were, I don't know, about 35,000 of them, were coming up with ideas, incredible IP factory, inventions, innovations. And of course, they all related it to retail. And retail is like, it's a bit like being a basketball star or a rock star. We all kind of know the gist of what you need to do to do it. But very few of us can actually.

do it and you know the greats in retail it's it's more complicated than you think and so i just found that fascinating peeling away the layers and as technologists who are trying to build solutions to design solutions of the best ways we can get them adopted is by inserting them into retail. But we then hit the rocks because actually it's a lot more complicated than people know. And you've got that knowledge.

I definitely appreciate you sharing everything that you shared with us today, but I don't want you to leave without sharing the answer to a very important question, which is what three songs have... meaning to you especially. Are you very musical? I'm not very musical overall, but there are several songs that I probably overplay. And have probably had a disproportionate meaning to me. So it's a good question. I wouldn't consider myself, you know, musically.

talented or inclined or anything like that. I was never good at instruments or things like that. But there are always a few songs that I, and perhaps my wife might say I overplay. Yeah, the first one, and they're eclectic, so try not to see any patterns here. That's the best. The first one is Aqualung by Jethro Tull. I like a lot of what...

Jethro Tull has done over the years. And I used to listen to Aqualung quite a bit when I was in college. And so when I hear that song, it reminds me of my Halcyon days. back in college. That is a legendary group. Yeah, it's a legendary group. Yeah, they are, aren't they? But not one that I'm familiar with, really. And I spent a lot of time listening to...

music from back then. So I'm going to invest some time in Aquilo. All right. Thank you for that. All right. I can give you recommendations on that song and a few others they've done. So that's one. The second is Barry Manilow's Copacabana. And now that's crazy. I know, I know, I know. I told you this was eclectic. I like the Copacabana because back in the day, I was trying to impress my future wife. And so I invited her to a karaoke bar in southwest Connecticut.

And the song I chose to sing at the time, which I picked it sort of randomly, was the Copacabana. And I remember about halfway through the song, Steve, I looked and the far corner of the bar where my wife was... Well, my future wife wasn't. She was just so horrified. But she went on to marry me. So I think there's something to it. There's something to the Copacabana. But I remember her look on her face.

what's horror so i thought oh maybe i don't know if i picked the right song but anyway turned out well and then the the second one also relates to my wife the song we played at our wedding was uh endless love i forgot who that was was that uh Diana Ross. I forgot who sang it, but Endless Love. And that was the song that we had at our wedding. And so good memories there. So those are the three. Yeah, I love those choices and I appreciate you making them personal.

Very good. Well, Leon, it is always a pleasure talking with you and this has been no exception. Thanks very much for sharing with us and I hope this is...

one of many conversations that we have going forward. Thank you very much. I appreciate your taking the time too. Have a great day. So that was it from Leon. I hope you enjoyed the discussion as much as I did. And I hope we can reconnect with Leon in the future because he's got his finger on the pulse. So a busy week for me. I'm actually doing jury duty. So I've got to rush off and serve on a jury.

Can't talk about the case. You're not allowed to. And that wouldn't be appropriate. So my mind's on that. What have I been listening to? There's Roxy Music, actually. Their original album.

which is called Roxy Music is Phenomenal. And it has Virginia Plane on it, which was a huge, one of their big hits. And some very unusual music. I can't even... describe some of it so I'm not going to but I'm going to recommend it to you and thank you for listening to this podcast for coming back listening to the end Thank you to Aaron Hammock for doing the editing and publishing of it. And take care, enjoy the journey, and see you next time.

How do more than 100 million Fortnite players join the battle without lag? AWS is how Epic Games scales up to keep them in the action. AWS powers next-level innovation for millions of businesses. This episode is brought to you by Capital One. Capital One's tech team isn't just talking about multi-agentric AI. They already deployed one.

It's called Chat Concierge, and it's simplifying car shopping. Using self-reflection and layered reasoning with live API checks, it doesn't just help buyers find a car they love. It helps schedule a test drive, get pre-approved for financing, and estimate trade-in value. Advanced, intuitive, and deployed. That's how they stack. That's technology at Capital One.