Retail Rundown: Outlook for Summer 2021 – with João Diogo Falcão and Jeff Roster

Julia Raymond Hare:
Hello, everyone. Welcome to the Retail Rundown. Today we are joined by guests JD Falcão and Jeff Roster. JD is the Chief Technology Officer at AiFi, a retail tech company that helps retail stores of all sizes become fully autonomous. Really hot technology, and a fun stuff. So, we’re going to get to dig into that a little bit. And also returning to our show this week is Jeff Roster. Jeff is the chairman of the Retail Advisory Board at Apptricity and the former vice president of strategy at IHL group. Jeff is also the co-host of his own podcast, This Week in Innovation. Be sure to give him a listen on Spotify, Apple Podcasts, or wherever you download your shows. JD, Jeff, thank you both for joining the show today.

JD Falcão:
Thank you for having us. It’s great to be back.

Jeff Roster:
Yeah, I’m glad to be here.

Julia Raymond Hare:
Good to have you. It might be the first show where we have all J names, so go us. Let’s dive in a little bit to the news. So just in time for summer, the United States, we’re returning to this state of normalcy after a rigorous six months of vaccinations. And the CDC announced last week, it would be easing its guidelines on COVID-19 preventative measures that include social distancing, mask wearing for vaccinated individuals. And as it stands, 60% of American adults have received at least one dose of the vaccine. So several retailers, including some of the big hitters, Walmart, Trader Joe’s, Costco, they have mixed mass requirements for vaccinated shoppers per the guidelines. And in April, store traffic at Walmart rose for the first time in a year. And during last week’s earnings conference call, Walmart CEO Doug McMillon said customers want to get out and shop. Jeff, I’ll pass this to you. What are your thoughts about the state of retail as we’re moving into these summer months? Are you feeling a similar sense of optimism that the folks shopping at Walmart are feeling?

Jeff Roster:
Well, I think across the board for sure. I think the country has been through… The world’s been through an amazing challenge. I think the majority of us really stepped to the step to the front and took care of business. And I think everyone I look at is ready to carefully, respectfully return to normal. And I think retailers are sensing that. The concern I do have though is I literally am very concerned along with a lot of retailers that we will not be able to hire enough people, which is an interesting phenomenon. That’s probably something that’s going to be with us for the next couple of months.

Julia Raymond Hare:
And why do you think that is? What are what’s driving that lack of-

Jeff Roster:
Well, to me, there’s no question about it. I think we were extremely generous with our unemployment. I think every restaurateur I’ve talked to in the last couple of weeks, and really actually the last six months, have noted that they were concerned when it was time to begin to really open up that they were not going to be able to recall their workers, because they’re just simply making too much on unemployment with the stimulus and everything else along those lines. So I think that’s a big concern. I do think there’s a percentage of those folks that are generally still concerned about engaging with the public. But I think that’s, I don’t know, I think that’s probably 10% or 15% at best. In the service industries, our people aren’t always the most paid and so making almost the same on these stimulus packages is it’s an easy call for those folks. And it’s going to be a challenge.

Julia Raymond Hare:
That’s definitely going to be a challenge. JD, you have a lot of clients in retail, especially in the grocery space. What are you hearing from their sides? What’s your opinion?

JD Falcão:
Well, they’re all excited obviously for having customers to revisit their shopping habits. What we’re hearing from them is that there’s still apprehension, and the mass situation and what they have to abide by is creating some fear that the retailers have to adapt and change the whole processes. And that’s kind of heavy. On the other hand, it really triggered something for us at AiFi because we are helping retailers to prepare that as well. They understand that all customers, it takes time for all of the customers to feel comfortable inside the stores. Since COVID hit, we moved into this what we call the hybrid solution. This is to really allow customers to choose how they shop.

JD Falcão:
We’re briefly talking about this before on how customers want to have the choice, whether to use mask or not, whether to shop with a cashier in front of them, interact with a human or not. And I think AiFi really is uniquely positioned to be able to provide these options, whether it’s using computer vision technology to skip the checkout process and not really interact with the staff members, or still maintain a store that has that your cashiers for people who do still want that interaction, who do still want to whether it being cash or have recommendations on the site and still benefit from AiFi’s technology. So our retail, our clients are first and foremost really excited to have customers come into their stores.

Julia Raymond Hare:
I think it’s a good position, JD. You said it takes time for customers to feel comfortable and you have a hybrid solutions that the customer gets to choose. And with customers being more open to adopting new technology is like Apple Pay or whatever it is, and looking for signage, being more used to that. Where in the past, I think we all kind of we’re a little bit oblivious. It seems like the adoption rate would be faster among consumers who are getting used to doing the cashierless checkout. Would you say that’s true or?

JD Falcão:
Yeah, absolutely. There was a huge push. This global pandemic really, really pushed the adoption of these technologies from very simple things like Apple Pay to do the full autonomous checkout experience. And we see that from the shopper side as well as from the retailer side, to be able to enable their shoppers. They know if they don’t provide that to them, their neighbor will. So it’s this huge push to adopt these technologies.

Julia Raymond Hare:
Absolutely. Just so our listeners know, this is just an interesting tidbit back to Walmart’s opening and consumer behavior. People are purchasing items related to personal care, celebration and travel. And Brett Biggs, their CFO, thinks that’s reflecting the reopening of the economy and their strong earnings. And also notable, teeth whitener and new clothes are back on people’s shopping list. That is pretty interesting.

Julia Raymond Hare:
I’m switching over to our next topic here. Sports venues were hit really hard during the pandemic. They were closed for months last year before they finally opened back up, and even then it was limited capacity. But now we’re seeing some will open during the summer. So, Fenway Park will open at full capacity this weekend. And the Indy 500 is also scheduled for May 30th. And as many of us know, sports venues often house unique retail environments that are offering exclusive merchandise to fans. So JD, how has the pandemic impacted sports retail and hospitality? What changes can we expect moving forward?

JD Falcão:
More recently sports venues are coming back, right? So we’re having the retailers being able to put their stores into these venues. So they’re becoming the spotlights in these next few months. However, there are still crowding concerns which mainly occur at the entrances, food stations, and even on the merch stores. The retailers are essentially reducing the capacity and adding proper spacing in the lines using floor stickers. That’s all becoming common practice. But we’ve also seen venues create entirely new safety teams to monitor a guests’ temperature and ensure everyone keeps their face mask on. The industry is taking safety really seriously, and I personally am very excited to begin attending these events again. I’m a big sports fan.

Julia Raymond Hare:
Me too. Jeff, what is your take on the world of sports and the reopening and how retailers are or should be perhaps considering getting more involved in aligning with those?

Jeff Roster:
For me, it just couldn’t come fast enough. Out here in California, we’ve got the Warriors in a playoff run. We’ve got the Lakers in a playoff run. We’re actually concerned that in California, we’ll still have limited capacity and we’re going to be going up against teams in the East that are.. They will be playing in front of a full stadium and so, we’re actually beginning to think, oh my gosh, we have a competitive disadvantage on that. I think it’s a great sign. They feel safe to get out and start moving around to relight this economy, get things moving again. So I’m all for it. Do it smartly. Do it safely. But as far as being out in an open arena, boy, I see very, very little concerns about that from my perspective.

Julia Raymond Hare:
Shout out to the Warriors and the Lakers. I’ll also mention [crosstalk 00:10:33]-

Jeff Roster:
Tough loss last night. Ouch.

Julia Raymond Hare:
Yeah, not great. That was rough. But if we look over to the NHL, just a little tidbit for our listeners, they make almost $1 billion every year, selling national TV and internet streaming rights. But did you know, 70% of their profits actually come from the ticket sales for the in-person events and in-arena purchases during games. That’s pretty interesting. And by the way, JD, what’s your sports team? Do you have a favorite?

JD Falcão:
Yeah, I’m a Warriors fan.

Julia Raymond Hare:
All right. Well, we got two Warriors fans. I go for the Orlando Magic, but no one talks about them. So anyway, JD, AiFi deployed a NanoStore at the Indianapolis Speedway, which will host the Indy 500 later this month, and I got to see some of the preview pictures. That was really exciting. And I wondered if you could tell our listeners about the new store, about NanoStores, and how it could improve the fan experience.

JD Falcão:
Absolutely. So we’ve deployed a NanoStore concept which is a shipping container size store that goes into these events. This one is sitting right in front of gate 1 of the Indianapolis Motor Speedway. So we’re very, very happy to be partnering with Penske to deploy the store. It’s fully autonomous, so that means that customers can come in, shop as they will, and walk out. There’s no cashier or anyone in the store. And we offer drinks, snacks, merchandise for the fans to enjoy. It’s already live and it’s providing a safe checkout-free shopping experience. And it’s going to stay there for customers attending the practice, race labs, and leading up to the event itself on May 30th.

Julia Raymond Hare:
Very cool. And how big is it? What’s the size?

JD Falcão:
It’s a typical shipping container size. It’s about 180 square feet. It’s quite small. It has like a cooler with some drinks. It has a section of snacks and then another section of merchandise. It’s quite small, but it’s mobile and can go into all of these events. It’s just the right size for people who want to go in, get their snacks and merchandise and go check out the event.

Julia Raymond Hare:
You said it’s completely mobile, so it sounds like you can move it in and out. And if I was a retailer, it’s just my personal opinion, I think people are going to be ready to spend money. If they’re going to a sporting event, it’s been a year of not being able to, and you’re finally out there, you’re ready to have a good time and not worry about things. And I think that there’s a lot of other retailers that should try to find ways to align with these different sporting venues and get in there. Jeff, did you have any other comments on the idea of nano stores at different sporting events or what the future holds?

Jeff Roster:
Well, I love the idea. I mean, if you think about anything that we’ve gone through the last year, year and a half, the idea of touchless commerce or contactless commerce just makes a ton of sense. I mean, if I look at one of my favorite retailers, it’s a grocery store kind of high-end, and it used to be the checkout experience was phenomenal. Well, now the checkout experience is a giant wall of plexiglass and I’ve got to bag up my own stuff if I bring in my own shopping bags, which we were told to do. And so it went from an amazing checkout experience to a silly checkout experience. And so I’ve been using this self-checkout more and more because there’s no really cool checkout experience anymore. And so when we look at where we’re going, if we’re going that direction, what we’re talking about here just makes a ton of sense.

Jeff Roster:
And I think more and more people are going to be interested in that. It’s clearly safer. It makes it work. And the adoption looks like it’s beginning to uptake. I’m seeing more and more studies around contactless retail showing interest. Really good numbers coming out of several studies this year looking at overall IT spend increasing, which is awesome. Return to the projects that were pre-COVID, which is also awesome. And the whole digital transformation of retail is really accelerating. So this absolutely makes sense. It would make sense to me to see it uptake, and I would expect to see it really have a good run in the next four or five years.

Julia Raymond Hare:
Yeah. I agree with all those things and also not having to wait in line. I think that makes it safer too, right? We’re not lingering around other people. You just go in and go out. And that’s amazing because people hate waiting in line. It will be really exciting experience for people to interact with that technology and see that it does in fact work. You can deploy it quickly, and really cool stuff that AiFi is doing.

JD Falcão:
I think there are two points here that are very interesting. You mentioned the shoppers, so not having lines, right? But I think from a retailer perspective, the overhead of trying to put a store like this in one of these events, the mobility of it, it’s really key, right? You can have one of these stores go from event to event. For example, this one in Indianapolis, it’s going to move after May 30th to the visitors center and it’s going to continue serving guests. And then in August, it will move back to Gate 1 for the annual Brickyard Racing event. So it’s really interesting that we can make this experience go to where it’s needed, and these events happen functionally in all these different locations. And we can just put one of these everywhere.

Julia Raymond Hare:
Is it hard to move or does it just connect to like the hitch of a truck and you just drive it down the road?

JD Falcão:
Well, that’s why we picked the size as a shipping container because it’s a standard size that there are trucks that can haul these. So, it’s actually was a conscious choice to make it that size, which is small enough it can go into these places but it’s actually standard that we can move it around very easily.

Julia Raymond Hare:
Oh, okay. Interesting. Good choice. Good choice. Also in the news for our listeners, Google is opening their first shop and it’s expected to compete a little bit with Apple, and that is in New York City. Other than that, I don’t have a lot of other retail news to chat about today. We had a really busy week with our team during Shoptalk for women virtual, and we spoke with a lot of amazing retailers. So if you’re listening, go ahead and check out the recap and all the great insights we got directly from those women leaders on our website at rethink.industries. And JD, Jeff, if our listeners want to get in touch with you, what’s the best way to do so?

JD Falcão:
For me, hello@aifi.com, or even my personal email, which is not hard. It’s my name is joão@aifi.com.

Jeff Roster:
And for me, it’s LinkedIn. My profile is open or on Twitter @JeffPR, or email, jeff_roster@outlook.com.

Julia Raymond Hare:
Perfect. Jeff, JD, it was amazing to have you on the show today, and I hope to have you back again soon.

JD Falcão:
That was a pleasure. Thank you.

Jeff Roster:
Thank you very much.