How 2D Barcodes Are Changing the Retail Landscape with Chuck Lasley

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[00:00:39] Think about a factory overseas and as they're picking merchandise, probably not a lot of

[00:00:43] tech involved.

[00:00:44] They might have a handheld scanner where they're scanning barcodes.

[00:00:47] They're probably not going to invest in a high end RFID system to capture those

[00:00:51] and get your ASN with serialized information about what went in that carton.

[00:00:56] But now if they scan that 2D barcode, now I know exactly what went in that carton to the

[00:01:00] specific item serialized.

[00:01:03] An even better use case is at the point of sale.

[00:01:06] Think about that in conjunction with loss prevention.

[00:01:08] If I bring this item up to the point of sale, my associate scans the 2D barcode.

[00:01:14] Now I know that specific item was sold at this point in time for this much in this

[00:01:18] store.

[00:01:19] I walk out my door and if I happen to have an RFID system there for loss detection, I see

[00:01:24] that tag and I go, you know what?

[00:01:26] You're good to go.

[00:01:27] I know there was a sales transaction just minutes earlier and I'm not worried about

[00:01:31] you.

[00:01:32] Hello and welcome to the next level supply chain with GS1 US, a podcast in which we

[00:01:37] explore the mind bending world of global supply chains covering topics such as automation,

[00:01:43] innovation, unique identity and more.

[00:01:46] I'm your cohost, Reed.

[00:01:48] And I'm Liz.

[00:01:49] And welcome to the show.

[00:01:52] Reed and I just had a great conversation with Chuck Lassely from Dillards.

[00:01:55] He talks about how Dillards has participated for years in RFID and how they're working

[00:02:00] towards 2D within their system.

[00:02:03] There's definitely benefits and use cases for 2D barcodes that are a little different

[00:02:08] than RFID.

[00:02:09] He talks about the transition from 1D barcodes to 2D barcodes and how customers are

[00:02:15] requesting more information and how the 2D barcode can address those concerns.

[00:02:21] It was a great conversation.

[00:02:22] We really enjoyed it and hope you do as well.

[00:02:25] Hey, Chuck, welcome to the show.

[00:02:28] Thank you very much.

[00:02:29] It's so great having you.

[00:02:30] We're really looking forward to a really cool conversation before we jump into it.

[00:02:34] Just tell us a little about yourself, your background and your role at Dillards.

[00:02:39] My name is Chuck Lassely.

[00:02:40] I am the IT director of application development for Dillards.

[00:02:44] I am a 32-year veteran in the retail field.

[00:02:47] I've been with Dillards the whole time, started out as a programmer trainee, worked my way

[00:02:52] up through programmer analysts, team lead manager, and then when they found out I couldn't

[00:02:56] program, they made me a director.

[00:02:58] As director, I have responsibilities for all of our applications that it takes to

[00:03:02] run our company.

[00:03:03] We do a lot of in-house development and have a wide variety of applications that

[00:03:08] we've created in-house, supported in-house, and that's been one of our competitive

[00:03:13] advantages in the eyes of the Dillard family because as they want to move the business,

[00:03:17] they can take that right in-house and say, hey, here's what we're doing and we can get on

[00:03:21] it immediately instead of having to slog through contract negotiations and extra upcharges.

[00:03:26] So statements of work, legal review.

[00:03:30] You know the routine.

[00:03:31] Yeah.

[00:03:32] Yeah.

[00:03:33] For those not familiar with Dillards, we are primarily a Southern based apparel retailer.

[00:03:37] We like to position ourselves somewhere between Macy's and Nordstrom's to kind of give

[00:03:41] people a point of perspective.

[00:03:43] We are in now 30 states and we have about 248 full service locations and 27 clearance stores.

[00:03:52] And then we have a great presence online with Dillards.com.

[00:03:55] Excellent.

[00:03:56] I'm glad you covered that because I know myself, I was from New York, lived in New

[00:04:00] Jersey, now live in Charlotte, North Carolina.

[00:04:04] And I do remember there being a store in New Jersey at one point but there was only

[00:04:08] one, maybe it was somebody else that was close.

[00:04:12] But when we moved down here, I was like, Dillards.

[00:04:15] It's like Macy's saying to my wife, she's from New York as well.

[00:04:19] And so yeah, we frequent it.

[00:04:20] So we like it.

[00:04:21] Let's jump into today's conversation, which is really around 2D barcodes, RFID and what

[00:04:30] this all means.

[00:04:31] I mean, first off, 2D barcodes have been around 30 years.

[00:04:35] Liz, 30 years.

[00:04:36] Long time.

[00:04:37] Yeah.

[00:04:38] The regular barcode has been around 50 but post COVID, everyone knows what a 2D barcode

[00:04:45] is now or QR code for the mainstream.

[00:04:47] It's like saying Kleenex or Xerox but we all know what we're kind of referring to.

[00:04:52] And RFID has been around for a really long time as well.

[00:04:56] I'm interested in Dillards.

[00:04:58] Are we leveraging it?

[00:04:59] Have we been leveraging it?

[00:05:00] Do we have plans for the future?

[00:05:02] Where do both of these sit with you?

[00:05:04] RFID has been my baby since the early 2000s.

[00:05:08] We got introduced to it by the University of Arkansas.

[00:05:11] Gentlemen, everybody's familiar within that space.

[00:05:12] Dr. Bill Hardgrave, we made several trips up the road.

[00:05:16] We're located in Little Rock, Arkansas.

[00:05:17] He was up in Fayetteville about a three hour drive away.

[00:05:20] So it was very convenient for us and they built the RFID lab up there and we took

[00:05:26] full advantage of it.

[00:05:27] We spent a lot of time with Bill and Justin patting up there at the lab and

[00:05:32] we kind of learned along with them as they were growing that lab environment.

[00:05:36] We did an early white paper with them on the study on item level accuracy using RFID.

[00:05:43] You know, a lot of people started out with carton level tracking.

[00:05:46] I think Walmart's early initiatives were around carton case level tracking and we saw

[00:05:51] that was well and good but really where you get the bang for the buck is when you

[00:05:54] can be able to look at each individual item and track your inventory accuracy using

[00:05:59] RFID at that level.

[00:06:00] So we did some case studies with them.

[00:06:02] They had a white paper and yes, we proved one, the technology works and two, it can

[00:06:07] increase your inventory accuracy significantly.

[00:06:10] It can reduce your concealed out of stocks, your frozen out of stocks where you're

[00:06:13] sitting there fat dumb and happy thinking you have inventory on the shelf.

[00:06:16] Most shoplifters aren't polite enough to tell us what they've stolen from us.

[00:06:19] So we have to have a way to double check that and the cycle counts that we were

[00:06:23] able to do using RFID were much more time efficient labor reducing than doing

[00:06:28] a regular barcode scan and inventory that way.

[00:06:32] Did you find that because they were easier, did you do that more often?

[00:06:36] Oh, absolutely.

[00:06:37] It enabled us when we initially started out, we had a great business partner

[00:06:41] with Levi's and they were very early to the game.

[00:06:44] They saw the value in RFID item level tagging and so we partnered with them

[00:06:50] and that's really where we put our focus was on men's denim specifically

[00:06:54] and we would go out weekly and cycle count the merchandise.

[00:06:58] We found that we could do an RFID cycle count in a, I would say less than an hour

[00:07:04] and that includes working discrepancies whereas it took five people two hours

[00:07:09] to do that with barcode and that was really when the light bulb went on

[00:07:12] and it's like, okay, we've got a tool here that will allow us to adjust

[00:07:16] our perpetual inventory and put us in a much better stock position

[00:07:20] throughout the year instead of waiting for those annual inventory

[00:07:23] cycles to come around.

[00:07:25] Yeah, because with the barcode you need line of sight, have to see it,

[00:07:28] touch it each one individually but with RFID I just need to be in the room.

[00:07:33] I need to be in proximity and I can do a whole rack with the magic wand

[00:07:38] as they used to say.

[00:07:39] Right and it's very forgiving in the sense that if you and I, Liz,

[00:07:43] are doing an inventory and we're in the same area and you go scan a rounder

[00:07:47] and I don't know that you've scanned that rounder and I come along

[00:07:49] and scan behind you, we've just doubled our counts whereas with RFID,

[00:07:53] if you waved your magic scanner throughout the area, picked up all these tags

[00:07:57] and then I come along behind you and do the same thing,

[00:07:59] the only thing I've added were any tags that you missed.

[00:08:02] Yeah, that's fantastic.

[00:08:04] It's really cool and I was wondering to usually change management at a store level,

[00:08:09] I imagine being difficult but this takes so much manual work out of their hands.

[00:08:15] How was that transition for the folks actually doing the work?

[00:08:19] That's a tough one and I'm going to say it depends.

[00:08:21] Anytime you have humans involved, there's going to be challenges.

[00:08:24] There's going to be fear of change.

[00:08:26] There's going to be mistakes made.

[00:08:28] We can set ourselves up for a lot of heartache by just handing an associate

[00:08:33] an RFID scanner and say just point and shoot that's all you've got to do.

[00:08:36] It's really not quite that simple, right?

[00:08:38] You guys have been around in this space long enough.

[00:08:40] You know that you've got to get in close proximity.

[00:08:42] You've got to get those reassuring beeps that occur there

[00:08:46] saying that you're picking up new tags

[00:08:48] and if they don't give it that due diligence,

[00:08:50] you can put yourself actually in a worse position inventory wise

[00:08:53] because now you're omitting items from your inventory, reducing it.

[00:08:57] Maybe you're generating new orders for replenished stock

[00:09:00] that you really don't need and before you know it,

[00:09:01] you find yourself in an overstocked position.

[00:09:03] So it was about retraining our associates.

[00:09:06] With barcode scanning, you have that warm fuzzy.

[00:09:08] I pull up a ticket.

[00:09:09] I line the sites up and I pull the trigger.

[00:09:12] I hear the beep. I know I counted it.

[00:09:13] RFID, you just kind of fly in blind there waiting for the beeps

[00:09:17] and hope that you're getting everything.

[00:09:18] Yeah, a little bit different.

[00:09:20] There's nuance and pros and cons to everything, right?

[00:09:23] There's other challenges

[00:09:25] and I know we're going to continue talking about both these

[00:09:27] but what about 2D?

[00:09:28] What about QR codes?

[00:09:30] Are you leveraging them?

[00:09:31] Are you planning for them?

[00:09:32] Are they in the radar of Dillard's IT rollouts?

[00:09:36] Given that we started out with RFID,

[00:09:38] we had this tool now that we could use

[00:09:40] to collect all of this data

[00:09:42] but in order to collect it

[00:09:43] you had to invest in the infrastructure.

[00:09:45] You had to have whether it be a tunnel reader

[00:09:47] in your distribution center,

[00:09:49] fixed readers at your points of egress,

[00:09:51] handheld interrogator.

[00:09:53] There was an investment that came along with that.

[00:09:55] I forget what event I was at

[00:09:56] but one of the speakers and I believe it was a GS1 event

[00:09:59] came along and was sharing about the 2D barcode

[00:10:03] and how the GS1 digital link was going to change things

[00:10:08] and that was kind of an aha moment.

[00:10:10] Believe it or not back when we introduced RFID

[00:10:12] and our stores back in the early 2000s

[00:10:15] on the tickets we created,

[00:10:17] we put an Aztec symbology barcode on there

[00:10:21] and the thing that was in that was the EPC

[00:10:24] because we wanted to be able to capture that

[00:10:25] at our point of sale to know exactly what we sold.

[00:10:28] We didn't have RFID at each of our point of sales

[00:10:31] and in a large store we could have 50, 100 point of sales.

[00:10:34] That's a huge investment.

[00:10:35] So we were leveraging the barcode scan

[00:10:37] at the point of sale to say

[00:10:39] I sold this specific item.

[00:10:40] So that was kind of my aha moment

[00:10:42] and it's a thank goodness this is coming moment

[00:10:45] and I know I drove Amy Reeder and Amber Walls crazy

[00:10:50] because I got on a call with them.

[00:10:52] They were trying to explain GS1 digital link to me

[00:10:55] and I was like, but it's just the EPC.

[00:10:56] I just need the EPC there.

[00:10:57] No, it's not the EPC.

[00:10:59] It's a URL, your G10, your serialization.

[00:11:02] That's what you need in there.

[00:11:04] Don't worry about the EPC.

[00:11:05] It was fantastic and now this was the missing link

[00:11:08] that we've been looking for all along.

[00:11:09] Now we have a way to tie RFID scans

[00:11:13] to any place we don't have RFID infrastructure

[00:11:15] we're still doing a traditional barcode scan.

[00:11:18] We can capture that.

[00:11:18] We can get that serialized data at each of those places.

[00:11:22] So think about a factory overseas

[00:11:24] and as they're picking merchandise,

[00:11:27] probably not a lot of tech involved.

[00:11:29] They might have a handheld scanner

[00:11:30] where they're scanning barcodes.

[00:11:31] They're probably not going to invest in a high end RFID system

[00:11:35] to capture those and get your ASN

[00:11:37] with serialized information about what went in that carton.

[00:11:40] But now if they scan that 2D barcode,

[00:11:42] now I know exactly what went in that carton

[00:11:45] to this specific item serialized.

[00:11:47] To me, that's a huge win,

[00:11:48] but an even better use case is at the point of sale.

[00:11:51] Think about that in conjunction with loss prevention.

[00:11:54] If I bring this item up to the point of sale,

[00:11:57] my associate scans the 2D barcode.

[00:11:59] Now I know that specific item was sold

[00:12:02] at this point in time for this much and this store.

[00:12:05] And when it walks out my door

[00:12:06] and if I happen to have an RFID system there

[00:12:09] for lost detection, I see that tag and I go,

[00:12:12] you know what, you're good to go.

[00:12:14] I know there was a sales transaction just minutes earlier

[00:12:17] and I'm not worried about you.

[00:12:19] Now the other events that come through that door,

[00:12:21] I might want to look into those a little closer.

[00:12:23] It's a lot of pieces coming together

[00:12:25] to this like big puzzle, right?

[00:12:26] And we've been talking about in the industry

[00:12:30] this thing called Sunrise 2027 with Chuck and Reed.

[00:12:34] You know what this is, but just for our listeners.

[00:12:36] So Sunrise 2027 is an industry initiative

[00:12:40] whereby 2027 retailers will be able

[00:12:43] to scan a 2D barcode at point of sale

[00:12:47] and utilize that G10 information.

[00:12:49] So you won't see that horizontal 1D barcode

[00:12:53] going away anytime soon,

[00:12:55] but there will be the capability to use

[00:12:58] to your point Chuck this 2D barcode

[00:13:00] at point of sale with the information needed for checkout.

[00:13:05] You already mentioned loss prevention

[00:13:06] as one of the operational efficiencies.

[00:13:09] Are there other use cases

[00:13:11] that you all are seeing with the 2D barcode

[00:13:13] and additional information that can be encoded?

[00:13:16] There are so many use cases.

[00:13:17] First of all, I can back up a little bit.

[00:13:18] Sunrise 2027, that is fantastic.

[00:13:21] And I have to admit when I first heard that

[00:13:22] I was like, that is too far out.

[00:13:25] We've got to be moving faster than that.

[00:13:27] So I rebranded it internally here as Sunrise 2025.

[00:13:30] Nice.

[00:13:31] Right, we'll take it.

[00:13:32] Yeah, right?

[00:13:34] So that's kind of the initiative we've been pushing

[00:13:36] and we're going to scan that 2D barcode

[00:13:38] at the point of sale this year.

[00:13:39] So it's been a journey.

[00:13:41] I'll be honest about that.

[00:13:42] I would love to say that everything has just been perfect

[00:13:45] and fallen into place,

[00:13:46] but there's going to be some hurdles with this.

[00:13:48] Probably the first is with this transition period.

[00:13:51] We've got so many systems that are incapable

[00:13:54] of handling a QR code at this time

[00:13:56] and extracting that G10 from the QR code.

[00:14:00] They're not aware of the GS1 digital link format.

[00:14:03] No problem to get to that.

[00:14:04] That's great.

[00:14:05] We have a standard for that.

[00:14:06] We can tell everybody how to do it,

[00:14:07] but system changes take time, right?

[00:14:09] And I'm not just talking about our internal systems.

[00:14:10] I'm talking about any third party system.

[00:14:12] We have in our warehouses where they scan UPCs.

[00:14:15] So our first step is to have this transition ticket

[00:14:19] that has both the 1D and the 2D barcode on it.

[00:14:22] In a supermarket environment,

[00:14:24] I think some testing took place with Memphis University

[00:14:27] and they found that they could run that item

[00:14:29] across the flatbed scanner.

[00:14:32] And it was smart enough to look and see

[00:14:34] I've got a 1D symbology, I've got 2D symbology.

[00:14:37] I'm not going to count the item twice.

[00:14:38] I'm just going to give preference to one over the other.

[00:14:42] Unfortunately, we found the same is not true

[00:14:44] with some of the handhelds we're using

[00:14:46] and some of our point of sale scanners.

[00:14:47] So it is expecting one symbology or the other.

[00:14:51] So we're gonna have to be very targeted in our aiming.

[00:14:54] It's not the end of the world if you hit the wrong one

[00:14:56] you're still gonna get the net effect

[00:14:58] which is a capture of UPC one way or the other.

[00:15:00] The question is are we gonna get

[00:15:01] that serialized information as well

[00:15:03] and be able to leverage that?

[00:15:05] So I envy companies like Puma

[00:15:08] who have this vertical integration

[00:15:11] where they controlled their tagging

[00:15:12] and any touch point of those tags

[00:15:14] because they ripped the bandaid off

[00:15:16] and they went straight from 1D to 2D

[00:15:17] and they didn't have to go through this transition period.

[00:15:20] And that is probably the ideal path if you could do that.

[00:15:24] We're gonna have a little bit of pain.

[00:15:26] That's a hard path to do though, right?

[00:15:28] I mean, you're Dillard,

[00:15:29] you guys couldn't even imagine how many SKUs you have

[00:15:32] in terms of different types of products

[00:15:34] from jewelry to makeup, to clothing,

[00:15:37] to shoes, to accessories and bedding and everything.

[00:15:42] So it's a lot of different manufacturers,

[00:15:44] a lot of different products to consider

[00:15:46] and how do you get everyone to change over at the same time?

[00:15:49] And to move that over

[00:15:50] and then how do you then coordinate

[00:15:53] with other retailers where the product

[00:15:55] is in their environment too

[00:15:56] and they're not ready to do it?

[00:15:58] It's a big lift.

[00:15:59] Have there been any significant learnings

[00:16:03] that you've taken away as you're migrating

[00:16:05] and doing this transition from 1D to 2D?

[00:16:08] Yeah, and that was the first one, right?

[00:16:10] That the scanning technology is going to be very important

[00:16:13] in how we handle that.

[00:16:14] I can't get to the 2D fast enough

[00:16:17] where it's just explicitly the 2D.

[00:16:18] Plus if you look at your tickets,

[00:16:20] the amount of real estate you have

[00:16:21] on a UPC ticket today is very limited.

[00:16:23] So we had to scrunch some information down.

[00:16:26] We had to maybe take a few key items off

[00:16:29] to make room for this additional 2D barcode.

[00:16:31] Now once we get that space back,

[00:16:33] we're gonna have even more space to do whatever.

[00:16:35] Or perhaps-

[00:16:36] You're carrying both so it takes up more space.

[00:16:38] That's a bit of a challenge.

[00:16:39] And for those not familiar,

[00:16:41] at a very basic level,

[00:16:43] the GS1 digital link consists of a URL plus the G10

[00:16:49] and then additional information

[00:16:50] and our additional information is the serial.

[00:16:52] We want the G10 and the serial information

[00:16:54] that goes along with that.

[00:16:55] You have the opportunity

[00:16:56] to put a lot more information in there

[00:16:58] but at a minimum

[00:16:59] that's what we're looking for in our initiatives.

[00:17:00] We want the URL, the G10 and the serial.

[00:17:03] And because you're leveraging the serial in your RFID today.

[00:17:07] Exactly.

[00:17:08] That marries it up with our RFID read.

[00:17:09] So that's what you can't do with a UPC.

[00:17:13] It's this G10, no serialization behind it.

[00:17:17] And maybe for some of the folks talk about it

[00:17:20] like the advantages of having serialization versus non.

[00:17:24] One thing we talk to our vendors a lot about

[00:17:26] is once you get to RFID,

[00:17:28] once you get to serialization,

[00:17:30] it changes the chargeback discussions that we have.

[00:17:33] And as they're packing their cartons outbound

[00:17:36] and creating those manifests and those ASMs,

[00:17:40] they can now tell us exactly down to the serialized item

[00:17:43] what went in that carton.

[00:17:44] So my deal world, they give us that list.

[00:17:47] And so when I'm receiving,

[00:17:48] I'm going against that checklist.

[00:17:50] I'm saying this carton should have this, this, this,

[00:17:52] this and any EPC or serialized G10 that I don't see.

[00:17:56] We can say, hey, didn't see it.

[00:17:58] And they go, well, we've got it here.

[00:18:00] We saw it here.

[00:18:01] So it means two things, either we missed it

[00:18:04] or there's something happening between their facility

[00:18:07] and ours that we might need to chase down.

[00:18:09] We've already talked about inventory management,

[00:18:12] the ease of cycle counts.

[00:18:13] You can't do that without serialization.

[00:18:16] You can't just go out there and blast an area

[00:18:19] and not duplicate your scans without serialization.

[00:18:23] I was much younger buck back in 2000

[00:18:26] and RFID was coming out and I'm like, oh, it's great.

[00:18:29] You can wave a wand to it,

[00:18:30] but how do you know if you have everything

[00:18:32] or not have everything?

[00:18:33] And it's serialization.

[00:18:34] I mean, that's it.

[00:18:35] It's looking for number ranges between this

[00:18:38] and it's like, okay, I have all the counts

[00:18:40] or I'm missing counts

[00:18:41] and you can stay a little bit longer.

[00:18:43] I mean, there's a lot.

[00:18:44] And you brought up the whole returns and refunds piece

[00:18:48] because we've all seen it.

[00:18:49] Hey, I bought this at your store.

[00:18:50] Did you buy it at my store?

[00:18:52] They're same product,

[00:18:53] but I don't know that you bought it at my store

[00:18:55] and I don't know if it's exactly the same product.

[00:18:57] And when you're dealing with serialization,

[00:19:00] if you're getting a UPC, it's like, well,

[00:19:02] we deal in serialization.

[00:19:04] It's the same G10, but we've serialized it.

[00:19:07] And now you have a more specificity

[00:19:10] into what you really have and what you're getting back.

[00:19:13] And I think it's a better customer service

[00:19:16] all the way around, right?

[00:19:17] It excludes those that are really trying

[00:19:19] to work the system, if we would say.

[00:19:21] Right.

[00:19:22] And as a Dillard shopper,

[00:19:23] you are aware that as part of the checkout process,

[00:19:25] we put a little yellow sticker on your item

[00:19:28] whenever you purchase it.

[00:19:29] That is our, we call it a pop label,

[00:19:30] proof of purchase label.

[00:19:32] Guess what that is?

[00:19:33] That is a unique identifier

[00:19:34] of that sales transaction for that item.

[00:19:36] Guess what a 2D barcode will give me?

[00:19:39] Exactly the same thing.

[00:19:40] A serialized unique transaction.

[00:19:42] So that's huge to me as well.

[00:19:44] But the other thing we haven't talked about is the URL.

[00:19:48] Why is that significant in a QR code?

[00:19:50] You touched on it earlier.

[00:19:51] Everybody got familiar with QR codes during the pandemic.

[00:19:54] You couldn't go to a restaurant

[00:19:55] without having to scan one to see what you could order.

[00:19:58] I think our customers are very familiar with QR codes now.

[00:20:02] And we have product in our stores right now

[00:20:04] with QR codes on them already.

[00:20:05] Some brands come to mind.

[00:20:07] Anything that's collegiate professional athletes

[00:20:10] or athletics, they're branded logoed merchandise

[00:20:14] is going to have a QR code on it

[00:20:15] where you can scan it

[00:20:16] to make sure you bought authentic licensed merchandise.

[00:20:19] All that is is taking you to one of their websites.

[00:20:21] It's got a content page saying,

[00:20:23] yep, this is what it is.

[00:20:24] This is what you bought.

[00:20:25] It should match if it doesn't probably have a problem.

[00:20:28] But we have a vintage handbag vendor

[00:20:30] that has a separate QR code they're putting on there

[00:20:33] and it shows you a picture of the handbag

[00:20:35] that you just purchased.

[00:20:36] It tells you some of the information about that handbag.

[00:20:39] And then Ralph Lauren Polo,

[00:20:41] if you bought one of their shirts lately

[00:20:42] in the collar in the men's shirts,

[00:20:44] they have a tiny sewn-in QR code.

[00:20:47] And all that QR code does when you scan it

[00:20:49] with your phone as a customer

[00:20:50] is take you to a content page on their website

[00:20:54] that says, here's the item you bought.

[00:20:55] Yes, it's authentic.

[00:20:57] So that's the benefit to the customer in my part.

[00:21:00] And we'll continue to see this evolve.

[00:21:02] In the retail apparel space,

[00:21:04] we haven't been concerned so much about FISMA

[00:21:06] and the digital product passport

[00:21:10] and the smart labels and all of that.

[00:21:12] But that day's coming, right?

[00:21:13] We're gonna have to disclose more and more information

[00:21:15] about our products,

[00:21:16] the materials that were made to make them

[00:21:17] where they were sourced from any recall information,

[00:21:20] any hazardous materials.

[00:21:23] The list goes on and on.

[00:21:24] And one word of caution to everybody,

[00:21:27] there's a lot you can put in a QR code,

[00:21:29] but don't put everything in the QR code.

[00:21:31] Use that URL in the QR code

[00:21:34] to take you to a content page

[00:21:36] to then present all that information

[00:21:37] in a useful format.

[00:21:39] That's the beautiful thing about DigitalLink

[00:21:40] because you can absolutely do that

[00:21:42] and tell different stories

[00:21:43] and to the different use cases.

[00:21:44] So whether you use it at point of sale

[00:21:46] or wanna tell the story of that shirt

[00:21:48] from how it ended up to be in your store,

[00:21:50] you have the ability to encode that kind of information.

[00:21:53] The consumers have wishes for more and more information

[00:21:58] no matter what the product is that they're buying.

[00:22:00] And I think as this journey continues,

[00:22:02] all this data is available

[00:22:04] in some form or fashion today.

[00:22:06] But how are we surfacing it to consumers?

[00:22:09] And I think that it sounds just from our conversation

[00:22:11] that that will continue to evolve

[00:22:13] as the technology evolves

[00:22:15] and as the data can marry together with the new technology.

[00:22:19] You said it as good as I can or better.

[00:22:21] You're absolutely right.

[00:22:22] The customers wanna know why

[00:22:23] and it's not just about our customers too.

[00:22:24] What about our sales associates?

[00:22:26] Right now a customer can walk into a store

[00:22:28] and know as much about a product

[00:22:29] or more than our sales associates.

[00:22:31] And that can be embarrassing.

[00:22:32] Why not give our associates the tools

[00:22:35] that while they're waiting around for customers,

[00:22:37] they're maybe scanning the QR code on a product

[00:22:40] and learning more about that.

[00:22:41] So they know the selling points of that product

[00:22:43] and they can answer those questions on the fly

[00:22:45] or they can assist the customer in that regard.

[00:22:48] One other thing I wanted to touch on about the URL

[00:22:51] is there's going to be some conversations

[00:22:54] had between retailers and vendors

[00:22:55] about what you put in that URL.

[00:22:58] I'm probably not gonna get Ralph Lauren

[00:23:00] to put dillards.com in the URL.

[00:23:02] That's probably not gonna fly,

[00:23:03] especially if they're selling to Nordstroms,

[00:23:04] Macy's and everyone else.

[00:23:06] And they definitely don't wanna put each one

[00:23:08] of those specific retailer URLs in there.

[00:23:11] So we're perfectly fine with them putting

[00:23:14] what they're doing in their caller,

[00:23:15] that content page URL in there.

[00:23:18] So that the customer has that experience

[00:23:19] whenever they scan it.

[00:23:21] With RFID, we asked all of our retailers

[00:23:24] to incur some additional cost

[00:23:25] by putting RFID tags in the product.

[00:23:28] We got some pushback and we tried to paint the picture,

[00:23:31] do this at the point of manufacture

[00:23:32] when you put your UPC on the item

[00:23:34] and then leverage that technology

[00:23:36] all the way through the supply chain.

[00:23:38] And before it ever gets to us,

[00:23:39] we've already paid for the cost of the tag

[00:23:41] just through efficiencies and gains there.

[00:23:44] But with the 2D barcode,

[00:23:46] let's take away those additional tags

[00:23:48] that you're putting on the product

[00:23:50] and make them part of your UPC ticketing.

[00:23:53] So now you have one tag

[00:23:55] because additional trim tags are not cheap,

[00:23:58] especially if you do fancy stuff.

[00:23:59] And unfortunately, one of our vendors

[00:24:01] puts their 2D on a Mylar metallic looking tag

[00:24:05] which when laid right on top of our RFID tag

[00:24:08] blocks the signal.

[00:24:09] So another issue altogether,

[00:24:11] but let's give some benefit back to the vendors

[00:24:14] and say, okay, get rid of your extra tags.

[00:24:17] Let's incorporate all of this into that one barcode now.

[00:24:21] How are those conversations going?

[00:24:22] Are they being well received or questionable

[00:24:25] or is there still a lot of now we're gonna do what we do?

[00:24:28] Yes.

[00:24:29] Yeah.

[00:24:30] All of it.

[00:24:31] Right, yeah.

[00:24:31] And you know, they're like,

[00:24:33] look, you told us we gotta do RFID.

[00:24:34] Let us get that working right

[00:24:36] before we come along and do this sunrise 2027 thing.

[00:24:39] But there are some forward thinking companies

[00:24:41] that we're talking to as well.

[00:24:42] They've seen the vision as well.

[00:24:44] They see the benefit and are very much on board.

[00:24:47] So we've got some vendors honestly

[00:24:48] that are still struggling

[00:24:49] to get one D barcodes on product.

[00:24:52] So it's going to be a journey

[00:24:54] and we're gonna deal with each of those vendors

[00:24:56] on a case by case basis

[00:24:57] and help them navigate this and get through that.

[00:24:59] But one thing we don't want is

[00:25:01] we don't want our vendors putting a URL in there

[00:25:04] that when the customer scans it,

[00:25:06] takes them to the product page

[00:25:07] where they can purchase that item now.

[00:25:09] That will potentially end up in our business.

[00:25:12] That's a conflict of interest.

[00:25:13] That's not a partnership you're looking for.

[00:25:16] I can totally see that.

[00:25:18] You just mentioned you still have some partners

[00:25:20] or some vendors rather

[00:25:21] that are still struggling to get UPC,

[00:25:24] a single one D barcode put onto their products.

[00:25:27] It's actually this June of 2024

[00:25:30] will be the 50th anniversary

[00:25:31] of the first scanning of the one D barcode

[00:25:35] or the universal product code.

[00:25:37] And you're in IT, I have an IT background.

[00:25:42] 50 years of a technology being used

[00:25:44] is kind of archaic in IT world.

[00:25:47] Three years, five years.

[00:25:50] I mean, it gets exponentially shorter with technology

[00:25:53] but I'm curious to like your thoughts on that

[00:25:56] with do you think RFID and 2D

[00:25:59] will have the same type of run?

[00:26:01] Do you think it'll be a lot different?

[00:26:02] When do you see the one D barcode going away?

[00:26:05] First of all, don't tell my cobalt programmers

[00:26:08] that there's a lifespan to technology.

[00:26:10] Yes, I'm so glad you brought that up.

[00:26:12] Okay, so for the folks that don't understand

[00:26:15] what cobalt is, it's a programming language

[00:26:17] that was invented a long, long, long time ago.

[00:26:20] A lot of AS 400 mainframe computers from IBM.

[00:26:24] Now Liz is going, this is back when I used to use

[00:26:27] a hairdryer and a comb, Liz.

[00:26:29] But retailers invested a lot into these mainframes

[00:26:33] and they still have them.

[00:26:34] You have websites you're running in Azure and Amazon

[00:26:37] and all those things in their own data centers

[00:26:40] but they still have these core things.

[00:26:42] So it doesn't really go away,

[00:26:43] it's just not out in the front as we say,

[00:26:47] it's just, it's still there.

[00:26:48] So I'm glad you brought that up.

[00:26:49] So please continue.

[00:26:51] In the earlier conversation,

[00:26:53] you mentioned the long legs that the technologies

[00:26:55] we're talking about already have 2D

[00:26:57] has been around, what'd you say, 20 years?

[00:26:59] 30, 1994 it was created.

[00:27:02] And then we've got RFID

[00:27:03] which has been around since World War II.

[00:27:06] World War II identifying the planes

[00:27:08] since they were coming in.

[00:27:10] And the scanning of the pack of Wrigley's gum

[00:27:13] in that Ohio store 50 years ago,

[00:27:15] that is kind of a milestone

[00:27:16] and my friends over at GS1,

[00:27:18] especially a young lady by the name of Gina Morgan

[00:27:21] has challenged several of us retailers

[00:27:23] to hit this mark to say 50 years later,

[00:27:27] we're gonna ring a cell with a 2D barcode.

[00:27:30] Right, who's gonna be first?

[00:27:32] I think there's some out there that have already done it.

[00:27:34] Yeah, true.

[00:27:35] But that's okay, it's a short list

[00:27:36] and I wanna be part of that list.

[00:27:38] But to answer your question,

[00:27:39] when will the 1D go away?

[00:27:41] Not for a long time.

[00:27:42] I think we're gonna live in this slow transition world

[00:27:45] for a while.

[00:27:46] We're gonna push as fast as we can.

[00:27:48] When's everybody gonna have RFID on their product?

[00:27:50] That's gonna be a while too.

[00:27:52] Can I get some benefit by getting to 2D transition tag sooner?

[00:27:56] Yes, I absolutely can.

[00:27:57] So that's where we're gonna start

[00:27:59] and then hopefully wean them off the 1D eventually.

[00:28:02] Will it go away?

[00:28:03] I think it probably could and should eventually,

[00:28:06] at least in this use case.

[00:28:07] Not saying there's other use cases out there

[00:28:09] where it might not still be perfect.

[00:28:11] Well, I think you just nailed it, right?

[00:28:12] There's no one single silver bullet to fix everything.

[00:28:15] It's solutions.

[00:28:17] It's what's right for the right application,

[00:28:20] the right spot of your supply chain.

[00:28:22] I mean, we see it today.

[00:28:23] There's some significant use of RFID in certain areas

[00:28:28] where 80% is done by RFID and then in other areas

[00:28:32] it's less than 5% is done by RFID

[00:28:35] because it's just not the right environment

[00:28:36] for the solution for everybody.

[00:28:39] So I think we are running out of time.

[00:28:42] Reid and I ask our guests two questions

[00:28:45] at the end of each of our podcasts.

[00:28:47] So I'm going to ask you the first one,

[00:28:49] professional or personal,

[00:28:52] what is the favorite technology you're using right now?

[00:28:55] I'm not a tech geek,

[00:28:56] which is kind of weird since I'm in IT, right?

[00:28:59] I'm not out there chasing the latest trends and everything.

[00:29:02] My kids still have to show me features on my phone.

[00:29:05] So, you know, I've played around with the chat GPT

[00:29:08] and all of that.

[00:29:08] I think that's really cool technology.

[00:29:10] I think it's also really scary technology,

[00:29:12] especially in an election year.

[00:29:14] I think there's a lot of abuse that could occur

[00:29:17] if we don't find a way to tell this,

[00:29:19] but there's a lot of good uses that need to come out of this.

[00:29:23] And hopefully we can get the parameters around it

[00:29:25] to help control that.

[00:29:26] Call centers are the one that come to mind most of all,

[00:29:29] that none of us wants to sit on hold for hours

[00:29:32] as we make a call in to get some service.

[00:29:34] Ideally, we wouldn't have to call it all.

[00:29:36] We could be able to handle it from our phones or whatever.

[00:29:39] But why not take advantage of some of the technology

[00:29:42] to help a customer get to resolution

[00:29:44] without ever having to speak to another human?

[00:29:47] We can do this self-service through some smart responses

[00:29:50] that we can run through for our customers.

[00:29:52] I know that's probably the popular answer is generative AI,

[00:29:55] but right now that's the hot topic and what everybody's...

[00:29:58] Now unfortunately everybody's calling everything AI.

[00:30:01] Some of them just run in the street.

[00:30:02] Data analytics, I mean it's just the street drill.

[00:30:04] It's just running smart queries,

[00:30:06] but where it truly is machine learning in there

[00:30:08] and you're developing the model as you go along.

[00:30:11] And boy, we have so much information available to us

[00:30:14] that we've never had before.

[00:30:16] Let's take advantage of it.

[00:30:17] It's surreal for me,

[00:30:18] because I remember dealing with Banyan Vines,

[00:30:21] Apple Talk, Token Ring before internet

[00:30:23] and I'm like, here we are, we're on another thing

[00:30:25] and you just threw it in my face

[00:30:27] that 50 years ago, Wrigley's in Ohio

[00:30:30] and one scan first time,

[00:30:31] but now here we are launching new technologies again.

[00:30:35] It's a fun time to be alive.

[00:30:36] The other question we have that we ask everybody is

[00:30:39] what's something that has just completely blown your mind

[00:30:42] and changed the way you look at the world?

[00:30:44] Like it was a moment

[00:30:45] and it just created that wrinkle in the brain

[00:30:47] and it's never gonna be even,

[00:30:49] it just left a mark on you.

[00:30:50] What's something that's blown your mind?

[00:30:52] I think and it hasn't occurred recently.

[00:30:54] Hopefully I can go back in time just a little bit,

[00:30:57] but it was when we put one of these in everybody's hands.

[00:31:00] We now have more computing power in our phones

[00:31:04] than we ever had access to years and years ago.

[00:31:06] You could have a room-sized mainframe

[00:31:09] that didn't have the computing power

[00:31:10] that some of these phones have.

[00:31:12] And if you look at all of the technology

[00:31:14] we have displaced because of these devices,

[00:31:17] I don't have to wear a watch now.

[00:31:19] I've got my clock here.

[00:31:21] I don't have to carry a pager.

[00:31:22] I don't have to read the newspaper.

[00:31:25] I don't have to carry a camera.

[00:31:26] I mean, the list goes on and on.

[00:31:28] Anything that we had to have before it's in there,

[00:31:30] I can start my vehicle with this thing now.

[00:31:33] It's just amazing.

[00:31:33] To me, this is the biggest revolutionary change

[00:31:37] technology-wise in my lifetime.

[00:31:39] Yeah, it's way beyond the Star Trek flip phone

[00:31:42] of beam me up, Scotty.

[00:31:44] We do need to work on that beam me up part.

[00:31:46] Yeah.

[00:31:47] Teleportation would be really cool.

[00:31:49] That would really help with the travel.

[00:31:51] Automated vehicles.

[00:31:52] I think that's another one that is right there

[00:31:54] on the cusp.

[00:31:55] I know there's been a lot of forays into this.

[00:31:57] There's been a lot of success.

[00:31:58] There's been a few setbacks.

[00:32:00] But as we look at trucker shortages and stuff like that,

[00:32:03] I think it could really help in the supply chain space.

[00:32:06] Plus, if you think about it,

[00:32:07] the cause of most accidents are humans.

[00:32:10] You guys are probably familiar with Amazon's Kiva robots.

[00:32:13] Do you ever watch the warehouse of those things run around?

[00:32:15] They're zipping at each other.

[00:32:16] They come to stops.

[00:32:17] They never run into each other.

[00:32:19] Why can't our roads be like that?

[00:32:20] It's very true.

[00:32:21] When you think about the airline industry,

[00:32:23] most planes are run by the computer most.

[00:32:26] The pilots are there to make sure

[00:32:27] that everything is running correctly

[00:32:28] and they've been moving that way for a long time too.

[00:32:31] This was super enlightening, Chuck.

[00:32:33] Can't thank you enough for spending the time

[00:32:35] with us here today.

[00:32:36] And we really do wish you the best of luck

[00:32:38] with your continued rollout of 2D and QR codes

[00:32:42] within the Dillard's environment.

[00:32:43] Thanks for spending the time with us today.

[00:32:45] Thank you for your time.

[00:32:46] And I hope next time you're in a Dillard store

[00:32:48] and you go to check out,

[00:32:48] it'll be with the 2D barcode.

[00:32:52] Thank you for joining us on this episode

[00:32:54] of the Next Level Supply Chain with GS1 US.

[00:32:57] If you enjoyed today's show,

[00:32:58] please subscribe to our feed

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[00:33:05] Thanks again and we'll see you next time.