1 00:00:00,080 --> 00:00:02,080 Speaker 1: Robert and I are going to sit down for virtual 2 00:00:02,160 --> 00:00:05,720 Speaker 1: chats with people using technologies developed by IBM to deal 3 00:00:05,760 --> 00:00:08,840 Speaker 1: with the unique challenges the world is facing today. In 4 00:00:08,880 --> 00:00:12,159 Speaker 1: this episode, we'll be focusing on how consumers, retailers, and 5 00:00:12,200 --> 00:00:15,480 Speaker 1: supply chains adapt in the midst of a pandemic. And 6 00:00:15,520 --> 00:00:18,160 Speaker 1: for this subject, we're going to be in conversation with 7 00:00:18,239 --> 00:00:22,160 Speaker 1: Luke Nazzi, the IBM Global Managing Director for Consumer Industries, 8 00:00:22,200 --> 00:00:25,120 Speaker 1: and Carl Holler, who is a partner at the Consumer 9 00:00:25,200 --> 00:00:28,240 Speaker 1: Center of Competency at IBM. If you'd like to hear 10 00:00:28,240 --> 00:00:31,520 Speaker 1: more episodes of Smart Talks, the tech Stuff podcast has 11 00:00:31,560 --> 00:00:34,479 Speaker 1: already released the first four episodes of the series and 12 00:00:34,560 --> 00:00:36,879 Speaker 1: its feed. You can find them on the I Heart 13 00:00:37,000 --> 00:00:39,319 Speaker 1: Radio app or wherever you get your podcast. Just look 14 00:00:39,400 --> 00:00:41,960 Speaker 1: up tech Stuff and click on the episodes labeled smart 15 00:00:42,000 --> 00:00:45,440 Speaker 1: Talks and stay tuned for upcoming Smart Talks episodes. Here 16 00:00:45,440 --> 00:00:47,479 Speaker 1: on Stuff to Blow your Mind, which will be published 17 00:00:47,479 --> 00:00:49,880 Speaker 1: in our feed in the coming weeks. And now straight 18 00:00:49,880 --> 00:00:54,959 Speaker 1: onto our conversation with Luke and Car. All Right, well, 19 00:00:55,000 --> 00:00:56,880 Speaker 1: I guess probably the best place to start off would 20 00:00:56,920 --> 00:00:59,920 Speaker 1: be to have you each introduce yourself, so Luke and 21 00:01:00,080 --> 00:01:02,760 Speaker 1: Carl can you each introduce yourself and just talk a 22 00:01:02,800 --> 00:01:05,840 Speaker 1: little bit about your background. Yeah, Hi, I'm looking as 23 00:01:06,080 --> 00:01:09,840 Speaker 1: I'm the Global Managing Director for Consumer Industries for IBM. 24 00:01:10,560 --> 00:01:16,360 Speaker 1: Consumer industries are retail, consumer products and the agribusiness and 25 00:01:16,480 --> 00:01:20,560 Speaker 1: I have the pleasure of leading that for IBM globally 26 00:01:20,680 --> 00:01:23,440 Speaker 1: across all of the things that IBM does, and that's 27 00:01:23,440 --> 00:01:27,080 Speaker 1: everything from our research, through our technology and our services 28 00:01:27,120 --> 00:01:30,640 Speaker 1: and our industry platforms. And I'm Carl Haller. I'm part 29 00:01:30,680 --> 00:01:36,280 Speaker 1: of Luke's team and lead our Consumer Industry Center of Competency, 30 00:01:36,920 --> 00:01:41,080 Speaker 1: which is part of the IBM Services business unit, and 31 00:01:41,200 --> 00:01:44,839 Speaker 1: we work me and my team, we work with clients 32 00:01:44,880 --> 00:01:49,160 Speaker 1: around the world on um some of the more challenging 33 00:01:49,280 --> 00:01:55,360 Speaker 1: issues that they're facing that require deep industry skills and expertise. Well, 34 00:01:55,400 --> 00:01:58,280 Speaker 1: we really appreciate you joining us today. So one of 35 00:01:58,320 --> 00:01:59,920 Speaker 1: the main things that we were going to focus on 36 00:02:00,000 --> 00:02:03,520 Speaker 1: today was supply chains and how supply chains are adapting 37 00:02:04,120 --> 00:02:08,280 Speaker 1: during a pandemic. And so to start off, I think 38 00:02:08,320 --> 00:02:11,480 Speaker 1: we should think about what supply chains are. They They're 39 00:02:11,480 --> 00:02:13,160 Speaker 1: one of the many features of our world that I 40 00:02:13,160 --> 00:02:16,600 Speaker 1: think can remain mostly invisible to us until they break down, 41 00:02:16,639 --> 00:02:19,320 Speaker 1: you know, it's only by your failure or by their 42 00:02:19,360 --> 00:02:22,320 Speaker 1: failure that we suddenly sort of noticed them. Can you 43 00:02:22,360 --> 00:02:26,120 Speaker 1: provide a little background on how like normal shopping behavior 44 00:02:26,160 --> 00:02:28,520 Speaker 1: like buying a frozen pizza or buying a pair of 45 00:02:28,600 --> 00:02:32,280 Speaker 1: genes relies on supply chains. So so, first of all, 46 00:02:32,320 --> 00:02:35,880 Speaker 1: in terms of the fundamental to supply chains, um, when 47 00:02:35,919 --> 00:02:40,280 Speaker 1: you when you buy something at a store, it's there 48 00:02:40,360 --> 00:02:44,959 Speaker 1: because it's been distributed to the store. That means it's 49 00:02:45,040 --> 00:02:47,960 Speaker 1: traveled from somewhere and it's got to where it needs 50 00:02:48,000 --> 00:02:52,000 Speaker 1: to be. But behind that, it's been made somewhere. That 51 00:02:52,000 --> 00:02:54,320 Speaker 1: means that there's been a factory where it is being 52 00:02:54,360 --> 00:02:57,160 Speaker 1: made and to be able to make it. And let's 53 00:02:57,160 --> 00:02:59,280 Speaker 1: take that pizza example, in the ingredients that have gone 54 00:02:59,320 --> 00:03:02,120 Speaker 1: into that pizza have got to have been sourced. And 55 00:03:02,200 --> 00:03:04,160 Speaker 1: so that's what we start to get into the kind 56 00:03:04,160 --> 00:03:06,440 Speaker 1: of the fundamentals of the supply chain, because that means 57 00:03:07,320 --> 00:03:11,080 Speaker 1: the bits for the dough, the tomato based, the herbs, 58 00:03:11,400 --> 00:03:13,920 Speaker 1: the cheese, the toppings, they all need to come together 59 00:03:14,080 --> 00:03:17,320 Speaker 1: from a range of suppliers, and those suppliers can be 60 00:03:17,560 --> 00:03:21,359 Speaker 1: you know, very broadly distributed, and so you're getting more 61 00:03:21,400 --> 00:03:26,200 Speaker 1: into the unpacking of that product, and then going further back, well, 62 00:03:26,320 --> 00:03:30,519 Speaker 1: actually all of those things need to be either produced 63 00:03:30,960 --> 00:03:33,480 Speaker 1: or grown. If they're natural, they're grown, but if they 64 00:03:33,480 --> 00:03:36,200 Speaker 1: are you know, like artificial flavorings, and they have to 65 00:03:36,200 --> 00:03:39,400 Speaker 1: be manufactured. And so that simple thing of buying a 66 00:03:39,440 --> 00:03:42,560 Speaker 1: pizza and getting a pizza has to go through all 67 00:03:42,760 --> 00:03:48,160 Speaker 1: of those stages of the retail, the distribution, and the logistics, 68 00:03:48,560 --> 00:03:51,320 Speaker 1: the actual manufacturing, all the way through to the sourcing 69 00:03:51,360 --> 00:03:54,360 Speaker 1: of materials. And of course if you then take something else, 70 00:03:54,400 --> 00:03:57,640 Speaker 1: like a pair of genes, um, it's the same concept, 71 00:03:57,680 --> 00:04:00,360 Speaker 1: but of course all of the processes that make prepare 72 00:04:00,360 --> 00:04:02,200 Speaker 1: of genes, and so you've got to get them to 73 00:04:02,280 --> 00:04:05,360 Speaker 1: the store. They've got to be traveled. Often they're traveling 74 00:04:05,360 --> 00:04:09,360 Speaker 1: from very far away because they're made in the lowest, 75 00:04:09,720 --> 00:04:13,040 Speaker 1: most effective cost manufacturing typically UM. And then when you 76 00:04:13,040 --> 00:04:15,960 Speaker 1: think about everything that goes into a pair of genes, well, 77 00:04:16,480 --> 00:04:19,159 Speaker 1: there's all the cotton, but there's all of the dying 78 00:04:19,200 --> 00:04:21,360 Speaker 1: that goes into it, and that's a complex process in itself, 79 00:04:21,400 --> 00:04:23,080 Speaker 1: and you've got to take care of that in a 80 00:04:23,120 --> 00:04:26,080 Speaker 1: in an effective way. UM. And of course then that 81 00:04:26,200 --> 00:04:28,360 Speaker 1: goes back to the source materials. That's what we mean 82 00:04:28,520 --> 00:04:32,039 Speaker 1: by a supply chain. But I'll let Carl explain a 83 00:04:32,040 --> 00:04:35,720 Speaker 1: little bit about the complexities that are in supply chains 84 00:04:36,400 --> 00:04:39,640 Speaker 1: in the retail world. Yeah, thanks, Luke. You know the 85 00:04:40,040 --> 00:04:43,000 Speaker 1: thing that I think most people I would agree with 86 00:04:43,040 --> 00:04:45,960 Speaker 1: you probably understand that, you know, the things that they 87 00:04:46,080 --> 00:04:51,400 Speaker 1: buy are made by someone and grown somewhere in concept, 88 00:04:51,480 --> 00:04:55,680 Speaker 1: but they don't always understand how complex the supply chains 89 00:04:55,720 --> 00:04:59,839 Speaker 1: have gotten. And whether we're talking about a food supply chain, 90 00:05:00,520 --> 00:05:04,279 Speaker 1: or we're talking about a fashion or clothing supply chain 91 00:05:04,400 --> 00:05:08,440 Speaker 1: or a package good supply chain, there are often upwards 92 00:05:08,440 --> 00:05:12,280 Speaker 1: of a dozen different parties, maybe even more, who are 93 00:05:12,360 --> 00:05:16,520 Speaker 1: involved in the work that happens to go from raw 94 00:05:16,600 --> 00:05:21,440 Speaker 1: materials most of which many of which come from a farm, 95 00:05:21,560 --> 00:05:29,480 Speaker 1: UM through the various stages of processing UM, manufacturing, UM, distributing, 96 00:05:29,560 --> 00:05:34,400 Speaker 1: selling to get goods into you know, a refrigerator or 97 00:05:34,480 --> 00:05:39,159 Speaker 1: a pantry or addresser drawer UM and and these these 98 00:05:39,200 --> 00:05:46,360 Speaker 1: different companies tend to involve multiple geographies. Sometimes goods go 99 00:05:46,520 --> 00:05:50,720 Speaker 1: back and forth around the world once or twice UM 100 00:05:50,760 --> 00:05:56,000 Speaker 1: as they get from raw materials into finish goods UM 101 00:05:56,040 --> 00:05:59,600 Speaker 1: and and that's usually done in order to get goods 102 00:05:59,640 --> 00:06:06,520 Speaker 1: to consumers in the most efficient and lowest cost manner possible. Um. 103 00:06:06,800 --> 00:06:11,320 Speaker 1: The thing that the supply chain relies on today is 104 00:06:11,360 --> 00:06:15,599 Speaker 1: it relies on a couple of basic assumptions um. One 105 00:06:15,720 --> 00:06:21,000 Speaker 1: that goods and capital flow freely across borders um. And 106 00:06:21,160 --> 00:06:27,719 Speaker 1: second that most consumers are willing to make the trade 107 00:06:27,720 --> 00:06:33,720 Speaker 1: off of really knowing and understanding how, where, and by 108 00:06:33,760 --> 00:06:38,160 Speaker 1: whom goods are made in exchange for getting the goods 109 00:06:38,200 --> 00:06:41,640 Speaker 1: whenever they want, wherever they want, and of a low 110 00:06:41,680 --> 00:06:45,359 Speaker 1: and attractive price point. Well, that actually brings to mind 111 00:06:45,680 --> 00:06:47,800 Speaker 1: a question I wanted to ask about some of the 112 00:06:47,800 --> 00:06:51,960 Speaker 1: ways that values guiding the formation of supply chains could 113 00:06:52,000 --> 00:06:55,160 Speaker 1: actually be in conflict. So, uh, the idea of like 114 00:06:55,279 --> 00:07:00,520 Speaker 1: cost and convenience versus energy efficiency or sustainability or just 115 00:07:00,640 --> 00:07:03,320 Speaker 1: in time philosophy, and if you can explain what that 116 00:07:03,440 --> 00:07:08,480 Speaker 1: is versus like a supply chain being robust against interruptions, 117 00:07:08,560 --> 00:07:10,559 Speaker 1: could you talk about that a little bit? Yeah, sure, 118 00:07:10,720 --> 00:07:13,920 Speaker 1: So there's quite a few parts to that. Joe's are 119 00:07:13,960 --> 00:07:17,160 Speaker 1: trying to unpack them in various pieces. So so, so 120 00:07:17,200 --> 00:07:20,440 Speaker 1: the first thing is that you know, if we if 121 00:07:20,440 --> 00:07:23,560 Speaker 1: we cast our minds back over the last twenty years 122 00:07:23,920 --> 00:07:28,080 Speaker 1: in the consumer industries, you know, particularly around food and 123 00:07:28,120 --> 00:07:33,080 Speaker 1: you know fashion, we've kind of accelerated through an environment 124 00:07:33,080 --> 00:07:36,200 Speaker 1: where people can kind of get pretty much whatever they want, 125 00:07:36,920 --> 00:07:40,600 Speaker 1: wherever they want, any time of the year, and so 126 00:07:40,720 --> 00:07:43,440 Speaker 1: you can get fruit all the year around, and you 127 00:07:43,440 --> 00:07:45,920 Speaker 1: can get your berries all around. What's what's occurring around that, 128 00:07:46,000 --> 00:07:48,160 Speaker 1: of course, is that they're coming from many different places 129 00:07:48,200 --> 00:07:50,200 Speaker 1: to be able to get those berries or the year round. 130 00:07:50,720 --> 00:07:54,840 Speaker 1: And we've, through the digitization of commerce, learned to expect 131 00:07:54,880 --> 00:07:57,320 Speaker 1: that if I want something that is shown on my 132 00:07:57,400 --> 00:07:59,240 Speaker 1: tablet that I can search on, that I can get 133 00:07:59,280 --> 00:08:02,760 Speaker 1: it delivered to my home at a you know, a 134 00:08:02,760 --> 00:08:07,200 Speaker 1: reasonable time, and so you know, the what's undergone the 135 00:08:07,200 --> 00:08:10,200 Speaker 1: supply chains, of course is a is a is a 136 00:08:10,320 --> 00:08:15,800 Speaker 1: drive to efficiency and cost reduction and a value delivery, 137 00:08:15,840 --> 00:08:19,400 Speaker 1: and so you know, we as consumers have been honestly said, 138 00:08:19,400 --> 00:08:22,200 Speaker 1: a little bit selfish in terms of expecting anything any 139 00:08:22,240 --> 00:08:25,160 Speaker 1: time anywhere in the world at the lowest kind of 140 00:08:25,200 --> 00:08:31,600 Speaker 1: price point and without really having due consideration of the 141 00:08:31,640 --> 00:08:34,640 Speaker 1: consequences of what it's taking to get that piece of 142 00:08:34,679 --> 00:08:38,880 Speaker 1: food into the supermarket or that garment you know, into 143 00:08:38,920 --> 00:08:41,480 Speaker 1: the store that I'm looking to buy. From all on online. 144 00:08:41,960 --> 00:08:47,320 Speaker 1: Now what is interesting is that UM and so by 145 00:08:47,320 --> 00:08:49,720 Speaker 1: the way, that's called convenience you know, it's all about 146 00:08:49,760 --> 00:08:53,600 Speaker 1: convenience retailing. UH, and we we we've had the decades 147 00:08:53,679 --> 00:08:56,640 Speaker 1: of convenience retailing. What's interesting is that at the beginning 148 00:08:56,679 --> 00:09:00,880 Speaker 1: of this year, Carl and members of my team, working 149 00:09:00,960 --> 00:09:06,120 Speaker 1: with the National Retail Federation and our IBM Institute of 150 00:09:06,120 --> 00:09:10,360 Speaker 1: Business Value, did a piece of research with over nineteen 151 00:09:10,720 --> 00:09:13,719 Speaker 1: consumers in I think it was twenty eight countries. Ever 152 00:09:13,720 --> 00:09:16,960 Speaker 1: I remember, of course all demographics and we try to 153 00:09:17,040 --> 00:09:21,960 Speaker 1: understand what was occurring in buyer behaviors and what the 154 00:09:22,240 --> 00:09:25,280 Speaker 1: study showed, and it's available you can download it is 155 00:09:25,360 --> 00:09:28,960 Speaker 1: that there are kind of three major categories, and the 156 00:09:29,000 --> 00:09:32,880 Speaker 1: convenience category is still the biggest category. Of the respondents 157 00:09:32,920 --> 00:09:37,559 Speaker 1: were convenience buyers looking for value, looking for cost effectiveness, 158 00:09:37,559 --> 00:09:39,960 Speaker 1: looking for that fulfillment wherever they needed at the lowest 159 00:09:39,960 --> 00:09:44,640 Speaker 1: price point. But for almost the same number, we're in 160 00:09:44,640 --> 00:09:47,920 Speaker 1: a category that we called purpose driven consumers. These are 161 00:09:48,400 --> 00:09:52,640 Speaker 1: consumers who care about where things have come from, the 162 00:09:52,760 --> 00:09:56,760 Speaker 1: journey that they've been on, how they've been made, what 163 00:09:56,960 --> 00:10:00,600 Speaker 1: kind of energy was used in them, what's the carbon footprint, 164 00:10:01,240 --> 00:10:06,880 Speaker 1: whether they are sustainable in nature, and what we're seeing 165 00:10:07,080 --> 00:10:11,440 Speaker 1: is this rise of the purpose driven consumer. There are 166 00:10:11,480 --> 00:10:14,000 Speaker 1: a couple of other categories. But in the other categories 167 00:10:14,000 --> 00:10:16,120 Speaker 1: are you know, those that follow the kind of the 168 00:10:16,200 --> 00:10:19,200 Speaker 1: brand and the higher segments and they kind of are 169 00:10:19,360 --> 00:10:24,360 Speaker 1: more aligned to the that pure brand brand value. But 170 00:10:24,840 --> 00:10:28,240 Speaker 1: I believe in twenty twenties we are really at the 171 00:10:28,360 --> 00:10:31,640 Speaker 1: point in time when we're in a decade where in 172 00:10:31,760 --> 00:10:35,520 Speaker 1: the main people are starting to care much more about 173 00:10:35,520 --> 00:10:37,559 Speaker 1: where things have come from and how are they made 174 00:10:38,200 --> 00:10:43,520 Speaker 1: and what are some of the implications to the planet 175 00:10:43,600 --> 00:10:48,280 Speaker 1: and society around that sourcing. We're becoming more responsible in 176 00:10:48,360 --> 00:10:54,080 Speaker 1: our consumption. So in terms of that rise of the 177 00:10:54,080 --> 00:10:58,240 Speaker 1: purpose driven consumer, what we're now seeing is that in 178 00:10:58,280 --> 00:11:00,559 Speaker 1: the respondence that we surveyed about and out of ten 179 00:11:00,600 --> 00:11:05,240 Speaker 1: are prepared to make choices and decisions that are reflect 180 00:11:05,320 --> 00:11:09,360 Speaker 1: their drive for whatever their purposes, sustainability, lower use of plastic, 181 00:11:09,640 --> 00:11:14,640 Speaker 1: evidence of re use in their purchasing, and even more 182 00:11:14,679 --> 00:11:18,000 Speaker 1: fascinating is that we're seeing that they're prepared to pay 183 00:11:18,200 --> 00:11:21,719 Speaker 1: more for those companies that are able to demonstrate and 184 00:11:21,760 --> 00:11:26,640 Speaker 1: improve that their products have been made in a more 185 00:11:26,679 --> 00:11:30,600 Speaker 1: sustainable or environmentally friendly way. The survey actually showed that 186 00:11:31,040 --> 00:11:32,920 Speaker 1: people are prepared to be up to a third more 187 00:11:33,520 --> 00:11:37,360 Speaker 1: for that. What's also interesting is this, this trend of 188 00:11:37,360 --> 00:11:42,760 Speaker 1: that group is across age profiles, So it's not just 189 00:11:42,840 --> 00:11:45,640 Speaker 1: a certain age profile, it's you know, all age profiles 190 00:11:45,720 --> 00:11:53,080 Speaker 1: are showing that tendency. And it's not just a highly 191 00:11:53,080 --> 00:11:57,320 Speaker 1: developed Western economy type of perspective. It's actually per permeates 192 00:11:57,360 --> 00:12:03,320 Speaker 1: across a globe context and different stages of economic development. 193 00:12:03,360 --> 00:12:06,400 Speaker 1: So so we believe that we are absolutely in the 194 00:12:06,520 --> 00:12:11,160 Speaker 1: era of um what was becoming purpose different consumption. Now, 195 00:12:11,559 --> 00:12:14,600 Speaker 1: the third part of your question is, you know, the 196 00:12:14,679 --> 00:12:17,160 Speaker 1: kind of the dilemma that we find ourselves in right now. 197 00:12:17,679 --> 00:12:25,080 Speaker 1: And obviously, with the global COVID nineteen pandemic, there was 198 00:12:25,440 --> 00:12:31,240 Speaker 1: an immediate rush to people to kind of stock up 199 00:12:31,360 --> 00:12:35,920 Speaker 1: and get basic goods. It was food, it was grocery, 200 00:12:35,960 --> 00:12:39,320 Speaker 1: it was sanitary products, it was kitchen toweling, it was 201 00:12:39,400 --> 00:12:43,240 Speaker 1: bathroom to um toweling, et cetera massive push for that. 202 00:12:43,760 --> 00:12:46,720 Speaker 1: And and actually if you kind of look at them, 203 00:12:47,240 --> 00:12:49,880 Speaker 1: the results and they're kind of they're publicly available on 204 00:12:49,960 --> 00:12:53,360 Speaker 1: the stock market market and other reports that food and 205 00:12:53,480 --> 00:12:58,080 Speaker 1: grocery and kind of basic sanitary health and wellness type 206 00:12:58,200 --> 00:13:01,920 Speaker 1: category that is continuing have significant demand at the moment 207 00:13:02,040 --> 00:13:07,040 Speaker 1: right now, albeit that the other categories of what we 208 00:13:07,080 --> 00:13:11,200 Speaker 1: consider in retail have clearly experienced a slowing in this 209 00:13:11,360 --> 00:13:15,760 Speaker 1: environment because of the fact that they can get to 210 00:13:15,840 --> 00:13:18,199 Speaker 1: stores and there's only a certain amount of the business 211 00:13:18,240 --> 00:13:21,600 Speaker 1: that's online. And so what is going to be interesting, 212 00:13:21,600 --> 00:13:23,920 Speaker 1: and we can definitely unpack this a bit further, is 213 00:13:24,520 --> 00:13:27,920 Speaker 1: what is going to happen. What are the implications of 214 00:13:28,000 --> 00:13:32,240 Speaker 1: this pandemic continuing, and how it's going to change or 215 00:13:32,280 --> 00:13:35,480 Speaker 1: alter different parts of what we see in the supply chain, 216 00:13:36,080 --> 00:13:38,160 Speaker 1: and whether these things that we saw in terms of 217 00:13:38,200 --> 00:13:42,160 Speaker 1: this convenience versus purpose, how how is that going to 218 00:13:42,720 --> 00:13:45,679 Speaker 1: play out over time. One of the impacts that we 219 00:13:45,800 --> 00:13:53,720 Speaker 1: see from COVID nineteen is that place and people are 220 00:13:53,800 --> 00:13:57,280 Speaker 1: both increasing in importance um there of all, as Luke 221 00:13:57,400 --> 00:14:01,040 Speaker 1: was saying that that to our purpose driven are thinking 222 00:14:01,040 --> 00:14:04,959 Speaker 1: about broader issues, and some are thinking about sustainability, and 223 00:14:05,000 --> 00:14:08,840 Speaker 1: they're thinking about their own personal values. What we're seeing 224 00:14:08,920 --> 00:14:15,120 Speaker 1: now is that as safety and personal personal safety family 225 00:14:15,160 --> 00:14:21,640 Speaker 1: health becomes paramount, more people are concerned about how things 226 00:14:21,680 --> 00:14:25,400 Speaker 1: were made, where they made, and who's touched them along 227 00:14:25,400 --> 00:14:28,360 Speaker 1: the way than they were, you know, just just eight 228 00:14:28,360 --> 00:14:32,480 Speaker 1: weeks ago. Um. So, so that's becoming something that is paramount, 229 00:14:33,040 --> 00:14:36,800 Speaker 1: perhaps even for some of those people who were otherwise 230 00:14:36,880 --> 00:14:40,440 Speaker 1: predisposed towards price and convenience. Well, that's interesting that it 231 00:14:40,440 --> 00:14:44,600 Speaker 1: makes me wonder about um unintended positive effect of even 232 00:14:44,680 --> 00:14:47,520 Speaker 1: irrational concerns, Like I know that there were people who 233 00:14:47,520 --> 00:14:51,200 Speaker 1: were concerned, um in the early days of the pandemic 234 00:14:51,200 --> 00:14:54,360 Speaker 1: about products coming from China and like the idea that 235 00:14:54,400 --> 00:14:57,080 Speaker 1: they could get infected by the virus from that, And now, 236 00:14:57,160 --> 00:15:00,080 Speaker 1: of course, like that that's not a real concern, you know, 237 00:15:00,640 --> 00:15:02,840 Speaker 1: the virus and by the time people were concerned about this, 238 00:15:02,880 --> 00:15:05,240 Speaker 1: it was all over the world anyway, and the virus 239 00:15:05,280 --> 00:15:08,360 Speaker 1: wouldn't survive the shipping time. So it's like a totally 240 00:15:08,400 --> 00:15:14,320 Speaker 1: irrational concern, but could lead to people just generally being 241 00:15:14,400 --> 00:15:16,880 Speaker 1: more aware of like, oh, wait a minute, the products 242 00:15:16,880 --> 00:15:19,520 Speaker 1: I buy do have to come from a place and 243 00:15:19,600 --> 00:15:23,040 Speaker 1: there's something behind them, and normally like uh, I mean 244 00:15:23,080 --> 00:15:25,000 Speaker 1: I I can even admit this in myself. Most of 245 00:15:25,000 --> 00:15:27,080 Speaker 1: the time, I just don't even think about that. You 246 00:15:27,200 --> 00:15:29,800 Speaker 1: just buy it at the store like that, that whole 247 00:15:29,920 --> 00:15:33,640 Speaker 1: history is completely invisible. I think you're exactly right, whether 248 00:15:33,720 --> 00:15:37,000 Speaker 1: it's something we're buying in a in a in a 249 00:15:37,040 --> 00:15:39,920 Speaker 1: mall store, you know, home, something for the home, or 250 00:15:40,000 --> 00:15:44,640 Speaker 1: something for for ourselves, or whether it's groceries you're buying 251 00:15:44,720 --> 00:15:48,800 Speaker 1: and we're just so used to getting, you know, fresh tomatoes, 252 00:15:48,840 --> 00:15:53,040 Speaker 1: fresh fruits and vegetables in the winter, we probably don't 253 00:15:53,080 --> 00:15:57,520 Speaker 1: really think that all of those were grown and transported here. Um, 254 00:15:57,600 --> 00:16:00,320 Speaker 1: And now I would agree with you there is going 255 00:16:00,360 --> 00:16:03,920 Speaker 1: to be a bit more awareness of that across the board. 256 00:16:04,280 --> 00:16:08,800 Speaker 1: I mean, what, of course has occurred with the pandemic 257 00:16:09,160 --> 00:16:12,960 Speaker 1: has been a massive lockdown of people pretty much around 258 00:16:13,120 --> 00:16:15,400 Speaker 1: the entirety of the world, all be at different times, 259 00:16:16,280 --> 00:16:21,880 Speaker 1: and a lockdown of transportation systems, initially people, but also 260 00:16:22,960 --> 00:16:28,960 Speaker 1: harder controls around borders, much less flight transportation, and of 261 00:16:29,000 --> 00:16:32,400 Speaker 1: course every time a plane flies to a country, not 262 00:16:32,520 --> 00:16:35,080 Speaker 1: only is it taking people to but it's also taking 263 00:16:35,120 --> 00:16:38,600 Speaker 1: some kind of produce, typically as as part of the cargo. 264 00:16:39,120 --> 00:16:43,280 Speaker 1: And so one of the consequences of the pandemic is 265 00:16:43,360 --> 00:16:48,840 Speaker 1: that the availability of supply in this globally connected network 266 00:16:48,880 --> 00:16:51,560 Speaker 1: that we have that delivers us anything any time anywhere 267 00:16:52,280 --> 00:16:55,080 Speaker 1: has had to deal with this massive contraction in the 268 00:16:55,200 --> 00:17:00,880 Speaker 1: practicalities of transportation and logistics and are tightening up, and 269 00:17:01,880 --> 00:17:05,199 Speaker 1: that combined with the peaks in demand, and we know 270 00:17:05,320 --> 00:17:07,840 Speaker 1: what kind of demand peaked early on, and we talked, 271 00:17:07,840 --> 00:17:10,320 Speaker 1: we talked about the sanitary products, but also what peaked 272 00:17:10,400 --> 00:17:16,280 Speaker 1: very early on where things like packaged products, tins of soup, 273 00:17:16,320 --> 00:17:19,040 Speaker 1: whether it's Campbell, Super Hinds or whatever your your preference is. 274 00:17:19,520 --> 00:17:24,760 Speaker 1: And what also peaked is things like dried products like pasta. Um. Now, 275 00:17:24,760 --> 00:17:28,520 Speaker 1: I live in London and I live in Europe, and 276 00:17:29,000 --> 00:17:33,639 Speaker 1: most of our dried pastor comes from Italy. Yeah, and 277 00:17:33,680 --> 00:17:36,040 Speaker 1: of course Italy was one of the countries that was 278 00:17:36,600 --> 00:17:39,640 Speaker 1: locked down the hardest and impacted the hardest early on 279 00:17:40,840 --> 00:17:45,440 Speaker 1: in Q one and consequently, and it's still taken a 280 00:17:45,480 --> 00:17:47,240 Speaker 1: little bit of time. You know, it took quite a 281 00:17:47,240 --> 00:17:50,360 Speaker 1: long time for dry light pastor to be readily available 282 00:17:50,359 --> 00:17:52,919 Speaker 1: back on the shelves because there was a disruption in 283 00:17:52,960 --> 00:17:56,879 Speaker 1: that supply chain. Now what what what starts to occur is, 284 00:17:56,920 --> 00:18:01,040 Speaker 1: of course the supply chains are gradually recovering, transportation opens up, 285 00:18:01,080 --> 00:18:03,520 Speaker 1: and so it's kind of less of that shock, but 286 00:18:03,600 --> 00:18:06,560 Speaker 1: The other thing that's occurring is that if you've got 287 00:18:06,840 --> 00:18:11,040 Speaker 1: demand for products, um, you know, and you are in 288 00:18:11,080 --> 00:18:14,040 Speaker 1: the business of providing those products to let's keep with 289 00:18:14,080 --> 00:18:17,480 Speaker 1: food and grocery to your customers, you're going to start 290 00:18:17,480 --> 00:18:21,280 Speaker 1: to work through alternative sources of supply. And so what 291 00:18:21,359 --> 00:18:25,760 Speaker 1: this is also driven is companies starting to look at 292 00:18:25,800 --> 00:18:27,880 Speaker 1: alternative sources of a supply so that they can meet 293 00:18:27,880 --> 00:18:31,800 Speaker 1: their demand. And that in itself is driving because of 294 00:18:31,800 --> 00:18:37,840 Speaker 1: this constraint on transportation, a shift from global demand to 295 00:18:37,960 --> 00:18:40,360 Speaker 1: what I kind of global local, which is I need 296 00:18:40,400 --> 00:18:42,439 Speaker 1: to be more balanced and if I can get it locally, 297 00:18:42,480 --> 00:18:44,639 Speaker 1: it might be more of a preference. Now, at a 298 00:18:44,760 --> 00:18:49,120 Speaker 1: very practical level, you can see that if you are, 299 00:18:49,160 --> 00:18:52,000 Speaker 1: you know, going out and if you're still buying food, 300 00:18:52,080 --> 00:18:55,640 Speaker 1: because what's what's occurring if you're going out to buy 301 00:18:55,640 --> 00:18:58,399 Speaker 1: your food is not everyone is going to a supermarket 302 00:18:58,480 --> 00:19:01,720 Speaker 1: or a big superstore. What they're doing is they're combining 303 00:19:01,800 --> 00:19:05,680 Speaker 1: that shop with a greater propensity to buy from local stores, 304 00:19:05,720 --> 00:19:10,000 Speaker 1: whether it's the local vegetable store or the local butcher's store. 305 00:19:10,440 --> 00:19:13,919 Speaker 1: And so what is occurring is a greater awareness of 306 00:19:13,920 --> 00:19:17,320 Speaker 1: where things are available, and I think that's been driven 307 00:19:17,400 --> 00:19:19,919 Speaker 1: very much by a kind of a needs perspective. But 308 00:19:20,000 --> 00:19:24,159 Speaker 1: I think over time these two forces, this kind of 309 00:19:24,240 --> 00:19:26,880 Speaker 1: longer term trend that we talked about around purpose driven 310 00:19:26,880 --> 00:19:32,320 Speaker 1: consumption and people starting to be more aware of where 311 00:19:32,359 --> 00:19:34,960 Speaker 1: food is coming from or where goods are coming from 312 00:19:35,000 --> 00:19:38,920 Speaker 1: and what the alternatives are, is going to drive a 313 00:19:38,960 --> 00:19:41,920 Speaker 1: different mix in that supply chain that we talked about 314 00:19:42,440 --> 00:19:46,520 Speaker 1: to be more more regional rather than global. And I 315 00:19:46,560 --> 00:19:51,320 Speaker 1: think that might mean over time us UM ultimately driving 316 00:19:51,320 --> 00:19:55,000 Speaker 1: a better a better carbon footprint for the for the 317 00:19:55,040 --> 00:19:59,240 Speaker 1: food that we consume, but also it might also help 318 00:20:00,000 --> 00:20:04,040 Speaker 1: at a better redistributional value in that food value chain 319 00:20:04,480 --> 00:20:08,280 Speaker 1: to allow the smaller corner shop to survive alongside the 320 00:20:08,280 --> 00:20:10,920 Speaker 1: big store formats UM and I think we were seeing 321 00:20:11,359 --> 00:20:14,400 Speaker 1: some of those changes start to ripple through. So Luke 322 00:20:14,480 --> 00:20:20,000 Speaker 1: and Carl, have there been any um major challenges from 323 00:20:20,080 --> 00:20:23,919 Speaker 1: like from food supply and demand or in other industries, 324 00:20:24,000 --> 00:20:27,240 Speaker 1: even things that would be considered non essential like clothing 325 00:20:28,240 --> 00:20:31,480 Speaker 1: that have been presented by the pandemic situation that we 326 00:20:31,520 --> 00:20:33,840 Speaker 1: haven't talked about yet that that you would like to address. 327 00:20:34,560 --> 00:20:38,199 Speaker 1: On one of the things that that we've seen with 328 00:20:38,520 --> 00:20:46,720 Speaker 1: COVID is that the food business runs to parallel but 329 00:20:47,640 --> 00:20:51,639 Speaker 1: largely disconnected supply chains. UM. It all starts all the 330 00:20:51,640 --> 00:20:54,920 Speaker 1: food starts on farms, not always the same farms, but 331 00:20:54,920 --> 00:20:59,160 Speaker 1: but certainly starts on farms. And then from there, part 332 00:20:59,200 --> 00:21:02,200 Speaker 1: of that food runs through the supply chain that ends 333 00:21:02,280 --> 00:21:05,040 Speaker 1: up on a grocery store shelf that we as consumers 334 00:21:05,080 --> 00:21:07,600 Speaker 1: go out and buy and bring home. Part of that 335 00:21:07,680 --> 00:21:11,640 Speaker 1: food runs through a different supply chain that ends up 336 00:21:11,720 --> 00:21:17,520 Speaker 1: in either restaurants or food service. UM. As food service 337 00:21:17,760 --> 00:21:23,040 Speaker 1: and restaurants effectively shut down, you know, near shutdown of 338 00:21:23,080 --> 00:21:26,480 Speaker 1: most of those across most of the US and frankly 339 00:21:26,520 --> 00:21:30,600 Speaker 1: most of the world, that supply chain dried up, and 340 00:21:30,720 --> 00:21:35,920 Speaker 1: we were left in a situation where the consumer supply 341 00:21:36,080 --> 00:21:40,199 Speaker 1: chain had shortages. UM, we had shortages of you know, 342 00:21:40,240 --> 00:21:44,400 Speaker 1: fresh goods and dry goods, shelf stable goods, and yet 343 00:21:45,040 --> 00:21:50,879 Speaker 1: we also had situations where farmers and distributors to the 344 00:21:51,480 --> 00:21:55,000 Speaker 1: UM to the restaurant food service supply chain had an 345 00:21:55,000 --> 00:21:58,480 Speaker 1: overstock of goods. And so that one of the challenges 346 00:21:58,560 --> 00:22:03,359 Speaker 1: has been how can we figure out a way to 347 00:22:03,640 --> 00:22:07,720 Speaker 1: better integrate those supply chains or at least provide better 348 00:22:07,840 --> 00:22:12,640 Speaker 1: visibility of what actual products exist where, so that there 349 00:22:12,640 --> 00:22:16,479 Speaker 1: could potentially be some intermixing. This is this is one 350 00:22:16,560 --> 00:22:22,959 Speaker 1: of those things that the move toward efficiency over the 351 00:22:23,000 --> 00:22:28,400 Speaker 1: past plus years UM at the expense of agility, has 352 00:22:28,480 --> 00:22:31,480 Speaker 1: cost us. And I think what we see going forward 353 00:22:31,600 --> 00:22:36,480 Speaker 1: is a little bit more balanced between efficiency and agility 354 00:22:37,040 --> 00:22:42,760 Speaker 1: such that you can make a brand, um, manufacturer, retailer, 355 00:22:43,040 --> 00:22:45,600 Speaker 1: you know, anyone involved in the in the supply chain 356 00:22:46,840 --> 00:22:51,480 Speaker 1: can make different decisions in a more dynamic manner and 357 00:22:51,640 --> 00:22:54,520 Speaker 1: change things on the fly because because there are hurdles 358 00:22:54,520 --> 00:22:58,320 Speaker 1: I understand in the way of taking say pasta that 359 00:22:58,480 --> 00:23:01,280 Speaker 1: was in the restaurant supply chain and switching it over 360 00:23:01,359 --> 00:23:05,240 Speaker 1: to the consumer individual consumer supply chain. Yes, there there 361 00:23:05,240 --> 00:23:08,399 Speaker 1: are hurdles. There are some hurdles that and it depends 362 00:23:08,440 --> 00:23:10,520 Speaker 1: on the product category. There are some hurdles that are 363 00:23:10,560 --> 00:23:14,800 Speaker 1: regulatory in nature. UM. There are some hurdles in terms 364 00:23:15,000 --> 00:23:19,280 Speaker 1: of the not as much as the manufacturing process, but 365 00:23:19,440 --> 00:23:23,360 Speaker 1: potentially the quantities and the pack sizes. UM. There are 366 00:23:23,400 --> 00:23:27,840 Speaker 1: some hurdles in the packaging and how those goods are 367 00:23:27,880 --> 00:23:31,960 Speaker 1: aggregated together. I know, just you know, my family, we 368 00:23:32,440 --> 00:23:37,480 Speaker 1: uh purchased some fresh seafood from a seafood purveyor that 369 00:23:37,640 --> 00:23:43,280 Speaker 1: normally sells to restaurants, and it was one excellent but 370 00:23:43,440 --> 00:23:45,520 Speaker 1: to the quantity that you have to buy is not 371 00:23:45,640 --> 00:23:48,160 Speaker 1: the normal amount that you might buy in a grocery store, 372 00:23:48,359 --> 00:23:51,160 Speaker 1: so you have to you know, they've had to adjust. Um. 373 00:23:51,200 --> 00:23:54,600 Speaker 1: They're also not used to bringing things directly to consumers. 374 00:23:54,880 --> 00:23:57,640 Speaker 1: You know, they're used to a simpler supply chain. Um, 375 00:23:57,720 --> 00:24:01,120 Speaker 1: they're not used to transacting by credit card with consumers. 376 00:24:01,520 --> 00:24:03,600 Speaker 1: You know. So there are a lot of hurdles in 377 00:24:03,680 --> 00:24:06,439 Speaker 1: the you know, the making and moving of things. There 378 00:24:06,480 --> 00:24:08,720 Speaker 1: are also a lot of hurdles on the transactional side. 379 00:24:10,160 --> 00:24:12,080 Speaker 1: So this is interesting. Yeah, so that kind of thing. 380 00:24:12,119 --> 00:24:15,560 Speaker 1: Would that explain why we could see these strange disconnects 381 00:24:15,560 --> 00:24:18,120 Speaker 1: where say, I don't know that the dairy shelf fit 382 00:24:18,200 --> 00:24:20,879 Speaker 1: your grocery store might be very bare, and yet you 383 00:24:20,960 --> 00:24:24,439 Speaker 1: also see video online of dairy producers having to like 384 00:24:24,560 --> 00:24:29,920 Speaker 1: discard unused things. Yes, exactly exactly, and you can see 385 00:24:30,520 --> 00:24:32,879 Speaker 1: you know, on on one and so so one the 386 00:24:33,040 --> 00:24:35,200 Speaker 1: there are short you know, the shortages. So the dairy 387 00:24:35,200 --> 00:24:38,960 Speaker 1: shelves being empty also then drives up the price to 388 00:24:39,040 --> 00:24:42,960 Speaker 1: the consumer because there is as as Luke was saying 389 00:24:42,960 --> 00:24:45,919 Speaker 1: earlier there's a big mismatch in supply and demand in 390 00:24:46,040 --> 00:24:49,320 Speaker 1: one piece of the supply chain, yet in another piece, 391 00:24:49,840 --> 00:24:52,400 Speaker 1: the mismatch and supply and demand is the opposite. There's 392 00:24:52,440 --> 00:24:56,960 Speaker 1: an excess of demand. So despite the higher price consumers 393 00:24:56,960 --> 00:24:59,880 Speaker 1: are paying for milk, farmers are having to get rid 394 00:24:59,880 --> 00:25:02,000 Speaker 1: of milk because they don't have anywhere to put it 395 00:25:02,040 --> 00:25:05,560 Speaker 1: in any any place, to any place to sell it into, 396 00:25:05,600 --> 00:25:08,800 Speaker 1: because they may not have that same access um to 397 00:25:09,040 --> 00:25:12,760 Speaker 1: the supply chain that that serves consumers directly. Actually, I've 398 00:25:12,800 --> 00:25:17,719 Speaker 1: been very impressed with what some of the major grocers 399 00:25:17,720 --> 00:25:21,480 Speaker 1: in the US have been doing, where they're actually starting 400 00:25:21,480 --> 00:25:25,960 Speaker 1: to now buy up access supply and sometimes incorporated into 401 00:25:26,000 --> 00:25:29,159 Speaker 1: their own business, but other times, frankly, just donate it 402 00:25:29,640 --> 00:25:33,280 Speaker 1: so that it's at least getting to needy consumers to 403 00:25:33,280 --> 00:25:36,400 Speaker 1: to help them, you know, get through get through this crisis. Well, 404 00:25:36,400 --> 00:25:39,560 Speaker 1: that's great. It's also great yet to see some of 405 00:25:39,600 --> 00:25:42,120 Speaker 1: that waste being avoided. Luke, we were talking the other 406 00:25:42,160 --> 00:25:45,560 Speaker 1: day before this call, and you mentioned something about the 407 00:25:46,000 --> 00:25:49,280 Speaker 1: sometimes kind of staggering amount of waste that already happens 408 00:25:49,320 --> 00:25:53,000 Speaker 1: just as like an unfortunate byproduct of the way that 409 00:25:53,080 --> 00:25:57,680 Speaker 1: supply chains uh exist today before the pandemic even yeah, 410 00:25:58,320 --> 00:26:03,480 Speaker 1: absolutely Jones. You know, the the industries that we're talking 411 00:26:03,520 --> 00:26:10,800 Speaker 1: about UM produce a massive amount of goods that don't 412 00:26:10,920 --> 00:26:15,919 Speaker 1: end up being consumed. Either you have food in the 413 00:26:15,920 --> 00:26:19,479 Speaker 1: food supply chain UM that ends up being beyond its 414 00:26:19,520 --> 00:26:23,439 Speaker 1: state and then goes to waste, or you have you know, 415 00:26:23,520 --> 00:26:28,280 Speaker 1: in the fashion industry, a lot of projects that are 416 00:26:28,320 --> 00:26:33,400 Speaker 1: made and even after discounting and multiple campaigns, are still 417 00:26:33,520 --> 00:26:36,959 Speaker 1: left and end up, you know, being effectively wasteful and 418 00:26:37,000 --> 00:26:41,639 Speaker 1: so UM in its entirety. You know, the you know, 419 00:26:41,880 --> 00:26:45,400 Speaker 1: there's about a third of the supply chains that are 420 00:26:45,400 --> 00:26:47,920 Speaker 1: producing stuff that goes to waste. And this isn't because 421 00:26:47,960 --> 00:26:50,800 Speaker 1: there isn't demand. There's demand around the world, it's just 422 00:26:50,880 --> 00:26:53,320 Speaker 1: about where it's ending up at that particular point in time. 423 00:26:53,880 --> 00:26:59,040 Speaker 1: And that that that waste is obviously a massive impact 424 00:26:59,119 --> 00:27:02,760 Speaker 1: for the planet. It's it's the second largest CEO to 425 00:27:03,119 --> 00:27:08,040 Speaker 1: producer as an set of industries, behind the global energy system. 426 00:27:08,080 --> 00:27:13,640 Speaker 1: And so if we can do things that make the 427 00:27:13,720 --> 00:27:18,360 Speaker 1: demand much more connected to the supply in a more 428 00:27:18,440 --> 00:27:22,840 Speaker 1: integrated fashion, then there's this opportunity to not only fulfill 429 00:27:22,920 --> 00:27:26,200 Speaker 1: people and give them important information that they want about 430 00:27:26,280 --> 00:27:28,520 Speaker 1: where things have come from and and how it's going 431 00:27:28,520 --> 00:27:31,160 Speaker 1: to affect them. But there's also an opportunity to get 432 00:27:31,160 --> 00:27:35,359 Speaker 1: a closer integration of that demand signal back into the 433 00:27:35,440 --> 00:27:39,720 Speaker 1: supply side of the world, and therefore we can be 434 00:27:40,040 --> 00:27:44,159 Speaker 1: more responsible in terms of how the supply chains come together. 435 00:27:44,200 --> 00:27:46,440 Speaker 1: And I'm I think it's going to it's going to 436 00:27:46,520 --> 00:27:51,360 Speaker 1: take a decade to manifest itself, but I absolutely believe 437 00:27:51,480 --> 00:27:59,600 Speaker 1: that technologies like blockchain, when connected to digital technologies that 438 00:27:59,720 --> 00:28:03,359 Speaker 1: we interact with that i M the smart apple's on 439 00:28:03,359 --> 00:28:05,920 Speaker 1: your phone as you're buying the food, or the data 440 00:28:05,960 --> 00:28:08,680 Speaker 1: that you get when you're buying online. If you start 441 00:28:08,720 --> 00:28:11,840 Speaker 1: to connect those choices, we can start to drive much 442 00:28:11,880 --> 00:28:16,040 Speaker 1: more holistic understanding of what's going on and ultimately a 443 00:28:16,119 --> 00:28:19,560 Speaker 1: better use and a more sort of sustainable supply change. 444 00:28:19,600 --> 00:28:25,120 Speaker 1: And so right now, companies like car for in Europe, 445 00:28:25,480 --> 00:28:28,399 Speaker 1: if you go and scan the QR code that is 446 00:28:28,440 --> 00:28:31,840 Speaker 1: on the organic chicken, you can see the whole history 447 00:28:31,840 --> 00:28:33,520 Speaker 1: of where that chicken has come from and proved that 448 00:28:33,560 --> 00:28:36,240 Speaker 1: it's organic, and you can see you know where the 449 00:28:36,240 --> 00:28:38,400 Speaker 1: food has come from, et cetera. Now I'm not saying 450 00:28:38,400 --> 00:28:41,200 Speaker 1: that every shop is going to scan every product, but 451 00:28:41,240 --> 00:28:43,960 Speaker 1: it starts to drive in kind of a change and 452 00:28:44,000 --> 00:28:45,960 Speaker 1: an understanding of where things are coming from, and that 453 00:28:46,120 --> 00:28:50,360 Speaker 1: in itself can drive more sustainable usage. So so this 454 00:28:51,320 --> 00:28:54,479 Speaker 1: problem is very substantial, but it's also one of the 455 00:28:54,600 --> 00:28:58,440 Speaker 1: big problems that we see as being addressed in this 456 00:28:58,480 --> 00:29:02,200 Speaker 1: decade because of the availa ability of the technologies that 457 00:29:02,240 --> 00:29:05,840 Speaker 1: we see in front of us. And by the way 458 00:29:06,040 --> 00:29:10,680 Speaker 1: these technologies, um you know, they they are cloud driven 459 00:29:10,960 --> 00:29:15,280 Speaker 1: and they are connecting different parts of the supply chain. 460 00:29:15,360 --> 00:29:19,360 Speaker 1: Business network are also some of the technologies that are 461 00:29:19,800 --> 00:29:24,520 Speaker 1: companies are using to reconfigure their supply chains right now 462 00:29:24,600 --> 00:29:28,000 Speaker 1: because they're saying, okay, I understand who's available in terms 463 00:29:28,040 --> 00:29:31,840 Speaker 1: of what produced in this region and they are applying 464 00:29:31,880 --> 00:29:36,240 Speaker 1: that to get better supply to the demand that they have. UM. 465 00:29:36,280 --> 00:29:39,200 Speaker 1: You know. Similarly, you know, I touched on what AI 466 00:29:39,480 --> 00:29:43,920 Speaker 1: was doing is doing in terms of the inter end processes, 467 00:29:43,920 --> 00:29:46,240 Speaker 1: and it's prevalent across the whole of the value chain. 468 00:29:46,760 --> 00:29:52,640 Speaker 1: But you know that AI is allowing consumer goods manufacturers 469 00:29:53,080 --> 00:29:57,760 Speaker 1: to do optimization of demand and supply in terms of 470 00:29:57,800 --> 00:29:59,720 Speaker 1: they know what they produced and they know where it 471 00:29:59,800 --> 00:30:03,240 Speaker 1: is physically in the supply chain and the distribution network, 472 00:30:03,680 --> 00:30:06,960 Speaker 1: and they can sense at a hyperlocal basis where the 473 00:30:07,040 --> 00:30:09,080 Speaker 1: demand is for those products, and they can drive a 474 00:30:09,120 --> 00:30:12,440 Speaker 1: better matching of that supply to the demand. That means 475 00:30:12,800 --> 00:30:14,800 Speaker 1: that ultimately the things that they produce are sold and 476 00:30:15,120 --> 00:30:17,640 Speaker 1: they make money, But it also means that lessons go 477 00:30:17,680 --> 00:30:21,080 Speaker 1: to waste and and so so these technologies that you 478 00:30:21,120 --> 00:30:23,720 Speaker 1: know I touched on to we're asking about Robert's question 479 00:30:24,480 --> 00:30:29,120 Speaker 1: also have a very important implication in terms of driving 480 00:30:29,120 --> 00:30:32,680 Speaker 1: better sustainability as I touched upon, but also having a 481 00:30:32,720 --> 00:30:36,880 Speaker 1: better optimization of the hyperlocal needs that we're seeing right now, 482 00:30:36,880 --> 00:30:39,240 Speaker 1: and I think we're going to continue to see these 483 00:30:39,240 --> 00:30:44,080 Speaker 1: waves of hyperlocal needs over the next six or twelve months. 484 00:30:44,560 --> 00:30:46,680 Speaker 1: Some of our listeners may have heard about the existential 485 00:30:46,720 --> 00:30:49,360 Speaker 1: need for digital commerce three point oh in order to 486 00:30:49,440 --> 00:30:52,480 Speaker 1: keep the supply chain healthy, not on idearing, but after 487 00:30:52,640 --> 00:30:56,560 Speaker 1: COVID nineteen, can you walk us through what digital commerce 488 00:30:56,600 --> 00:30:59,880 Speaker 1: three point oh? Yeah it really is. I'll take a 489 00:31:00,000 --> 00:31:02,520 Speaker 1: pass at this um because I think I think when 490 00:31:02,560 --> 00:31:06,200 Speaker 1: we talk about you know, digital commerce three point oh 491 00:31:06,640 --> 00:31:09,280 Speaker 1: or retail three point oh, you know, we have to 492 00:31:09,320 --> 00:31:11,960 Speaker 1: get it. What a what a definition is and I think, 493 00:31:12,520 --> 00:31:15,800 Speaker 1: you know, that's really a term that we would use 494 00:31:16,560 --> 00:31:22,360 Speaker 1: within IBM as as an industry flavor of a broader 495 00:31:22,440 --> 00:31:25,960 Speaker 1: umbrella term that we call the cognitive enterprise UM. And 496 00:31:26,080 --> 00:31:35,640 Speaker 1: this is really an enterprise that UM understands, gathers information, UH, 497 00:31:35,720 --> 00:31:40,480 Speaker 1: creates insights, acts on those insights, and learns over time. 498 00:31:40,800 --> 00:31:43,800 Speaker 1: You know, an enterprise that has many more of the 499 00:31:43,840 --> 00:31:47,720 Speaker 1: capabilities that we as humans have, rather than just being 500 00:31:47,880 --> 00:31:51,640 Speaker 1: a great big machine UM. And I think many traditional 501 00:31:51,840 --> 00:31:56,080 Speaker 1: enterprises right now are essentially great big machines, and they've 502 00:31:56,160 --> 00:32:01,120 Speaker 1: been tuned for efficiency UM, just as machines and engines 503 00:32:01,160 --> 00:32:05,920 Speaker 1: are tuned for efficiency. UM. What we're seeing now, UM, 504 00:32:06,040 --> 00:32:09,720 Speaker 1: and I would say this is in It's in digital commerce, 505 00:32:09,920 --> 00:32:13,800 Speaker 1: it's in all commerce, because most commerce has a digital 506 00:32:13,840 --> 00:32:16,960 Speaker 1: element to it UM. And it's really all the way 507 00:32:17,120 --> 00:32:22,480 Speaker 1: upstream from the point of commerce for the consumer up 508 00:32:22,480 --> 00:32:26,840 Speaker 1: to the point of growing or producing. UM. What we're 509 00:32:26,840 --> 00:32:31,560 Speaker 1: seeing is a you know, a greater need to sense 510 00:32:31,600 --> 00:32:37,080 Speaker 1: and respond in real time to better understand the variable 511 00:32:37,760 --> 00:32:43,480 Speaker 1: dynamics in demand and then match both supply to that 512 00:32:43,800 --> 00:32:47,800 Speaker 1: and match frankly all of your operations to those variabilities 513 00:32:47,840 --> 00:32:51,840 Speaker 1: in in UH in demand. This has existed for the 514 00:32:51,920 --> 00:32:55,800 Speaker 1: last five or ten years. We've known about this UM. 515 00:32:55,960 --> 00:33:00,800 Speaker 1: With COVID nineteen, it's really exacerbated thing that we've known 516 00:33:00,840 --> 00:33:04,920 Speaker 1: about but haven't always really needed to do anything about 517 00:33:05,080 --> 00:33:09,160 Speaker 1: because the variations in demand were relatively minor, might be 518 00:33:09,200 --> 00:33:11,480 Speaker 1: a couple of points up or down, and might be 519 00:33:11,560 --> 00:33:14,960 Speaker 1: happening on a small scale. Now we're seeing swings in 520 00:33:15,040 --> 00:33:21,720 Speaker 1: demande up and down at a local level, depending on 521 00:33:22,520 --> 00:33:27,880 Speaker 1: where outbreaks have been taking place, where countries are flattening 522 00:33:27,920 --> 00:33:31,400 Speaker 1: the curve, where countries are getting back to normal, or 523 00:33:31,440 --> 00:33:35,760 Speaker 1: even cities and localities are are reacting and responding in 524 00:33:35,760 --> 00:33:41,120 Speaker 1: different ways. So it's now become business critical to understand 525 00:33:41,840 --> 00:33:45,520 Speaker 1: which parts of the United States or the world are 526 00:33:45,600 --> 00:33:49,360 Speaker 1: open and are open for business in a more traditional manner, 527 00:33:49,640 --> 00:33:52,400 Speaker 1: and which parts are still locked down, because you're going 528 00:33:52,440 --> 00:33:57,120 Speaker 1: to have such massive swings in demand that the success 529 00:33:57,200 --> 00:34:01,080 Speaker 1: of your business depends on knowing that UM. So that 530 00:34:01,080 --> 00:34:06,640 Speaker 1: that's really this ability to UM to really sense and 531 00:34:06,760 --> 00:34:11,680 Speaker 1: respond in real time, and the ability to act on 532 00:34:11,719 --> 00:34:14,600 Speaker 1: all of what you're sensing. UM is really at the 533 00:34:14,600 --> 00:34:18,400 Speaker 1: heart of of you know, retail three point oh, industry 534 00:34:18,760 --> 00:34:21,279 Speaker 1: three point oh however you want to phrase it. The 535 00:34:21,480 --> 00:34:27,239 Speaker 1: ramifications of digital commerce effect more than just the retailer. 536 00:34:27,360 --> 00:34:32,360 Speaker 1: The ramifications are felt upstream um to the consumer products 537 00:34:32,400 --> 00:34:36,400 Speaker 1: companies as well um frankly, because right now the business 538 00:34:36,480 --> 00:34:40,839 Speaker 1: model at the retail level is certainly in groceries, is 539 00:34:40,880 --> 00:34:47,920 Speaker 1: not supporting the growth of online shopping. The cost to pick, pack, fulfill, 540 00:34:48,160 --> 00:34:52,680 Speaker 1: and distribute those goods to consumers homes um is quite expensive, 541 00:34:52,760 --> 00:34:55,799 Speaker 1: and consumers, except maybe in a crisis period, are not 542 00:34:55,880 --> 00:34:59,759 Speaker 1: willing to pay a premium for that. So some of 543 00:34:59,800 --> 00:35:03,120 Speaker 1: that will now move upstream to the manufacturer, and so 544 00:35:03,200 --> 00:35:06,360 Speaker 1: they're going to have to think about new routes to 545 00:35:07,360 --> 00:35:11,080 Speaker 1: get goods to a pick up location, two new routes 546 00:35:11,160 --> 00:35:14,520 Speaker 1: to get goods into stores. Potentially they might be drop 547 00:35:14,560 --> 00:35:19,400 Speaker 1: shipping goods from their own warehouses directly to consumers homes. 548 00:35:20,040 --> 00:35:23,719 Speaker 1: That may also make them think about pack sizes in 549 00:35:23,760 --> 00:35:28,040 Speaker 1: different ways how they aggregate goods together. Especially if you're 550 00:35:28,080 --> 00:35:32,400 Speaker 1: thinking about traditional center core packaged goods that have a 551 00:35:32,400 --> 00:35:37,920 Speaker 1: longer shelf life, we may see something like pack sizes 552 00:35:38,200 --> 00:35:42,440 Speaker 1: increase in order to make the logistics workout for consumers 553 00:35:42,480 --> 00:35:46,719 Speaker 1: who are shopping online. We may also see consumers start 554 00:35:46,840 --> 00:35:51,560 Speaker 1: to adopt auto replenishment methods to buy those goods where 555 00:35:51,560 --> 00:35:55,080 Speaker 1: they get a steady supply of things you know, delivered 556 00:35:55,080 --> 00:35:58,680 Speaker 1: to them every month in exchange for the convenience of 557 00:35:58,719 --> 00:36:00,399 Speaker 1: not having to go to the store to either those 558 00:36:00,440 --> 00:36:03,319 Speaker 1: things and put them in your basket and load them 559 00:36:03,320 --> 00:36:05,759 Speaker 1: in your car and drive them home. So we're going 560 00:36:05,840 --> 00:36:09,520 Speaker 1: to see a lot of ramifications of this upstream on 561 00:36:09,560 --> 00:36:12,440 Speaker 1: the producers side manufacturer side as well. Yeah, if I 562 00:36:12,480 --> 00:36:15,880 Speaker 1: can give a very real example of that to share, 563 00:36:15,920 --> 00:36:19,799 Speaker 1: and it's an example that was actually add on our 564 00:36:20,800 --> 00:36:25,840 Speaker 1: Think twenty Digital event that we just had and Mark Foster, 565 00:36:25,960 --> 00:36:31,759 Speaker 1: r s v P of Services, interviewed UM, one of 566 00:36:31,800 --> 00:36:35,320 Speaker 1: the s vps from Free to Ly, and they talked 567 00:36:35,320 --> 00:36:42,200 Speaker 1: about the digital transformation that they've driven to change their 568 00:36:42,280 --> 00:36:47,360 Speaker 1: direct delivery model, which is actually the biggest private fleet 569 00:36:47,600 --> 00:36:52,200 Speaker 1: of truck deliveries you know in the US, five thousand 570 00:36:52,239 --> 00:36:55,640 Speaker 1: trucks a day being optimized to get Freely products all 571 00:36:55,680 --> 00:37:00,319 Speaker 1: the way through their supply chains into where whever they 572 00:37:00,320 --> 00:37:02,400 Speaker 1: need to be distributed, whether that at a store or 573 00:37:02,400 --> 00:37:07,520 Speaker 1: at other locations. Well, not every CpG company has a 574 00:37:07,640 --> 00:37:10,400 Speaker 1: model as advances of that, and what car is alluding to, 575 00:37:10,719 --> 00:37:13,920 Speaker 1: is well, how do you start to kind of plug 576 00:37:13,960 --> 00:37:16,440 Speaker 1: in those kind of engines that you know, free to 577 00:37:16,520 --> 00:37:20,400 Speaker 1: lay has into my model. If I'm a beer company 578 00:37:20,440 --> 00:37:23,360 Speaker 1: and I'm used to just distributing to certain places and 579 00:37:23,400 --> 00:37:26,880 Speaker 1: then I'm used to the restaurant companies getting them from 580 00:37:26,880 --> 00:37:29,520 Speaker 1: those places and getting them to the end consumer as well, 581 00:37:29,800 --> 00:37:32,160 Speaker 1: right now that model has died down significantly. So how 582 00:37:32,200 --> 00:37:35,799 Speaker 1: do I get my beer products much more direct to 583 00:37:36,560 --> 00:37:40,480 Speaker 1: the consumers, um, not just relying on on what is 584 00:37:40,480 --> 00:37:43,359 Speaker 1: coming through the supermarkets. And so you can see how 585 00:37:43,880 --> 00:37:46,360 Speaker 1: you know, you know, a CP company, like you know, 586 00:37:46,600 --> 00:37:50,400 Speaker 1: a beer manufacturer has got to think around next generation 587 00:37:50,640 --> 00:37:53,520 Speaker 1: of digital for its B two B model, but actually 588 00:37:53,560 --> 00:37:56,040 Speaker 1: they may have to get into the next generation of 589 00:37:56,080 --> 00:37:58,520 Speaker 1: delivery into a BBC model. And it's that kind of 590 00:37:58,600 --> 00:38:01,719 Speaker 1: change that we're that we're going to see being accelerated, 591 00:38:01,719 --> 00:38:06,279 Speaker 1: and that's companies having to adopt more common street or 592 00:38:06,360 --> 00:38:09,360 Speaker 1: zero type capabilities over and above where they had previously. 593 00:38:10,000 --> 00:38:13,360 Speaker 1: So in trying to imagine how technology could help businesses 594 00:38:13,360 --> 00:38:16,280 Speaker 1: and supply chains adapt and become more like a human 595 00:38:16,400 --> 00:38:19,279 Speaker 1: less like a you know, an automated machine, something that 596 00:38:19,280 --> 00:38:21,719 Speaker 1: that is able to have some agility and and and 597 00:38:21,920 --> 00:38:26,680 Speaker 1: insight into the process overall. How much would this kind 598 00:38:26,719 --> 00:38:31,200 Speaker 1: of technology just be about, you know, seeing more of 599 00:38:31,200 --> 00:38:33,759 Speaker 1: the data that's currently available at every step in the 600 00:38:33,800 --> 00:38:36,640 Speaker 1: supply chain, incorporating that and adapting, and how much of 601 00:38:36,640 --> 00:38:41,000 Speaker 1: it would actually be predictive because I imagine that big 602 00:38:41,000 --> 00:38:43,880 Speaker 1: problems come through and at each stage in the supply 603 00:38:43,960 --> 00:38:46,400 Speaker 1: chain where somebody sees, you know, they can't tell signal 604 00:38:46,480 --> 00:38:50,080 Speaker 1: from noise, like suddenly the dairy shelves are in empty 605 00:38:50,120 --> 00:38:51,960 Speaker 1: one day, and you don't know, like, is this part 606 00:38:51,960 --> 00:38:53,960 Speaker 1: of a trend that I need to adapt to or 607 00:38:54,000 --> 00:38:56,719 Speaker 1: is this just some weird fluke today. Yeah, I know, 608 00:38:57,000 --> 00:39:01,400 Speaker 1: it's a really good question, Joe. And the data is 609 00:39:01,520 --> 00:39:05,160 Speaker 1: there If the data is there in each part of 610 00:39:05,200 --> 00:39:07,960 Speaker 1: the process that we describe, it's there at the point 611 00:39:08,000 --> 00:39:12,960 Speaker 1: of purchase, it's it's there in the transportation logistics that 612 00:39:13,040 --> 00:39:15,800 Speaker 1: got that product to that point of purchase. It's there 613 00:39:15,800 --> 00:39:22,560 Speaker 1: in the manufacturing, it's there in the the raw goods produce. 614 00:39:23,080 --> 00:39:26,960 Speaker 1: But each of those are many different companies, and there 615 00:39:26,960 --> 00:39:29,160 Speaker 1: are many different segments of the industry, and therefore they're 616 00:39:29,200 --> 00:39:34,000 Speaker 1: very siloed. And so even though there the data is there, 617 00:39:34,200 --> 00:39:37,880 Speaker 1: and each of those subparts of the inter and value 618 00:39:37,960 --> 00:39:42,919 Speaker 1: chain are being optimized in their own individual piece. What's 619 00:39:43,000 --> 00:39:47,400 Speaker 1: not necessarily occurring is the optimization of the whole. And 620 00:39:47,520 --> 00:39:52,359 Speaker 1: so you know, the the opportunity in the the that 621 00:39:52,360 --> 00:39:54,800 Speaker 1: that kind of visibility question that you're kind of reaching 622 00:39:54,800 --> 00:39:57,400 Speaker 1: out of, Joe, is is how do you start to 623 00:39:57,680 --> 00:40:03,120 Speaker 1: overlay these kind of broad order platforms of of UM 624 00:40:03,320 --> 00:40:06,040 Speaker 1: enablement UM. So what I mean by how do you 625 00:40:06,440 --> 00:40:09,920 Speaker 1: get data together that's in disparate parts and in different 626 00:40:09,920 --> 00:40:12,440 Speaker 1: companies where you can make it available into the cloud? 627 00:40:12,880 --> 00:40:18,680 Speaker 1: How can you analyze data sets at scale UM that 628 00:40:18,760 --> 00:40:25,640 Speaker 1: are massive data sets solving really complex, highly undeterministic problems. Well, 629 00:40:25,680 --> 00:40:29,400 Speaker 1: you can chuck the power of AI into First of all, 630 00:40:29,400 --> 00:40:31,759 Speaker 1: what you do actually is you apply AI to the 631 00:40:31,800 --> 00:40:35,840 Speaker 1: individual sub processes and then you start to optimize subparts 632 00:40:35,840 --> 00:40:37,719 Speaker 1: of the system, and then later on you start to 633 00:40:37,760 --> 00:40:42,120 Speaker 1: optimize the fuller system. UM. Not possible by the way, 634 00:40:42,160 --> 00:40:45,759 Speaker 1: for everything, but but definitely possible for certain parts of it. UM. 635 00:40:45,840 --> 00:40:50,200 Speaker 1: And then of course you leverage this visibility platform that is, 636 00:40:50,520 --> 00:40:53,200 Speaker 1: I can track and trace anything through that whole supply 637 00:40:53,280 --> 00:40:55,840 Speaker 1: chain if it's already in the block chain. So you 638 00:40:55,880 --> 00:41:01,120 Speaker 1: can see how the connectivity and enabling technologies are starting 639 00:41:01,160 --> 00:41:04,600 Speaker 1: to come together that allows you to drive a much 640 00:41:04,840 --> 00:41:09,319 Speaker 1: smarter way of running these businesses end to end and 641 00:41:09,520 --> 00:41:14,279 Speaker 1: elevating beyond the process or the sub segment optimization that's 642 00:41:14,320 --> 00:41:19,400 Speaker 1: currently occurring. And you know, it needs the benefit of 643 00:41:19,440 --> 00:41:21,319 Speaker 1: this data to be shared in the way that I 644 00:41:21,360 --> 00:41:24,319 Speaker 1: described for people who actually see what actually by my 645 00:41:24,440 --> 00:41:27,160 Speaker 1: sharing this data with here, the some of the game 646 00:41:27,239 --> 00:41:30,359 Speaker 1: gets better. And that's the kind of things that we're 647 00:41:30,360 --> 00:41:33,880 Speaker 1: working on. You know, I've explained I made reference to 648 00:41:33,960 --> 00:41:38,120 Speaker 1: Food Trust earlier around that visibility of food. It was 649 00:41:38,280 --> 00:41:40,440 Speaker 1: it was started for safety, but it can track and 650 00:41:40,440 --> 00:41:44,439 Speaker 1: trace pretty much any characters you want as as food 651 00:41:44,480 --> 00:41:47,799 Speaker 1: moves through the supply chain. That's going to be hugely important. 652 00:41:48,520 --> 00:41:52,399 Speaker 1: A lot of the techniques that are being applied as 653 00:41:52,480 --> 00:41:56,200 Speaker 1: AI techniques to e g. The energy industry, and there's 654 00:41:56,200 --> 00:41:57,759 Speaker 1: a lot of AI that goes into that, and I've 655 00:41:57,800 --> 00:42:00,440 Speaker 1: been involved in that in the past. UM can be 656 00:42:00,520 --> 00:42:04,520 Speaker 1: applied to the AI of e g. Farming and that's 657 00:42:04,520 --> 00:42:09,440 Speaker 1: all we're doing with our Watson data platform for agriculture 658 00:42:09,480 --> 00:42:15,080 Speaker 1: that leverages are weather company assets and the ability to 659 00:42:15,719 --> 00:42:20,359 Speaker 1: connect a data from multiple data sources in different parts 660 00:42:20,400 --> 00:42:22,719 Speaker 1: of the value chain. Well, that's where you need the 661 00:42:22,800 --> 00:42:27,759 Speaker 1: ability to do things like multi cloud management. And that's 662 00:42:27,800 --> 00:42:32,120 Speaker 1: where our acquisition of red Hat and the capabilities of 663 00:42:32,160 --> 00:42:35,040 Speaker 1: that company brings starts to come to bear. So we 664 00:42:35,200 --> 00:42:38,600 Speaker 1: have all of the ingredients to start to solve this 665 00:42:38,719 --> 00:42:44,360 Speaker 1: problem and ultimately make much better use of the world's 666 00:42:45,360 --> 00:42:51,520 Speaker 1: finite resources and therefore reduce waste. But it's about applying 667 00:42:52,360 --> 00:42:59,279 Speaker 1: these digital transformative technologies to the bigger parts of the 668 00:42:59,320 --> 00:43:02,560 Speaker 1: systems and end to end than just trying to solve 669 00:43:02,600 --> 00:43:07,239 Speaker 1: the individual components. So Luke and Carl, how do you 670 00:43:07,280 --> 00:43:12,120 Speaker 1: see um retail in you know, physical storefront retail and 671 00:43:12,200 --> 00:43:18,120 Speaker 1: digital commerce adapting after COVID nineteen. Well, I think, you know, 672 00:43:18,280 --> 00:43:20,719 Speaker 1: some of the things that we've been talking about are 673 00:43:20,920 --> 00:43:25,120 Speaker 1: going to continue to accelerate. I think this has driven 674 00:43:25,200 --> 00:43:31,719 Speaker 1: a a significant shift to recognize that there is an 675 00:43:31,760 --> 00:43:38,160 Speaker 1: increase need to enhance the technology enablement of that end 676 00:43:38,200 --> 00:43:44,080 Speaker 1: to end supply chain and retail experience, and this enhancement 677 00:43:44,320 --> 00:43:49,160 Speaker 1: of digital capability. UM, you know, people are going to 678 00:43:49,280 --> 00:43:52,640 Speaker 1: understand that they can do more and buy more and 679 00:43:52,719 --> 00:43:55,959 Speaker 1: experience more in a digital context. And so I think 680 00:43:56,360 --> 00:44:00,400 Speaker 1: we're going to see, you know, a step chain enge 681 00:44:00,440 --> 00:44:05,080 Speaker 1: occur in this period of how much is able to 682 00:44:05,160 --> 00:44:09,360 Speaker 1: be done digitally? And then right now people are just 683 00:44:09,400 --> 00:44:11,440 Speaker 1: figuring out how to get it done and how to 684 00:44:11,480 --> 00:44:13,640 Speaker 1: make it work and how to stitch together the fulfillment. 685 00:44:14,080 --> 00:44:16,600 Speaker 1: But the next thing that will come is how do 686 00:44:16,640 --> 00:44:18,799 Speaker 1: I make that a great and beautiful experience and how 687 00:44:18,800 --> 00:44:21,759 Speaker 1: do I drive loyalty and values and all the other 688 00:44:21,800 --> 00:44:24,000 Speaker 1: things that you want. And so I think there's going 689 00:44:24,000 --> 00:44:30,480 Speaker 1: to be a continuation of digital experience enhancement, very pervasive 690 00:44:30,520 --> 00:44:33,719 Speaker 1: across multiple segments of the industry, continuing at quite some 691 00:44:33,800 --> 00:44:38,919 Speaker 1: pace post the event postal crisis. I think it's it's 692 00:44:38,960 --> 00:44:42,879 Speaker 1: too early to be able to be precise about what's 693 00:44:42,880 --> 00:44:47,319 Speaker 1: going to happen. Um you know, two stores, you know, 694 00:44:47,400 --> 00:44:52,200 Speaker 1: I think, you know, I think there will be a 695 00:44:52,280 --> 00:44:56,440 Speaker 1: rebalancing of the kind of the physical footprints that companies 696 00:44:56,480 --> 00:45:00,280 Speaker 1: have because they will be driving more more digit really 697 00:45:00,360 --> 00:45:03,359 Speaker 1: and therefore there will be some form of reduction in 698 00:45:03,640 --> 00:45:08,440 Speaker 1: physical footprint. But again, when you have that physical footprint, 699 00:45:09,280 --> 00:45:11,000 Speaker 1: you know, you need to make sure that it's delivering 700 00:45:11,080 --> 00:45:14,680 Speaker 1: what the customer wants. UM and is you know, for 701 00:45:14,680 --> 00:45:16,799 Speaker 1: for some of the higher end things that we do 702 00:45:17,560 --> 00:45:21,600 Speaker 1: what the current customer customer really wants from an experienced perspective. 703 00:45:21,680 --> 00:45:26,720 Speaker 1: So I do think the ongoing digitization of the store 704 00:45:26,840 --> 00:45:31,000 Speaker 1: will continue, but it might be for fewer stores over time. 705 00:45:31,640 --> 00:45:34,439 Speaker 1: And of course, you know the things that we've talked 706 00:45:34,440 --> 00:45:39,719 Speaker 1: about in terms of supply chain resilience, supply chain responsiveness, 707 00:45:39,880 --> 00:45:44,719 Speaker 1: supply chain intelligence, well that's going to be needed irrespective 708 00:45:44,760 --> 00:45:47,160 Speaker 1: of where the channel is that you're fulfilling, and so 709 00:45:47,200 --> 00:45:50,239 Speaker 1: we're going to see that ongoing trend. So I do 710 00:45:50,400 --> 00:45:55,960 Speaker 1: think this will will result in an ongoing and continuous 711 00:45:56,800 --> 00:46:00,960 Speaker 1: level of innovation and enhancements in various components that we've 712 00:46:01,000 --> 00:46:07,520 Speaker 1: talked about UM today. I believe, you know, the COVID 713 00:46:07,600 --> 00:46:14,840 Speaker 1: nineteen crisis is extremely disruptive at all levels of the business. Frankly, 714 00:46:14,880 --> 00:46:19,000 Speaker 1: whether you're an essential brand, an essential retailer, or whether 715 00:46:19,080 --> 00:46:22,800 Speaker 1: you're considered non essential UM, it's disruptive in different ways. 716 00:46:23,520 --> 00:46:28,799 Speaker 1: And as we work our way through this UM and 717 00:46:28,840 --> 00:46:32,560 Speaker 1: as Luke said earlier, we believe this is this is 718 00:46:32,600 --> 00:46:36,800 Speaker 1: going to stay with us for a while UM, and 719 00:46:37,520 --> 00:46:41,919 Speaker 1: there's going to be a continued variability, you know, high 720 00:46:41,960 --> 00:46:46,080 Speaker 1: degree of variability of what's happening with consumers, which then 721 00:46:46,200 --> 00:46:50,440 Speaker 1: impacts up through retail and uh consumer products, even up 722 00:46:50,440 --> 00:46:56,799 Speaker 1: to farms. As this ripples through over the next eighteen two, 723 00:46:56,800 --> 00:47:00,919 Speaker 1: maybe twenty four months, we see that it's probably going 724 00:47:01,040 --> 00:47:07,439 Speaker 1: to spur companies to do things that they know they 725 00:47:07,440 --> 00:47:10,200 Speaker 1: should have done over the past two or three or 726 00:47:10,200 --> 00:47:14,120 Speaker 1: four years, but have not always found the means or 727 00:47:14,160 --> 00:47:17,359 Speaker 1: the impetus to take action on. You know, companies, when 728 00:47:17,360 --> 00:47:19,960 Speaker 1: we talk to our clients, you know they know they 729 00:47:20,000 --> 00:47:24,040 Speaker 1: need to be better enabled with digital commerce, whether that's 730 00:47:24,080 --> 00:47:26,640 Speaker 1: B two B or B two C. They know they 731 00:47:26,680 --> 00:47:33,920 Speaker 1: need to enable customers to shop seamlessly across channels or touchpoints. UM. 732 00:47:33,960 --> 00:47:39,200 Speaker 1: They know they need more insight and analytics on data 733 00:47:39,800 --> 00:47:42,799 Speaker 1: that they have in their company and on data that's 734 00:47:42,800 --> 00:47:46,319 Speaker 1: out freely available or for pay available in the marketplace, 735 00:47:46,320 --> 00:47:50,680 Speaker 1: but available data. And they know they need to be 736 00:47:50,800 --> 00:47:55,080 Speaker 1: able to adjust their operations so that they can be 737 00:47:55,160 --> 00:47:59,319 Speaker 1: more kind of intelligent and responsive based on all of 738 00:47:59,360 --> 00:48:03,400 Speaker 1: that data. They've known they need to change their cost model. 739 00:48:03,440 --> 00:48:05,960 Speaker 1: They've known they need to reduce costs. They know they 740 00:48:06,000 --> 00:48:10,080 Speaker 1: need to balance agility and efficiency UM. But they that's 741 00:48:10,120 --> 00:48:12,719 Speaker 1: a difficult thing to do. It's a fundamental change to 742 00:48:12,800 --> 00:48:16,680 Speaker 1: the way many of these businesses operate. UM. And one 743 00:48:16,719 --> 00:48:18,879 Speaker 1: of the things I think we will see coming out 744 00:48:18,920 --> 00:48:23,440 Speaker 1: of uh COVID nineteen and in the middle of COVID 745 00:48:23,520 --> 00:48:28,280 Speaker 1: nineteen even is companies are starting to address these things 746 00:48:28,360 --> 00:48:31,960 Speaker 1: that were important but not urgent, and now they've become 747 00:48:32,000 --> 00:48:34,799 Speaker 1: both urgent and important, and that sent that tends to 748 00:48:34,840 --> 00:48:38,680 Speaker 1: spur our clients us for every company into action. So 749 00:48:38,760 --> 00:48:41,000 Speaker 1: you've been talking about what you expect to see. What 750 00:48:41,080 --> 00:48:43,759 Speaker 1: would you love to see, like, what what would what 751 00:48:43,920 --> 00:48:46,319 Speaker 1: kind of adaptations are changes do you think would be 752 00:48:46,360 --> 00:48:50,319 Speaker 1: the most ideal? So one thing I would love to 753 00:48:50,400 --> 00:48:57,520 Speaker 1: see is more conscious consumerism taking place. UM. I think, 754 00:48:57,600 --> 00:49:00,160 Speaker 1: as again, as we've talked about a little early, our 755 00:49:00,239 --> 00:49:05,800 Speaker 1: consumers are being more concerned now about about people and 756 00:49:05,960 --> 00:49:08,560 Speaker 1: place and where things come from and how they're made. 757 00:49:09,360 --> 00:49:11,520 Speaker 1: We have we're in an industry that has a lot 758 00:49:11,560 --> 00:49:15,120 Speaker 1: of waste to push goods out to consumers, and frankly, 759 00:49:15,160 --> 00:49:18,560 Speaker 1: consumers contribute a lot of that waste themselves. I think 760 00:49:18,600 --> 00:49:24,120 Speaker 1: if we overall start to adjust toward fewer things that 761 00:49:24,160 --> 00:49:27,319 Speaker 1: potentially mean more to us, that would be a better 762 00:49:27,360 --> 00:49:31,279 Speaker 1: thing for everyone. My mind is similar, Joe. I mean, 763 00:49:31,520 --> 00:49:33,600 Speaker 1: I think we've been talking about a lot of re 764 00:49:34,080 --> 00:49:38,520 Speaker 1: engineering of the capabilities that make up the enterprise. We've 765 00:49:38,520 --> 00:49:42,600 Speaker 1: been re engineering of commerce, re engineering of supply change, 766 00:49:42,600 --> 00:49:47,840 Speaker 1: reengineering of manufacturing and sourcing activities. We are going to 767 00:49:47,960 --> 00:49:52,120 Speaker 1: go through a major period of companies re engineering themselves 768 00:49:52,160 --> 00:49:57,320 Speaker 1: to respond to what the new normal looks like. Wouldn't 769 00:49:57,360 --> 00:50:01,880 Speaker 1: it be great if the re engineering head kind of 770 00:50:01,920 --> 00:50:08,000 Speaker 1: sustainability at the heart of that re engineering, so that 771 00:50:08,440 --> 00:50:12,600 Speaker 1: we fulfill customers needs and demands. But we're doing that 772 00:50:13,080 --> 00:50:15,960 Speaker 1: at a much more responsive and a much more balanced 773 00:50:16,880 --> 00:50:21,760 Speaker 1: regional We've balanced a global way, and we bring back 774 00:50:22,280 --> 00:50:25,759 Speaker 1: that sense of understanding and identity about where things are 775 00:50:25,760 --> 00:50:28,439 Speaker 1: made from and how they're consumed all the way through 776 00:50:28,440 --> 00:50:31,080 Speaker 1: the value chain that we kind of lost in the 777 00:50:31,920 --> 00:50:34,279 Speaker 1: last twenty years. Wouldn't be great if this, this this 778 00:50:34,360 --> 00:50:36,920 Speaker 1: period brings that back into place, because it's going to 779 00:50:37,000 --> 00:50:41,279 Speaker 1: make ultimately a more sustainable society. Means that things will 780 00:50:41,320 --> 00:50:45,440 Speaker 1: be better distributed to the broader population in the world, 781 00:50:45,840 --> 00:50:47,680 Speaker 1: and it means that less things were going to waste, 782 00:50:47,719 --> 00:50:53,239 Speaker 1: and that would be a fantastic outcome. I think. All right, 783 00:50:53,320 --> 00:50:56,239 Speaker 1: so there you have it. Thanks once more to Luke 784 00:50:56,280 --> 00:50:58,239 Speaker 1: and Carl for taking time out of their busy days 785 00:50:58,360 --> 00:51:00,440 Speaker 1: to chat with us here, and if you would like 786 00:51:00,520 --> 00:51:04,280 Speaker 1: to learn more, go to IBM dot com slash smart Talks. 787 00:51:04,400 --> 00:51:08,279 Speaker 1: That's IBM dot com slash smart Talks. And if you 788 00:51:08,280 --> 00:51:10,680 Speaker 1: would like to catch up on other episodes of Stuff 789 00:51:10,719 --> 00:51:13,080 Speaker 1: to Blow Your Mind, you can find us wherever you 790 00:51:13,080 --> 00:51:15,360 Speaker 1: get your podcasts and wherever that happens to be. We 791 00:51:15,440 --> 00:51:19,000 Speaker 1: just asked that you rate, review, and subscribe huge thanks 792 00:51:19,040 --> 00:51:22,240 Speaker 1: as always to our excellent audio producer Seth Nicholas Johnson. 793 00:51:22,520 --> 00:51:24,040 Speaker 1: If you would like to get in touch with us 794 00:51:24,040 --> 00:51:26,640 Speaker 1: with feedback on this episode or any other, to suggest 795 00:51:26,719 --> 00:51:28,840 Speaker 1: a topic for the future, just to say hello, you 796 00:51:28,840 --> 00:51:31,879 Speaker 1: can email us at contact at stuff to Blow your 797 00:51:31,880 --> 00:51:42,200 Speaker 1: Mind dot com. Stuff to Blow Your Mind's production of 798 00:51:42,239 --> 00:51:44,880 Speaker 1: I Heart Radio. For more podcasts for My Heart Radio, 799 00:51:45,080 --> 00:51:47,760 Speaker 1: visit the i Heart Radio app, Apple Podcasts, or wherever 800 00:51:47,760 --> 00:52:03,000 Speaker 1: you're listening to your favorite shows. Three to two Propert