Ep. 45: “Companies must embrace digitalisation to stay relevant” Ankit Podcast

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Ep. 45: “Companies must embrace digitalisation to stay relevant”

In this episode of The WTiN Podcast, we talk to Debbie Shakespeare, senior director, Compliance and Sustainability, and Michael Hu, director of Digitization, Retail Branding and Information Solutions, at Avery Dennison.

Jessica Owen
Hello. My name is Jessica Owen, and I am the Deputy digital editor at WTiN, and this is the WTiN podcast, the fourth industrial revolution is underway, and the world of textile and apparel is just one industry that is benefiting from new and innovative technologies. With this in mind, for this series, I'll be talking to companies across the textile apparel landscape about their new technologies, the benefits of digitalization, and the advice that they'd give to others who are trying to implement such solutions. This week, I am joined by Debbie Shakespeare and Michael Hu from Avery Dennison. Debbie is the Senior Director of compliance and sustainability, and Michael is the director of digitization, retail, branding and Information Solutions. They talk about the company's RFID and blockchain technologies, the importance of transparency and sustainability and how COVID 19 has accelerated these movements. Well, hello, Debbie and Michael. Thank you very much for joining me today. How are you both? 

Michael Hu
very well. Jessica, thank you doing very well. Thank you.

Jessica Owen
Good, good. Okay, so before we talk about anything else today, do you mind each just telling me a bit about yourselves and your roles at Avery Dennison,

Debbie Shakespeare
yeah, no problem. So I'm Debbie Shakespeare. I'm from the UK originally, but I'm now based over in Massachusetts, and I head up a sustainability and product and social compliance organization, okay,

Jessica Owen
and Michael, what about yourself?

Michael Hu
Yes, I'm Michael Hu so I'm based in Portland, Oregon, and I'm responsible for our digital solutions in terms of driving strategy and innovation for our apparel business, Okay,

Jessica Owen
interesting. And I guess, actually, before we go even further, it'd be great to have a bit more information about the company in general. I mean, what is, what does the company do? Exactly? Because, I mean, it sort of has its fingers in many pies, from what I understand,

Debbie Shakespeare
yeah, for sure. So if you don't mind, I'll take that one. So just both said, we both work for Avery Dennison, and Avery Dennison's a Global Materials and science company. And what that really means is that we're supplying and manufacturing labeling on so many different fronts, and we've got a statistic around how many times that you touch and see our labels each day, from that shampoo bottle that you use in the morning to the road signs to all of the labels that sits in clothing, and Michael and I both work within the apparel division, and we're an organization that really sits in the middle of the apparel industry, supplying both customers that you buy or consumers that you buy your clothes from, but then also the factories and brands that manufacture that clothing,

Jessica Owen
right? Okay. And so the company does have several sort of different technologies. And I think I read elsewhere that you sort of do architecture, automotive, medical and so on. But as you're both in the apparel industry, I was just wondering if you could tell me more about your intelligent labels. I mean, they seem quite interesting. So, I mean, how do they work? Exactly? Yes,

Michael Hu
I'll take that one. So from an intelligent labels perspective, what we do is we incorporate digital technologies such as RFID into our products. So whether it's a graphic tag or a label that goes into a garment, we incorporate that technology that that provides basically two key aspects. One is that that technology then allows a unique identifier to be attached to that garment through that technology. And that provides the benefit of allowing that piece of garment to be tracked individually as it moves from production through supply chain to retail, etc. And then the second aspect of the technology, as specifically as it relates to RFID in particular, is that it's got a unique attribute, in the sense that it can be scanned very quickly by fixed andor handheld readers at different ranges in a way that's not possible with other technologies. So technology that can provide that unique identification on the item level and yet drive efficiencies in being able to track items very quickly.

Jessica Owen
Okay? And when we say that these are RFID tags, are these literally just on, I don't know, the label that's stitched into your clothing. Can it be attached to that? Or is it sort of the swing tag? Or where are these put? Yes,

Michael Hu
there's quite a bit of flexibility. They can be applied to the graphic tags or price tickets. They can be applied to packaging. They can apply to the labels that. Get fixed to garments, you know, on the you know, inside of the garment as well. So quite a bit of flexibility in how they get attached to the garment

Jessica Owen
also. I mean, what sort of information then do these tags hold? So

Michael Hu
primarily, the tags are encoded with a unique identifier. And so what that does is as that identify, or that tag is attached to the garment, it basically gives the ability to then create a digital identity for the garment. So so then, with that, you can leverage that RFID D tag to be able to track location of the garment as it moves through the supply chain, and leverage that technology to maintain tighter inventory control, to understand, you know where items are located, which allows, you know, our customers to be much more efficient in not only managing their inventory, but to be able to fulfill omni channel, you know, orders from from their their customers. So overall, drives supply chain efficiency, drives inventory management control, and ultimately, a better customer experience when it comes to that omni channel

Jessica Owen
fulfillment, okay, right? And I mean, that was actually going to be one of my questions. I was going to ask, how to sort of both brands and customers benefit from this. So, I mean, you're saying one of the main things is probably like to improve inventory then, and essentially you can also free up retail staff and so on.

Michael Hu
Yes, it does drive that efficiency, because the technology, the way you can very quickly and efficiently identify what what items are in certain locations, and you can do so by by by leveraging those handheld or fixed scanners in a way that eliminates personnel from having to do manual inventory checks, open up boxes, see what specific items might be in a box. All that can be done very quickly and efficiently leveraging that RFID technology. Yeah.

Jessica Owen
Well, it's funny. Years and years ago, I worked for a British clothing brand, and I used to spend a good two to three hours on the shop floor, opening up boxes, trying to work out what, what clothing arrived that week, hanging up on hangers and putting it out on the floor. And I can imagine just how much time you would save from that. Actually. That's really interesting. I mean, have you got any case studies at all about maybe companies that have adopted your technology.

Michael Hu
Yeah, so while we've seen pretty broad adoption of these technologies, unfortunately, I can't really cite any specific customer names due to confidentiality, but what we have seen is that there's been broad adoption and in US and EU as an example to really drive those supply chain efficiencies, both in the supply chain as items go through from factory through logistics to DC to retail, but interestingly enough, we also see that adoption in retail as well, from an inventory perspective, but also driving consumer engagement experiences as a digital showcase trigger,

Jessica Owen
okay, right? And so just moving on a bit. I mean, how would companies who have never dealt with this kind of technology before even begin to sort of integrate it into their own systems? Is it purely just getting in touch with you, and the next time they put a tag on, it just happens to be a different tag,

Michael Hu
right? So there's, there's multiple aspects here. I think, I think first, it really starts with an assessment of, were there opportunities to drive that operational efficiency, you know, whether it is in that supply chain, or whether it's in retail, to get tighter control of inventory management. Then from there, you know, I think the integration is, is is at several levels. So yes, it does start with the tags and integrating those into product or or on packaging, and then the next The second aspect is around identifying the infrastructure that's needed at the physical locations to be able to scan and read those tags to be able to track location and movement of of product. And then third is the software integration that as those items are being scanned through handheld or fixed scanners, that all that data can be collected and then be used to really understand, you know, the location of all these items, to really drive the desired outcomes around those operational efficiencies, inventory management, etc, in order to achieve that ROI so, so there is quite, quite a bit there. It sounds complex, but, but to your point, good news is that there. There's a lot of expertise that we can provide, as well as other companies that can help, help you manage all of that.

Jessica Owen
And I'm assuming that it's also sort of the case that once it's there, it's actually very easy to use, and it probably quite simple to understand, but it's just that initial, you know, trying something new, really? Yep,

Michael Hu
that's right. So there is a bit of investment to to get there, but I think what we've what our customers have found, is that the ROI payoff comes pretty quickly because of the efficiencies that that are gained through the technology, and it's ease of use versus more manual processes.

Jessica Owen
Okay. Now, I read on your website something quite interesting that I think it said that RFID will be a defining technology for businesses over the next 10 years or so. I mean, what do you guys mean by this? How come?

Michael Hu
Yeah, so I think we've seen that digital transformation has been occurring industry wide for quite some time in multiple areas that includes supply chain. You know, it includes marketing and how brands are reaching out to customers and driving them to e commerce and omni channel. And so I think with COVID, we've really seen that accelerate and moving forward. We do see that continuing, both in terms of continuing to drive those operational efficiencies, but also playing a key role in retail experiences and triggering digital experiences and showcases in retail such as like we've seen with our partnership with Puma in their New York City flagship store, we also see a trend towards friction unless checkout for obvious reasons. And so we do see that RFID and these digital technologies play a key role in moving forward as digital continues to be an emphasis across the industry. Well,

Jessica Owen
I mean, you mentioned COVID there. I mean, that's something I want to come on to later, but just in the meantime, there was another technology of yours that I kind of wanted to talk about, and that's blockchain. So, I mean, before we go any further, Blockchain confuses me a bit. So do you mind just explain to me a bit about it, like, what is it? What does it do?

Michael Hu
Yes, absolutely. So blockchain is a distributed ledger technology. Not sure that helps to explain what it is. So let me dive a little deeper. Really, the technology has two key properties that make it interesting. First, is distributed, meaning that the data that's held in the blockchain isn't controlled by a single centralized entity, but it's managed by multiple entities that work together. So what that means is that you don't have one person or one entity basically telling you history of an item, or telling you about the attributes, but you've got a collection of folks that are collectively validating that data. The second property of the technology is that once you put it into the blockchain, once you put data into the blockchain, that data can't be changed, so while you might reverse a transaction. So say, you've sold a piece of garment, but the consumer has returned that garment. You can't go back and erase that completely. The original transactions there. But then you've you've added another transaction around the return as an example. So, so what you get is a full view that because you've got multiple entities that are validating these transactions and the data and in the fact that it can't be changed, really makes it a technology that provides far greater trust in the information that's held in that blockchain. So really, really useful for our customers that are trying to tell a story around transparency, provenance, etc, right? Okay,

Jessica Owen
well, that is actually a bit clearer. Thank you. And so how is Avery Dennison using Blockchain? Then, I mean, I think I saw that you've got one particular product that's called Janella. Is that right? Do you mind just telling me a bit more about that? Yeah,

Michael Hu
so through our partnership with everything, we have a offering, product offering called Janella. Part of that is the capability to leverage blockchain to do exactly what we just talked about, which is to leverage that technology to incorporate data around a garment, including, you know, materials that are being sourced and used to produce that garment and and collect that information in the blockchain that. Allows for that trust as that information is being accessed by consumers. So we've demonstrated this with the Alex Initiative, where we work with them to basically demonstrate to consumers, you know, the provenance of a garment and and the the materials that have gone into the production of that

Jessica Owen
right, okay. And, and all of this information is that, once again, integrated into the tag and it can be scanned. Is that how it works? Yes,

Michael Hu
exactly. So the tag, where the label will include a digital trigger, such as the QR code you scanned, and so the scan of that QR code then allows access into the blockchain to retrieve that data. And again, because it's coming from the blockchain, we know that the data that's coming out of that is can be trusted, okay,

Jessica Owen
right? And with you. And so I think I also saw, when I was sort of having a bit of a doing some research on your website is that, as you said there, it sort of just enhances the trust around a product, and I think one of the things that it can also do is sort of protect products against issues such as counterfeiting. How big an issue is that in the industry? I mean, is there quite a lot of demand for technologies that can protect things such as that. 

Michael Hu
Yeah, counterfeiting is definitely a challenge that the industry has been facing for some time, and we do see that that is continuing and even getting worse, in a way, especially as you know, part of the trends around driving consumers to e commerce and, of course, COVID emphasizing e commerce and so that creates opportunity for counterfeiters to introduce fake products into the supply chain. So with that, we do see that there's demand for brand protection in terms of security labeling that allows products to be authenticated, and then, and then, on top of that, you know, because of the trust that blockchain technology provides, it adds that additional level of trust that that can help brand Solve great market diversion and counterfeit issues,

Jessica Owen
okay? And can it also help with things such as theft within stores? Or is that something else? Yeah,

Michael Hu
theft, theft within stores, is something that that technologies such as RFID can aid with. I think if you think of the EAS hard tags that are commonly deployed to to detect if, if products are being shoplifted. You know, we've seen the emergence of leveraging RFID. You know, if that technology already exists on the garment for other purpose, such as supply chain efficiency. We're starting to see the emerging use of RFID as a way to not have to manage those hard tags, you know, put them on, yeah, take them off. Garments. So, so some of those technologies can can aid with that as well.

Jessica Owen
Okay, interesting. Um, right. Well, moving on. I just wanted to talk more about a topic that is, well, it's huge over the last couple of years, and that's sustainability. I understand that this is something really important to Avery Dennison, is that right? Yes,

Debbie Shakespeare
I would say it definitely is. And we take really seriously that role that we play within the industries that we work within, and when we think about sustainability, we really think about it in three areas, and some of those really do tie directly back to sort of the digital trends that you've been talking about with Michael. So the three things that we think about is how we can innovate to accelerate the circular economy, how we can reduce our environmental impact on our own sites, but but also within our supply chains. And then lastly, how we can be a force for good, adding value for our people. So really, you know, three areas, thinking about the circular economy, thinking about environmental impact, and really thinking about people and how our thinking has evolved. It is really thinking about that role that we can play with the industry that we work within, and how we can expand our tools and our vision to help enable that circular economy and transparency.

Jessica Owen
Okay, and so you, I mean, Michael, just sort of mentioned some of the benefits that RFID and things like blockchain can bring. Does that have a place in sustainability, then, and the three things that you've just mentioned, do they all sort of interlink? Yeah, completely. And

Debbie Shakespeare
I think one of the things that we've seen is the really interesting in the last 12 months, how there's this direct link now between sustainability and people wanting to be able to build trust with their consumers and provide transparency to their. Consumers and how you can use digital triggers, whether it be QR codes or other triggers, to be able to provide that transparency and that trust. It's really interesting intersection.

Jessica Owen
On that note, I saw recently that your company has actually published a report about sustainability and also transparency as well, because the two sort of go hand in hand. And as Michael said earlier, COVID 19 is now playing a role in this, and it's sort of shone a light on the urgency of the situation. I mean, would you agree with that? Then, Yeah,

Debbie Shakespeare
completely. And I think on so many levels. So we did the report with the future laboratory, and really started off in that report by trying to show how connected issues are, from a product point of view to social issues. And really showed that during COVID that consumers really wanted and expected more provenance on their products, and wanted to know more about where they were spending their money. So really started to kind of highlight that, that focus from consumers, I think, and then as time's gone on, when we think about the space that we're in, in the apparel space, you know, unfortunately, you know us as consumers, we don't have so much money to spend right now, it's a difficult time, so people have been far more conscious on where they're spending their money, you know, how they're spending their money, and choosing it to spend it with brands that really have got their same ethos and thoughts that they have.

Jessica Owen
It's interesting that you say that actually, because I'm certainly probably one of those people you're talking about. I mean, especially now I've got maybe a bit more time at home, I sort of do a bit more research. And obviously, the job that I'm in, you learn about these things every day, and you do start to sort of look at products and think twice about it, and maybe think, well, I don't know, think more about the longevity of products as well. And I think the other day I was on the shop and other stories, I think it might be a H M brand. And I think you can even filter now for sustainable materials, and that's really interesting. And I guess your RFID tags and technologies, you're saying that you can have a look at sort of the materials and where they come from. And I think again, that's something that consumers seem to really want to want to know about these days.

Debbie Shakespeare
Yeah, completely. And I think kind of post COVID, we've all got far more used to using our phones and the QR codes, you know, to order our meals and our drinks, but, but we've kind of got really used to using it in stores and being able to kind of wander around, say, using stores. Those of us can get to stores that the stores are open, and you can kind of get in them and do it, and, no, that's not everywhere. But yeah, yeah, completely, completely agree with what you're saying. 

Jessica Owen
So let me get this straight then. So closing the stores, they'll have these tags, or might even have QR codes. Can the a customer then actually just scan that on their phone and find out all the details while they're there in the store.

Debbie Shakespeare
Yeah, so if it's been enabled. So RFID itself isn't a consumer facing technology. You need other technology to be able to enable that with the QR code. And some of the pilots that we've been running, is really as simple as a consumer being able to go in and scan a QR code and then, depending on the story that that brand wants to give, that QR code could tell a consumer, you know, eventually, how to recycle the garment. You know, what's the provenance behind that garment? What? What are the sustainability credentials? And we really envisage this, this, this world eventually, that, you know, every garment, it's not only got a digital story that goes with it, but, but when every garment's designed, it's kind of got an end of life that that's enabled by this digital trigger,

Jessica Owen
right? Oh, that's interesting then, because, I mean, you do have things information on tags anyway, like 95% polyester, 5% elastane, but that is it. That's about as far as it go. Or it might say made in China or Taiwan or somewhere like that. But that'd be really interesting, I think, and a lot of people would really appreciate that, definitely.

Debbie Shakespeare
Yeah, I think, as well when I kind of think about how the shopping industry is going to change. So, you know, you think through how we've all changed our shopping habits in the last sort of six months. We used to go in stores, and now we're having to buy everything online and do the in store pickup. So brands need to be able to engage with consumers in different ways. So this is another use case behind the technology. You want to be able to breed that loyalty?

Jessica Owen
Yeah, definitely. No, I get that. And I just wanted to go back to this report then it's called the new transparency. Why was it commissioned then, and what sort of the mission here as such? I mean, you've produced a report, but what are the next steps that you want to take, or is it a matter of just highlighting the situation?

Debbie Shakespeare
At the moment, I would say it was we put it together for two reasons that the first one was to be able to highlight the situation. Again, we're a company that provides labeling and transparency tools in so many different industries, and we wanted to put a report together that was was brand agnostic, so you can see that we don't just talk about our solutions in there. We're talking about lots of other company solutions, and really being able to show the use cases that can sit behind this technology to be able to inspire consumers, but also brands on how to sort of get started and get on the journey, a bit, a bit of a call to action,

Jessica Owen
right? And there were some other really interesting findings, actually, that I sort of just noted down. So I think, for example, this report said that, like you sort of said earlier, 70% of people feel trust in a brand is more important than it maybe was in the past, and that they want to, sort of consumers want to know where their products come from. But I mean, are there any other things that, maybe recent times or even the pandemic has highlighted?

Debbie Shakespeare
Yeah, I would say there are probably a couple of things. And you know, the report completely kind of tied back to what we were hearing and seeing is that consumers gain trust from from brands that really tell their stories and that are credible in the storytelling. I would say some of the things that the report and also the pandemics highlighted is how important that transparency see really is across businesses. You know, we've seen that not just Avery Dennison, but more broadly, in the ESG space, those companies that really do focus on governance and transparency deep into their supply chain really have performed better during the pandemic than companies that haven't, and that's because they've got a view of what goes on within the supply chain, and that's one of the other things that we've tried to highlight in the report, is these things can't be viewed in isolation. It's really that total visibility of your supply chain and the impacts that it has, and then communicating that on to consumers and people that use the products. 

Jessica Owen
So would you say it's fair to say that maybe these brands that are embracing more sustainable initiatives and digital technologies are the ones that are going to win, and we actually could see maybe some well known brands that I know, there's definitely a few in the UK that I don't think sustainability is exactly high on their agenda. And actually they might, you know, they might fall down the cracks in years to come, and they might actually go bust, perhaps, yeah,

Debbie Shakespeare
it's really interesting, and kind of, we take this view now that it's going to happen, you know, traceability, transparency in some form, is going to happen, and it's not going to be a case of if you do it, it's going to be a case of when you do it because consumers are going to buy from brands they can trust in and and transparency engages customers, and it builds trust,

Jessica Owen
right? Yeah, understood. And that idea you mentioned earlier about being able to maybe walk around a store and scan a QR code and the way shopping might change. I mean, what sort of timescale Do you personally think that that is? I mean, are we talking the next couple of years? Next 10 years? Yeah, it's

Debbie Shakespeare
really interesting. You can look into in some pilots that are going on with stores now that, you know, no checkouts, everything's done by QR code. And you load it in your basket and and you walk out of the store, that's kind of one extreme. I think when it you'll really start to see an influx of QR codes coming into the market in the next year, year and a half. And we say that based on some of the pilot work that we're doing now with customers, we know that they've got use cases that are going live in the next sort of 1218, months worth of season. So we will see it come through over that period of time, and it will be your mainstream brands that are going at one time. There are some fast movers that are going to sort of slight, slightly faster paces.

Jessica Owen
Okay, interesting. Um, well, we're sort of running out of time, but I just wanted to ask you before we end. I mean, so obviously, there is this digital shift happening across the industry at the moment, and many other industries actually, for that matter. But what advice would you both give to companies who are maybe skeptical or just don't know where to start when it comes to adopting new technology such as yours?

Debbie Shakespeare
I'd say a few different things. I would say within within Avery we're not a fan of that, go big or go home. We say, you know, lean in. Do a pilot, get some learnings, you know, learn how to scale it. And I think the other thing is, you know, collaborate within industry groups. Within the apparel space, there are so many great industry groups, and I'm sure in the other industries as well, where people are really trying to get together and addressing what these big industry challenges are. There's a ton of learnings and a ton of support in that space. And I guess the last thing you know, if there was a call to action, it's no longer a nice thing to do. You know, this is the way companies need, need to survive. As consumers are getting more educated, they're going to make decisions based on what they know.

Jessica Owen
And Michael, I don't suppose you've got any advice as well. To add to that, maybe, I

Michael Hu
think Debbie summed it up great. You know, I just would emphasize the point on it's, it's a shift that is happening, and one that I think our customers need embrace if they're going to remain relevant with consumers. And to Debbie's point, you know, start crawl before you walk, before you run. So pilot way to get in and understand, you know, how to expand in a broader way and and then go from there. Okay,

Jessica Owen
well, guys, I think that's all we have time for today. But I mean, thank you both so much for joining me, and it's been really great to learn about a free Dennis and it's technologies, and I feel like even I've been enlightened as well. I feel like I really need to learn more about these types of technologies, because they do blow my mind a bit. But anyway, thank you very much. I really appreciate it. Thank you.

Michael Hu
Thanks for the time. Thank you, Jessica, thanks for having us.