Mike Robinson: 0:03

So I just knew that I was constantly buying, but I also knew that, everything that I ended up opening, it was like, great, that's what I wanted. And there was a purpose behind that. But I didn't feel good about the fact that five days a week that there was a truck stopping at my house. And, and at some point it was, is there a way that it could have stopped once or twice given me the same amount of packages, just in a more coordinated and synchronized manner

Tom Raftery: 0:26

Good morning, good afternoon, or good evening, wherever you are in the world. This is the Digital Supply Chain podcast, the number one podcast focusing on the digitization of supply chain, and I'm your host, Tom Raftery. Hi, everyone and welcome to episode 309 of the digital supply chain podcast. My name is Tom Raftery, and I am excited to be here with you today. Sharing the latest insights and trends in supply chain. Before we kick off today's show. I just want to take a quick moment to express my sincere gratitude to all of this podcasts amazing supporters. Your support has been instrumental in keeping the podcast going. And I'm truly grateful for each and every one of you. If you're not already a supporter. I'd like to encourage you to consider joining our community of like-minded individuals who are passionate about supply chain. Supporting this podcast is easy and affordable with options starting as low as just three euros or $3 a month, which is less than the cost of a cup of coffee, but your support could make a huge difference in keeping this show going strong. To become a supporter, simply click on the support link in the show notes of this or any episode. Or visit tiny url.com/d S C pod. Now, without further ado. I'd like to introduce my special guest today. Mike, Mike, welcome to the podcast, which would like to introduce yourself.

Mike Robinson: 1:55

Sure. Thanks Tom, and I'm really happy to be here. Let me give you just a little bit of background on who I am and, and, and the angle that I taped the conversation that we're going to have today. You know, most of my career has been in retail, but I, but I describe myself as an accidental retailer. I didn't plan on going into it on purpose, right? I had come out of school in corporate finance, I went into consulting to do high tech biotech, and then I stumbled across this thing called retail and realized it, it captured my imagination of, of, of what it meant to build great customer experiences and figure out how to help people understand both what they need and want, but get what they both need and want. And that accidental retailer, you know, conversation turned into a career of 25 years. Both from a consulting and an operator standpoint, where, uh, consulting with a smaller boutique firm here in San Francisco, then with Pricewaterhouse Coopers, then with IBM Consulting, and then with industry, leaders like the Gap. And then, uh, probably the pinnacle of my retail career where I led the digital channel at Macy's and helped grow that channel from about 700 million to about 7 billion over the eight years that I was there. I'm in phase two of my career at this point where I've kind of moved from being this accidental retailer to being more of a reformed and informed retail perspective. I understand that, you know, people still need things, but, are there ways of getting them the things or developing the things or manufacturing the things that they need in a more sustainable manner? And that's really kind of the push that I have right now, which is really trying to take a look at, you know, the retail, question through the sustainability lens and see if we can find better ways of doing things.

Tom Raftery: 3:33

In. Interesting. And what, was your, uh, road to Damascus moment, Mike? What, what was it that suddenly hit you, like a bolt of lightning and said, we need to be more sustainable?

Mike Robinson: 3:45

It's, it's a great question and it really comes down to kind of the problem that, that we're trying to solve at The Eighth Notch was I just started realizing that there was this constant flurry of boxes coming at me. And I honestly didn't know what they were. Right. That, you know, they, I, I would get a box and not know what it was and didn't know if I was supposed to be getting something, didn't know what I was doing. So I just knew that I was constantly buying, but I also knew that, everything that I ended up opening, it was like, great, that's what I wanted. And there was a purpose behind that, but I didn't feel good about the fact that five days a week that there was a truck stopping at my house. And, and at some point it was, is there a way that it could have stopped once or twice given me the same amount of packages, just in a more coordinated and synchronized manner. That really was what it was. And, and I think, you know, as we've gone through the pandemic, I gotta believe others have felt that as well as we all sat at home having everything brought to us. Yeah. And at some point that just becomes, has to feel unsustainable.

Tom Raftery: 4:43

Yeah. Yeah. I mean, I had three trucks stop outside the house here yesterday with three separate deliveries, so I, I know exactly what you're talking about. Yeah, yeah, yeah. Now you mentioned, uh, in passing there, The Eighth Notch. What's that?

Mike Robinson: 4:58

Right? Yeah. That, that is the, um, what started out, I think as a passion project more than anything else has become my primary focus. It's a startup that a friend of mine founded. He asked me to join him as a founding member back in 2019. and it was really around this very, very simple question of, you know, are, are we having too many delivery trucks coming down our road every single day? And is there a way that we could minimize the number of times that a truck stops at your house, right? Instead of three trucks stopping at your house, one truck stops, or instead of trucks stopping five days a week at my house, they stop twice. And to figure out is there a way to synchronize further upstream the ability to ensure that in that final mile delivery component packages are ending up in the back of the truck at the same time, and on your doorstep at the same time. And that's really been the focus of it. Um, we are, you know, a, a, a relatively, you know, even though we started in 2019, it's been about building the technology and proofing the technology and building a partnership, network at ecosystem. And now we're going to market very aggressively.

Tom Raftery: 6:06

Okay. And The Eighth Notch. Where does the name come from? I mean, I know there's a, an old silent Western movie called the Eighth Notch, but I'm guessing that's not what it's related to.

Mike Robinson: 6:18

It's not, and it's not the Burger Restaurant in Los Angeles. Well, which is the first domain name that we ran into. Um, it's a real good origin story, right? And, and, and, and there's charm to it. Uh, the founder, Jamie Sapp, his dad was a railroad man. And, and the eighth notch is the most powerful, most efficient setting on a locomotive. So when you can figure out how to get the locomotive into its most powerful setting, it becomes the most efficient part of the machine. So it's a bit of an homage to his dad, and it who, Jamie, you know, considers his greatest role model in life. But, it's also about there are things that we, you know, take for granted that they just work, but there's always more efficiency that can be, uh, driven out of it. And I think that's what we're thinking about as we think about the package delivery network.

Tom Raftery: 7:08

Okay. So how do you do that? How do you consolidate those shipments so that you only get one for me yesterday instead of those three or one instead of the five for you or however it goes?

Mike Robinson: 7:23

Sure, sure. And. And this is where anytime that we talk about it the first time with someone that they think we're doing this physically, this is a virtual merch. Right? Right. This is about understanding the math associated with where packages are in the, in, in the network. So I'll give you a perfect example. Our job is we take, order data off of a customer's e-commerce system. It's been, it's been validated, it's gone through its fraud checks. They've identified where it's going to ship from, right. That from is very important. We know where it's going to ship to because of the address and the transit time in the carrier that we have a, a relationship with that the retailer needs to have the relationship with as well is very predictable. It's like 98 to 99% predictable unless there's massive, uh, challenges in the weather or something of that nature. So that time in transit is a very, stable number. So I know that you just ordered something from, a retailer that's gonna take three days to get to you. I, I can look into that carrier's network and see if there's anything else on its way to you already. And if there is, I can time when the new item that you just order goes into the network to be able to match up to that one that's already en transit, there's something coming to you from if, if you were in the East coast, if, if, if you were in the US you live in the middle of the country, you have something coming from the east coast and you're having something coming from St. Louis, obviously the one coming from the east coast has a longer transit time than the one coming from St. Louis. But we can synchronize that based on when we choose to put it into the network. So the change here is, and the change in behavior is we're asking the retailer to schedule some of their shipments. We're not asking them to do effectively, which is as soon as I get it, prepare it and ship it out. We're asking them to sh ship it based on a schedule that allows them to take advantage of the transit time to be able to connect to another package, and both are delivered at the same time. That's option A. Option B is you as a consumer buy multiple things from the same retailer, but they have a disparate inventory. And they've got inventory in, in multiple locations where they're using stores or different DCs. Nobody's really figured out, you know, how to get inventory into the right place 100% of the time. So in many cases they put inventory everywhere, to try and answer the question. But that may mean, and, and I use this example a lot. I used to work for Macy's and maybe a little bit of my Damascus was this example as well, I ordered five white t-shirts from Macy's. They were shipped to me from four locations, four locations delivered on three different days, right? That, oh my God, a simple, basic item, but just because of the broken inventory nature, right? They then sourced it from the ones that made the most sense in order to get it to me the fastest, right? But it meant that they ended up sending me, four boxes over three days. And you talk about a potential costumer experience nightmare, right? You know, I ordered five. Why did I get one? Wait, I got two more. Where are the other three? Oh, they came the next day. What we would do in that situation is I'm not asking you to change how you do your inventory. You still have those five white t-shirts in four locations. I'm just gonna tell you when to ship them. So all three of those boxes will show up at Mike Robinson's house on the same day instead of over three days. And, and that's the split shipment scenario that we enable as well. And, and again, I think retailers have been conditioned to believe, I get an order, I gotta ship it out as quickly as possible. And there's this notion of surprise and delight that Mike was surprised and delighted that he got one T-shirt. I can tell you Mike was not surprised and delighted that he got one T-shirt. He wondered where the heck, what were the other four that he paid for? Uh, I, right, right, right. It was like, are the other four coming? And I think this happens all the time. I think this, you know, this over conditioning that the retail industry has gotten into that speed is the most important thing versus some level of coordination. And ultimately, you know, our goal is to get up into checkout cuz we do this in a post checkout world right now. But to get up into checkout and actually allow the consumer to vote and choose that, that they would say yes, find a way to ensure that all things, it's the things that you see on Amazon right now. Would you like all of your items delivered on the same day? They're asking the same question. We know they're doing this, right? What we're trying to do is bring that capability to the rest of the retail industry.

Tom Raftery: 11:51

Nice. Nice. And as you were explaining it, the thought was occurring to me, what's in it for the retailer? But of course, I'm guessing it's if they had, if they sent five T-shirts in three deliveries, If they consolidated them and put them in one delivery, that's saving the cost of two deliveries. So is that the incentive for the, the, the retailer is the fact that they're cutting down, they're cutting their delivery costs by whatever it is,

Mike Robinson: 12:19

It's a little bit different, right? It, it's a, it's, it's, it, it's effectively, they still have the same outbound cost, but because they're willing to cooperate with the carrier, the carrier now has the efficiency on it. Right. Because when the driver stops at my house, Instead of three times, those are two stops that he know and, and that's how they measure efficiency. How many stops does a driver have to do? How many stops are necessary on a route? How many routes are necessary to deliver the full volume? If we can minimize the number of stops, we can start to compress routes and ultimately in some cases, maybe eliminate routes. And when you eliminate routes, you eliminate trucks. So the value creation is at that moment where both of those deliveries are happening at the same. The carrier has it. Well, we were able to negotiate with the carrier and I can't tell you who it is unfortunately. But you could flip a coin and you'd be wrong half the time and right half the time if you have one. And it's US based. We negotiated with them. You have this large operational savings that happens every time that a driver doesn't need to stop, get out of his truck, take something up to the door, come back, start his truck up and move forward. Would you be willing to share that? And the answer was yes, And so what happens is every time that, that the retailer cooperates and ships on that date, that we tell them they get an incentive or they get some value creation from the carrier as part of their, uh, contract. It could be a lower cost of shipping, right? It could be a rebate, it might be strategic allocation at, at, at holiday, but it changes the nature of the dialogue that the carrier and the retailer are having because it becomes more strategic now. Cuz in the past it's been carrier saying, I'm sending everything. I'm charging my customer nothing. You need to make your cost as low as possible, and yet I need it faster. We're we're trying to blow that conversation up and say, what's, what, what's a better way of doing, doing it? And if you're willing to, and if you have operational savings, can you share that throughout? So it's a three-way gain share. Um, obviously the carrier wins, right? Because they have an operational saving, they're willing to share that in some way, shape or form with the retailer as well by the change behavior and they share it with us as well in terms of we created the change behavior.

Tom Raftery: 14:32

Okay. Okay. There is this other party involved in that, and that's the customer.

Mike Robinson: 14:40

Yeah.

Tom Raftery: 14:41

So, How do we know that this is what customers want? Is it what they want? Is it a question of educating them so that they decide this is what they want, or that they actually had that choice in the first place? You know, there's a whole kind of spectrum there as well that you need to try and fill.

Mike Robinson: 14:59

Yeah. Yeah. Tom, Tom and I appreciate these questions because these are exactly the questions that we get every time that we talk to a retailer about this, right? And what we, what, what we said at the very outset was if you make a promise to your customer of when that product is going to be there, we will never violate that. Right? So if you said, you know, if you buy today, it'll be there within the next five days. That's the window that we're working with, right. Now what happens is most retailers tend to try and get it there in the early part, in the surprise and delight, but we're saying take advantage of all the time and, create additional value to you and start to reduce your costs. And we'll talk sustainability at some point as well. But create a much more predictable, delivery component because we also give you a date that you could then share with the customer and be able to, in your ship confirmation, it will be there on Wednesday. Now, what's happening on the consumer side. Our, thesis has always been is that consumers are moving in this direction, that they have their Damascus moment, right? That they each have it, or a large part of them have it. And that once they, and, and again, we're doing this in, a post checkout world, after all the decisions have been made, we believe there's a scenario and we've talked to some retailers about just putting a different option at checkout that says, you know, here's a green checkout. Or here's a more sustainable shipping option. Give us a little bit more time. We'll do our best to find the most sustainable option and see what happens. Now, there's a body of study that's come up on this. We were talking about doing our own market research, but started to dig in and saying there are other people that are thinking along this lines, and I'll throw a couple stats at you if it's okay. Cool. you know, just about two thirds of the people that were surveyed in this one survey said that they're considering what the retailer offers from an eco-friendly perspective as part of their purchase decision. And that could be a broad gamut. That could be product, that could be packaging, that could be, you know, shipping. Right. When they dug in a little bit further, they found out that, you know, 91% of this customer said, said, if you gave me an eco-friendly option at checkout, I would, I would choose it right? Then they broke it down and said, which, which metric drove them? If it was, I had to pay more right? In, in terms of like the carbon offset that you see in, in, in most cases, you know, I, I mean it, it dropped to 57%, right? But then they said, if you just say, if you take a little bit more time and I'm willing to wait one or two days longer, it jumped to 84%. So I think we're seeing a shift where, where, where people are saying, and I, you know, and I use this analogy, I think we all have just this wall of boxes coming at us. Right, right. That sometimes we don't quite know. And so if we can make better choices as we go through the purchase, you know, conversation, I think all of us are gonna feel a little bit better. I think in this case as well, if there was predictability around it as well, in terms of you could give me a date when it's going to be delivered, I would feel even better. So, so I think we're seeing a shift in, in, and it's bifurcating on, on, uh, generations as well. Right. And I mean, I think you've got people like myself probably, you know, hopefully waking up right to it. And, and, and you've got, and, and you've got the next generation of consumers in their teens and twenties who are starting to demand it.

Tom Raftery: 18:17

Yeah. Yeah. How do you measure the sustainability wins from something like this?

Mike Robinson: 18:57

Yeah, and that's one, one of the beauties of, uh, the partnership that we have with the carrier that I cannot mention. Um, They've done the industrial engineering work to understand what the CO2 impact is of a stop and a 768. Yeah. You know, it's, it's approximately 768 grams of co2. Right. And so, you know, you know, you look at that and, and you start to, to multiply that across the 6 billion packages that are delivered in the US on an annual basis. And you start to understand it's pretty large, right? I mean, Hmm. W we've got, um, you know, a pretty, uh, I, I, I would, I would like to say aggressive, but I think it's light, uh, trying to affect a hundred million packages as our sustainability goal. And that ends up being 16,000 metric tons of carbon never created. It's different than offset. It's just never created. And I think that's the beauty of this is that when we're, we're not asking for a lot of change in order to get a lot change.

Tom Raftery: 20:04

Okay. It will take a certain amount of educating the market though, won't it?

Mike Robinson: 20:12

It it, it does. And this has been one of the, I I mean, I think the beauty of where we've started in the post checkout world is you don't have to involve the customer because you said it'd be there in five days. We're gonna get it there in 5 days. Now it's up to the retailer to say, I'm willing to think about my operations a little bit different. And we're not talking about every package. We have somewhere between, and we've done 50 to 60 simulations with retailers, taking their data, putting it on our platform, running it through as if it was live, to understand what the opportunity looks like. And it ranges between 10 and 20% of the time that there's another package that they could marry their package to, whether it's their own or whether it's someone elses. And, and, and, and that portion just, you know, it, it's just started starting to talk about offsetting from a scheduling perspective. I move a package a day, I move a package a day, I move a package a day. I think it's breaking through the addiction of speed more than anything else. Right, right. You know, you know, fast and free has been the mantra for far too long. We know it's not free. Right. And, and, and the, and, and the fallacy of fast, you know, is it, it is a tough one because all it does is just, it just creates more problems than it solves. But yes, education is absolutely, and the, honestly, Tom, that's why I'm here, right? I we're, we are trying to, you know, get this message out because we want people to, because I think it takes one or two times hearing it before it starts to sink in, and go it's not a massive change that I need to make. I get significant value associated with it, and I'm doing something better for the planet as well. Mm-hmm.

Tom Raftery: 21:49

Yeah, and I think, I mean, just personal opinion, I, I think if I'm on a site buying something and it tells me you'll get it on Day X, you know, whether that's the next day, or whether it's 3, 4, 5 days time. As long as I have the actual day it's coming on and it comes on that day, I'm fine. You know, unless it's something I absolutely have to have the next day, which is very rarely the case. It's more, I think, frustrations in these kind of scenarios. Frustrations arise when you have a lack of information. It's coming in the next X days. Yeah. That's annoying. It's coming next Friday. Okay. That's cool.

Mike Robinson: 22:34

Yeah. Yeah. And, and honestly, we, we offered that back to the retailer. If they want to ingest and communicate it, they have it. Right. I mean, I think that's one of the, you know, that one of the smaller externalities of what we're doing that may have an outsized impact in terms of what it is because it's, it's, you know, you know, it's the, it, it. I guess the other part is that, you know, I ran digital businesses and I never really spent a lot of time thinking about fulfillment, right? Cause I was focused more on growth, right? As you know, driving traffic, driving conversion, somebody else gets the product out the door, right? Mm-hmm. And I never really thought about the customer experience component of that as well until I really started thinking about it through my own lens. The 5 4 3 conversation I had around the white t-shirts and the maddening component of that. Predictability is super important. Control, I think is something that will be important as well. And I think that will be, I think we're just at the beginning of the tipping point of reinventing e-commerce fulfillment to allow the consumer to have 100% control and 100% visibility into the information as well. But it means the carrier and the retailer have to cooperate and corroborate in ways they've never done before.

Tom Raftery: 23:50

And you are saying retailer in the singular. What if there are multiple retailers? Is that, can you scale it out beyond just a single retailer so that if I'm ordering from multiple retailers that they're all kind of, they all come together in a single delivery again?

Mike Robinson: 24:07

It's, it, it's all based on That's more challenging. Yeah. But, but, but it's all based on your address. I mean, if they're on our platform, we're trying to figure out how to get as many packages on the same day to your address as possible. I mean, that's, but that's the other thing is we sort of turned this inside out. The address becomes the focal point and we're, and we're looking upstream to figure out are there other, are there spokes on that wheel that we can figure out how they all get there at the same time? I mean, I would, I would love to have a situation where, you know, your delivery guy only has to drive down your street once, once a week. Hmm. Right. Because always doing is delivering everything from that week to you. Right. I mean, it's kind of the way it used to be done. Right. We've only chosen to, you know, to try and do this in fast and do it in a non synchronized, non coordinated way. We're gonna be the synchronizer and we're gonna be the coordinator.

Tom Raftery: 24:56

Mm-hmm. Less trucks on the road. Sounds like a good thing to me.

Mike Robinson: 25:01

I'm all for it. Right, right. I, I mean, uh, I think, you know, I, I mean, I live in an urban setting here in San Francisco and just the sheer number of deliveries that happen across all the delivery services, there's far too much traffic on the road. And, you know, look, I, I mean, can I, can, can I dream and think about that this is a component of smarter cities, maybe. Right. There's no reason why it couldn't be.

Tom Raftery: 25:23

Yeah. Yeah, yeah. Cool. We're coming towards the end of the podcast now, Mike, is there any question that I haven't asked that you wish I had, or any aspect of this we haven't touched on that you think it's important for people to think about?

Mike Robinson: 25:37

Yeah, I, I, I mean, I'd like to go back and just maybe hit on the sustainability piece as well. Just, just a little bit harder. Harder, because I think that is, you know, I came into this again through the lens of the retailer and going, oh, if I can get operational savings, what else could I do with that? Then all of a sudden, my, my aperture opened up and said that there's this massive, sustainability component that we've convinced this, this carrier to share, right. That they're willing to share it that they can report it. Their other retailers who participate in this program can report it. We can report it, right. So as everybody is thinking through their ESG component, how they actually get to that environmental thing as we determine the metrics associated with this. This is a hard metric, right? Because it's avoidance, it's not offset, right? I'm not buying offsets like you are asked by the airlines. You know, they're kicking a couple of bucks to offset the the price of fuel. This is truly, truly avoidance and I think that is one of the unlocks that we keep pushing for. And every once in a while that we run into a retailer that says, yeah, those operational savings, that's important. That's sustainability thing. That's the thing that intrigues me,

Tom Raftery: 26:46

Nice. Nice, cool. Brilliant. Mike, if people would like to know more about yourself or any of the things we discussed on the podcast today, where would you have me direct them?

Mike Robinson: 26:57

Yeah, I would, I would have them, go to our website, which is, dub dub dub dot, T8 notch, n o t c h dot com. There's plenty of information there around what we do. We'll be adding case studies as we go live with our first set of retailers in the next couple of months. You can reach out to me at LinkedIn. I'm the Mike Robinson in San Francisco. And you know, the eighth notch banner is out there as much as you want. Um, we have shied away from Twitter. We will be on Twitter at some point in the in, in the near. Um, um, I'm a Twitter lurker right now, but I will be a Twitter business user at some point in the future. But I would suggest g go to our website. There's plenty of information and an information link. If you want to contact us, go to LinkedIn and, ping me there as well.

Tom Raftery: 27:44

Cool. And I'll put those links in the show notes as well so everyone has access to them. Great. Mike, that's been really interesting. Thanks a million for coming on the podcast today.

Mike Robinson: 27:53

Oh, I appreciate it. Thank you Tom.

Tom Raftery: 27:55

Okay, we've come to the end of the show. Thanks everyone for listening. If you'd like to know more about digital supply chains, simply drop me an email to TomRaftery@outlook.com If you like the show, please don't forget to click Follow on it in your podcast application of choice to be sure to get new episodes as soon as they're published Also, please don't forget to rate and review the podcast. It really does help new people to find a show. Thanks, catch you all next time.