Franchise Technology Solutions for Retail, Fast Casual, and Multi-location Companies

Paul Starkey:

Hi. Welcome to the Bluewave Technology Group webinar series. This series is designed to provide the latest trends, technologies, and how they may be able to help you solve your business challenges. Today we’re going to be focused on franchise and multi-location solutions. We’ve been very lucky to be able to have Johnathan Lloyd, Field CTO from CBTS, join us today. Hey John, how are you?

Jonathan Lloyd:

Good, Paul. Thank you. Excited to be here. Really excited about our partnership with Bluewave and for the opportunity to be on the webinar. Thank you.

Paul Starkey:

Yes, we very much view you as a strategic partner and we’re excited to be on this webinar together today. So John, right off the bat, tell us a little bit about yourself and about CBTS.

Jonathan Lloyd:

In my role here at CBTS, I’ve been here about 13 years. In our industry, there tends to be some gaps where we go very wide across organizations’ technology and business challenges. So CBTS, we deliver global security solutions, managed services, traditional networking, we deliver telecommunication services, professional services, and staffing. Together, all of these can start to feel disjointed when you work with organizations. So my role as field CTO is to help organizations stitch together what is your long-term cohesive strategy and where do you need help. I always tell organizations to think of CBTS as a puzzle piece. We’d love to do everything from A to Z soup to nuts, but that’s not realistic. You have your own in-house competencies; you have other partners that you trust and have done business with for years. And so CBTS’ flexibility to tailor solutions to the end customer and do business how and where you want to, is really a key differentiator for us in this managed services and managed security services space.

Paul Starkey:

Great answer. And it makes sense with all the different, to your point, like the puzzle analogy. There’s lots of pieces and certain things that just fit nicely, so great. Let’s dive in. So right off the bat, what trends are you seeing in franchise and multi-location solutions?

Jonathan Lloyd:

The first thing that comes to mind when you think franchise or multi-location is retail customer analytics. Understand, not only data, but how can we action that data? So we’re seeing a lot more around machine learning (ML), around internet of things (IoT), things like sensors, things like disposition to understand how the customer’s demeanor is when they enter our location first, when they leave. And what are our busy times? Is our staffing optimized to handle it? And so it’s really utilizing technology. In the past, even as recent as probably five years ago, technology was a cost center. We now are having these conversations with retail organizations, with franchise type organizations, where maybe marketing is involved, technology is involved because it’s all about how we utilize these as tools to unlock a better customer experience to streamline operations to be the most efficient that we can to make sure we’re spending every dollar appropriately. And so it is no longer that box that sits on the wall that the CFO doesn’t understand why they have to refresh every three or five years. It really is a driver into all of these different business lines within the multi-site environments.

Paul Starkey:

That makes sense because really in a way you’re optimizing, you’re strategically pushing the business forward. That makes a lot of good sense. So give me a good example of someone right now who’s benefiting from working with you in either franchise or multi location.

Jonathan Lloyd:

I’ll give you an example where I talked about the idea of streamlining operations. We work with a large nationwide food retailer and we utilize sensors. So we have sensors on their refrigeration units and we’re able to detect a change or drop, or in their case, an increase in temperature. And we’ve had refrigerators fail in the middle of the night and we’ve had store managers show up with dry ice and be able to get the inventory saved. While we’re working on it, they call their operations team to repair the unit rather than having food go to waste and spoil. That’s one example of how technology is more than just the old tech stack.

However, there still is that common use case. We have a retailer that we actually partnered with Bluewave on, and they’ve got some 3,000 sites across the US and Canada. Well, when you have a headache at one site, now you’re really multiplying that times 3,000. So the key there becomes standardization, uniformity, predictability. You still are going to need internet and a firewall and a backup internet because what happens if you go down and we’re going to need switching and we’re going to need access points.

The things that are maybe kind of more run rate and they aren’t as sexy or fun as some of the IOT and machine learning and AI things that are coming out, but there’s still that foundation that is required. Trying to do that one time can be a challenge, but times 3,000 and spread out across six different time zones and 3,000 miles, that’s a really big deal. And so we always say with CBTS, we are the people and process that allow you to make the progress that you’re looking for.

Paul Starkey:

No, that makes good sense. And to your point, just the scale and then to your point, I like the fact that there’s certain things that people are very enthralled about right now, but a sensor for a restaurant, your refrigerator is one of the most important things you have. Keeping food safe is very fundamental. So kind of along those lines, what are the biggest lessons CBTS has learned just with your experience in multi-location?

Jonathan Lloyd:

I think the big thing is there’s always this hypothetical, call it a sales or a total cost of ownership, type model where somebody says what is the cost of downtime, right? That’s always been the scare tactic of could you afford to be down in these sorts of environments? That’s a very measurable answer that almost 60% of the business has at their fingertips to be able to answer. And so we’ve really learned that. Lessons learned. One is to plan for the unplanned for. So we do things like:

• Offer four-hour guarantee of hardware on site and so we’ll use depoting to make sure hardware is within a four-hour drive
• We’ll build contingencies in place of what happens if the power goes out to that site. Well, if we don’t have power at that site, can we continue?
• We shift phone calls to the next closest location. Can we continue to take orders via a cloud base, like a Lambda in AWS and distribute that to a different store?

Those are the sorts of lessons learned. Minutes feel like hours and hours feel like days in an environment where you really are counting how many hamburgers sold or how many T-shirts sold per hour to justify your operational expense. That’s the biggest lesson is we are measuring things in dollars down to the minute and building contingencies to make sure we can keep you up and running.

Paul Starkey:

Which makes sense. It really puts you as a very holistic partner. You’re worried about the same things that your customers are, which is fantastic. What sort of data does CBTS provide to customers and what’s the impact of that data?

Jonathan Lloyd:

So let’s start with voice. We had a retail customer. They were an automotive shop, a couple hundred locations, and they were open until 8pm every night. And what we were able to determine was that there were no phone calls coming in after 6pm and all the customers that were coming in after 6pm were really just to pick up their vehicle. They had dropped it off, went to work, it got repaired, they paid online, and they’re just coming to pick up keys. And so that’s where we work with a drop box sort of idea where you have lockers, you get a passcode, a unique four-digit randomized code after you’ve paid your bill, the keys get put in there. And so by understanding their call flow data, understanding their foot count traffic, understanding dwell times, how long somebody stays in a store, and all of these we can collect via Bluetooth beacons, in their case call detail reporting, to be able to reduce their headcount hours and they started closing at 6:30pm. They saved an hour and a half X two employees X seven days a week X 200 locations.

So those are the sorts of things that really can become actionable utilizing the technology. And then a lot in retail is really around consumer data behavior. We work with a large grocery retailer and we can tell you how long somebody stands in front of the toothpaste and correlate that data with smart shelf technology to say, if you stand in front of the toothpaste aisle for 30 seconds or less, you tend to buy the top shelf product. If you spend more than 30 seconds to a minute and a half, you tend to buy from shelves two or three. And if you spend more than two minutes, you tend to buy from the bottom shelf, meaning you’re doing more research, you’re maybe looking at the labels, really comparing the price, the price per ounce, not just the price that’s on the tag. Really a more informed buyer. That allows them to not only understand their customer better, but to sell that space. Colgate Palmolive will pay more to be on the top shelf when they understand that data. The majority of people pick their toothpaste in under 15 seconds. That creates 90% buying off the top shelf. Those are the sorts of things that understanding consumer buying behavior that mean that’s king in a retail environment.

Paul Starkey:

Well, first of all, that’s fascinating. Just let me stop just that is amazing, the fact that that level of technology and how pragmatic it works for the business. How has AI Ops helped in multi-location space and what does CBTS do and unlock its full potential?

Jonathan Lloyd:

AI Ops, I use this analogy. In the 60s, if your car was making a noise, you took it to the mechanic and you said it’s making this clink clink clink noise. The mechanic then had to start trying, from years of experience, I know that it might be this, and let’s take this piece out, this part, look at it, see what’s going on. Maybe it’s not that part. Now these days, you get a check engine light, you go to AutoZone, it pulls the code. Now you take it to the mechanic, and you go, okay, this is the code, this is what’s wrong with my vehicle.

That’s the role of AI Ops. It’s helping us very quickly to understand, throughout my network, where an application starts performing poorly or why it’s performing poorly. What are the common denominators? But just like me knowing that I’ve got an O2 sensor bad on my car, doesn’t make me a mechanic. AI Ops doesn’t replace the need for an advisor like CBTS that’s helping manage that network 24x7x365. So I still want to give you back your nights and weekends. If I’m a network admin, AI Ops is great, but I still don’t want to get out of bed at 1am in the morning. Well, the CBTS network operation center is 24×7. Also years of experience. In the same way that you trust your mechanic to do that work, we’ve got over 250 engineers sitting in our NOC that are certified on these OEMs, that have years of experience of network engineering. So it helps us get to the root cause faster, but designing it correctly, implementing it, optimizing it, those are still years of experience of a trusted professional. So AI Ops reduces downtime. There’s certainly a benefit in getting to resolution faster, but it doesn’t replace the need for trusted advisors like CBTS.

Paul Starkey:

It also makes everyone more informed. I’ve had an O2 sensor go out before and it’s so nice to know what the problem is. That’s half the challenge. What is the role of IOT in these types of businesses and how is it enabled?

Jonathan Lloyd:

There’s so much that is becoming, whether it be automated inventory replenishing, that’s Internet of Things. The sensors that have to sit on the shelf to know when a product has been taken off. To then the supply chain. What happens? Do you borrow from another store? Do you auto replenish from a warehouse? Are you reading in real-time what your sales are? We know that we sell product X on average 80% more on Saturday mornings than we normally do. But this location across town, for whatever reason, they don’t. In that demographic, they don’t sell as much of that product on Saturday mornings. They tend to sell more on Sunday mornings. Okay, well let’s replenish the inventory immediately from that store and then use a warehouse to backfill. Those are the sorts of things that become critical in retail. I mentioned already IOT sensors for food retail, such as checking temperature of fryers, of refrigerators.

IOT around smart cameras. We work with one retailer that has set up smart cameras in their dining room. I would say it’s a casual dining, right? So you order at the counter, pick up at the counter and go and sit down in the dining room. And in that environment, if somebody were to spill a drink on the floor, the camera will pick up that there’s a spill and it will automatically send an email to that store distribution list. So it’s the on-call manager, it’s the store manager, assistant manager, and it’s alerting to them. So if you’ve got your folks preparing food on the line and you’ve got your manager doing back-office things, well now they get alerted there’s been a spill and they can go handle it themselves or direct somebody to move from the line.

These are the sorts of things IOT can do, but it requires always on connectivity, and it requires high bandwidth. And some of the things we’re starting to see is more robotics, which we’re already starting to see out in some fast-food chains. That robots are making hamburgers. Robots are bartending. These are the sorts of things that are going to require very low latency. And this is going to move into a world of edge compute stack, which is actually a great fit for retail or multi-location. We’re seeing organizations build small compute stack server in a store that’s running microservices, it’s running containers, it’s got a security layer, but it’s also serving as a controller for some of these IOT devices. And what that enables us to do is centralize the functions that make sense to be centralized. To move to the cloud, the functions that need to be elastic. But to optimize spend and cost savings with things like domain services, point of sale, things that you want to be able to operate in an offline mode right there in the store. And so we’re really turning these stores into, call it small compute hubs, and it’s having a huge impact on how they do business.

Paul Starkey:

That’s brilliant. And also to your point with the edge, you’re literally taking that compute to them, which is brilliant. What is the security formula for success and how is CBTS enabling that?

Jonathan Lloyd:

This is a unique vertical, more so than any other for a lot of reasons. Let’s start with franchises. Depending on the organization, franchise agreement may not give you control. You may be able to make recommendations, but you may not be able to dictate what the franchisee does. That’s a big deal because as we know, there’s a kind of a funny meme that says, my security budget before an attack and then my security budget after. Everybody’s willing to spend to be reactive. Nobody spends to be proactive. The financial status of a single franchise owner versus corporate could be very different. And so if you can’t dictate what their security posture is. The second piece is the biggest weakness in any organization, regardless of vertical, is you and me, right? It’s the end user. I talk about this all the time. Every employee is a firewall.

No matter how many safeguards you have in place, if you let somebody piggyback into the building or you write your passwords down on a sticky note and leave it on your laptop when you walk away, or you click the link that your buddy sends you because it’s in Gmail, even though it’s on your work PC. Those are the sorts of things you can’t really protect against.

What makes that challenging is typically in a multi-site, franchise retail environment is you have a lot of higher turnover rates, seasonal rates. You have part-time employees that maybe don’t have the same ability to go through the same trainings, annual audits, those sorts of trainings, the “know before” type things. And so the formula and where CBTS comes in is first to break down and understand what is your attack surface. So we call it attack surface management, understanding what is vulnerable.

Obviously in retail you get a lot of customer data, so obviously you have PCI and PCI DS3 and PCI DS4 just came out. Constantly evolving, constantly changing. So CBTS can help make sure you are meeting compliancy. Through audits, those sorts of things also can help break down. You’ve got all these credit card numbers, so guess what? People want to hack you. People want what you have stored. So how do we protect the store? How do you protect that point of sale? What are your traditional security approaches around intrusion detection and prevention, data loss prevention? Think of your traditional firewalling, but then we must get down to the human beings and the people, and that’s where we talk about the idea of zero trust network access or least privilege access management, identity and access management.

A lot of organizations are moving to identity access management, privilege access management, identity access governance, this whole package. Think of your ForgeRocks, Savients, Oktas, those sorts of companies. But again, in a retail store, that becomes very, very expensive for me to deploy to all of my employees because I have so many employees that maybe aren’t sitting at a computer. And so it’s about building the security posture, not just around the person, but also around the device and also around the application. And that’s kind of that zero trust that we look for the identity of the person, the identity of the device, the identity of the application, and building a security posture around that. So this is obviously not something as simple as put a firewall at each store anymore. You’re going to need the help of an advisor like CBTS.

Paul Starkey:

To expand on that, how do you see corporate organizations influencing the franchise technology when to your point, they may not have the authority to dictate it?

Jonathan Lloyd:

It’s around incentivizing. So we work with a lot of franchises where they can’t dictate what the franchisee does. However they incentivize them. One thing is just a brand new stack of technology. Maybe it’s enabling something new. Today we don’t have guest Wi-Fi, but if you consume this CBTS package, you’ll be able to have guest Wi-Fi. And that will be a significant difference for your customers and hopefully for your bottom line.

We’ve seen new order boards. Hey, we’re moving to digital ordering boards. You don’t have to go out and change them weekly or when new signage comes up. You can even do dynamic pricing. That’s something that we’ve seen. So we work with one fast food chain where their franchisees after 8pm at night will reduce the price of the product. Rather than spoiling and throwing it away at the end of the night, they try to get something up and off after their dinner rush.

So those sorts of things, but to enable that, you need to have wireless that covers your drive-through. And so again, we can’t force you to buy this CBTS stack, but if you do, we’re going to deliver these smart order boards for you. We’re going to deliver guest Wi-Fi. We’re going to deliver tablets that allow your employees to walk around the store. So things that make your quality of life or your experience at work or your customer experience better, we tend to see them incentivize. And for corporate, you want that standardization. That’s why you incentivize. You want to know that because when your company’s name shows up in the news for a data breach, nobody says, well, but hold on, that wasn’t Acme. Paul is the franchisee. That’s what happened, right? It’s your name and you want to protect it.

And so you partner with CBTS or Bluewave brings us in as the trusted advisor, and we build this great solution stack. And then you might have 500 franchisees who say, I’m not going to invest in that. That’s a really big problem. And so it’s about incentivizing why. And we build programs with some of our end customers where we will go to their franchise fairs or whatever their big show is at the convention center, and we’ll set up a booth there and we’ll talk about our offering and what it’s done for corporate and other franchisees. And we’ll build marketing campaigns together. So it really is a targeted approach to get to that standardization.

Paul Starkey:

Yes, that’s genius because to your point, everybody wins. Sometimes you must make a case for what the winning is going to be. So what is the importance of voice omnichannel and AI in retail or franchise organization?

Jonathan Lloyd:

I hear a lot of voice is dead. Everybody uses their cell phones. But the first thing is money is green. I don’t care what generational demographic it’s coming from, and I need to be able to serve anything from Gen Z to baby boomers and everything in between millennials and Gen X and all that fun stuff. So for those people who do want to pick up the phone and call and see what my store hours are that’s important. Or maybe they’re driving and don’t have access to a computer, but they want to see if their order’s ready because they did a pickup in-store. Well, I can call and put in my phone number into the automated system and get a status to see if my order’s ready to be picked up so you don’t drive to the store too early.

There’s a lot of ways that people engage retailers with voice. A lot of times too, it will be under special circumstances. I want to know if you’re open because we had a bad snowstorm. Well, Google’s not going to tell me that. I want to know if you’re open on MLK Jr. Day. Well, some might be. Some might not be. I think typically shopping malls you have to be, whereas Christmas Day or New Year’s Day, it’s closed and observed for everybody. So there’s a lot of things that are going to drive real-time information that would still go to voice as opposed to the internet. However, I want to be able to have that 360 journey. If I am calling into the store because I placed an order online, I don’t want that to be a separate system where they say, oh, you need to call customer support.

Try this with any cell phone provider. Call their customer care line, buy a phone on their website, upgrade your phone on their website, and walk into a store. Those are three separate companies you’re talking to and they all operate with different quotas and different goals. That’s a very poor customer experience. And so the idea of omnichannel, I can purchase in store, I can purchase online, I can call you, I can do your chat. Whether it’s AI on the front end and I eventually get to a person on the backend, I want to be able to have this seamless experience where you know me as a customer regardless of how I’m doing business with you. And that’s really the role for omnichannel and voice in retail.

Paul Starkey:

No, I love that. The different personas, the different groups, everybody just wants to get good service. And the technology can facilitate that.

Well, John, this was incredible information. I feel more educated just about the different things we should be considering and can benefit from CBTS, especially with the franchise and multi-location solutions. Thank you so much for being a part of this today with me. I appreciate it.

Jonathan Lloyd:

Absolutely. We really value the partnership with Bluewave, and I hope it is evident. There’s a lot of our competitors, there’s a lot of smart folks out there. We know what bits and bytes are. We know how to build a route, tag a VLAN, etc. That’s not what CBTS brings to the table. It’s not just our networking capabilities, our security capabilities. It’s our experience in this multi-site retail franchise model, really understanding what those business outcomes are that you’re looking for. We just then bring the right technology to enable it. But it’s more than just bits and bytes. It really is understanding your business.

Paul Starkey:

Absolutely. I can see how your partners are benefiting from the holistic view and the pragmatic approaches that you have across the board. Awesome. Well, thank you so much. Have a great day.