Thinking Differently: New

Approaches to Food Retail

Operational Challenges

E360 Forum • Houston, TX • October 25, 2018

Mike Roberts

Director of Partnerships and Corporate Development

ServiceChannel

Ed McKiernan

President, Cold Chain, Electronics & Solutions

Emerson

Discussion Outline

2

• Technology Change and Food Retail Competitive Dynamics

• The Evolving Store: Convergence of Facility, Mechanical, Electronics and

Software Systems

• The Evolving Supply Chain: Safety, Speed and Selection

• Maintaining It All: If These Things Could Talk…

• Bringing It All Together: Optimizing My Operation AND Cash Flow

Technology Change and Food Retail Competitive Dynamics

Grocery Expand Across Store Formats… …And Supermarkets Lose Foot Traffic

Shoppers using supermarkets as

their primary store:

2005: 67%

▼

2017: 47%

-20%

https://www.fmi.org/docs/default-source/webinars/trends-2017-webinar-7-18-2017.pdf

Lost to organic, discount and specialties

3

https://www.wsj.com/articles/supermarkets-face-a-growing-problem-too-much-space-1501498802

Space for grocery in supermarkets

0

1

2

3

4

Space for grocery in

all store formats

Sq. ft.

per

capita

1950 2020

Technology Change and Food Retail Competitive Dynamics (cont’d.)

Online Grocery Sales Take Off… …And Go Mobile

18 million adults will use groceryapps at least monthly in 2018,

Online grocery sales to hit $100B by 2022

a 50% increase

from 2017

https://www.fmi.org/digital-shopperSource: eMarketer https://www.supermarketnews.com/online-retail/grocery-apps-upswing

Amazon food and beverage sales projected

to surpass $30 billion

in 2025

4

Technology Change and Food Retail Competitive Dynamics (cont’d.)

5

Regulations for Safety, Efficiency and Cost… …While Technician Shortages Drive Cost

The average U.S. company spends the equivalentof 21% of payroll costs on regulatory compliance

2012 2022

Projected gap of 115,000 workers

Talent gap:115k people

Technology Change and Food Retail Competitive Dynamics (cont’d.)

6

Retail Stores Automating in Countless Ways

Walmart Uses Blockchain

for Food-Safety Tracking

How Robots and Drones Will

Change Retail Forever

Kroger Plans to

Introduce Driverless

Groceries

Takeoff Technologies

Launches World’s First

Robotic Supermarket

Target Automating Cash

Counting at StoresAmazon Considering Opening 3,000 Cashierless GO Stores, Report Says

ALDI and Grocery Competitors

Poised for Online-Offline

EvolutionCould Robots and AI Make

Delivery Affordable for Stores?

The Evolving Store: Convergence of Facility, Mechanical,

Electronics and Software Systems

Controls, connectivity and cloud solutions are unifying store operations, reducing complexity and cost.

Plumbing

Lighting

Janitorial

Grounds

Electrical

Waste

Cooking

POS

HVAC

Refrigeration

Delivery

Fire

Yesterday:

Isolated Systems

Tomorrow:

Unified Systems

All Systems

7

Automation

+

MaximizeUptime

+

MinimizeLoss

+

Visibility and Reliability

The Evolving Store: A Day in the Life of a Connected Store

Alarm

Notify

Dispatch

Repair

Invoice

Report

Fe

ed

ba

ck

Store Manager ConsumerTechnician

Diagnostic

Intelligence

+

Knowledge

Base

+

Efficiency

Good Customer

Experience

+

Quality Product

+

Positive Brand

Perception

8

The Evolving Supply Chain: Safety, Transparency and Traceability

9

Controls, connectivity and cloud solutions are unifying supply chain operations,

providing retailers visibility back to the producers.

Yesterday: Isolated Supply Chain Segments

Tomorrow: Unified Supply Chain Solutions

Maintaining It All: If These Things Could Talk…

10

Unified store operations + unified supply chain =

total visibility and reliability

All SystemsAll SystemsAll SystemsAll SystemsAll Systems

Bringing It All Together: Optimizing My Operation AND Cash Flow

Total visibility + flexible business model =

choice in how to invest for your operation and customers

Own Lease

Capital Expense

Operating Expense

BusinessModelZone

11

Questions?

DISCLAIMER

Although all statements and information contained herein are believed to be accurate and reliable, they are presented without guarantee or warranty of any kind, expressed or

implied. Information provided herein does not relieve the user from the responsibility of carrying out its own tests and experiments, and the user assumes all risks and liability for

use of the information and results obtained. Statements or suggestions concerning the use of materials and processes are made without representation or warranty that any such

use is free of patent infringement and are not recommendations to infringe on any patents. The user should not assume that all toxicity data and safety measures are indicated

herein or that other measures may not be required.

Thank You!

12