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The Circular Economy: How Avery Dennison is Closing the Gap Between The Physical and Digital World with Max Winograd, VP of Connected Products

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Efficiency, transparency, trust. These are all things that both businesses and consumers crave, but don’t always achieve. Especially not all with one solution. But thanks to digital identities, and the technology that’s coming out of Avery Dennison, that’s about to change. 

Avery Dennison, a Fortune 500 global materials science company, is taking digital identities past the point of simple QR codes and RFID tags, and into a place where brands and consumers will be able to do more with individual products than ever before. We’re talking about a world where you can track the tiniest details of a product in shipment, like its exact origins to its temperature. And brands will have the ability to create more sustainable, reusable products that can learn from consumers each time they use and scan the digital identifiers, making it possible to adapt to changing consumer behavior in real time. To learn more about this new circular economy, I invited Max Winograd to the show, who serves as the VP of Connected Products at Avery Dennison and one of the founders of atma.io. On this episode of Up Next in Commerce, Max and I talked about all the ways that digital identities are already being used today, and what the future holds in terms of the connected experience that digital identities provide for brands and consumers. There are so many possibilities and upsides to the technology that Max and his team are creating at Avery Dennison, so keep your ears perked up for this awesome conversation! 

Main Takeaways:

  • Individual Focus: Investments in innovative technology is helping make possible a future that will see consumers more in control of and informed about individual product journeys. Rather than simply tracking an item from the manufacturer to its final destination, consumers can get all the microdetails of a product. So whether you are expecting a shipment of produce or medical supplies and vaccines, Bluetooth, RFID, and other digital identity technology will make it possible to keep an eye on all of the minuscule details, like the temperature of the truck the product is being shipped in.
  • So Long, Single-Use: How we package products is likely to undergo a fundamental change over the next few years. Rather than single-use anything, consumers will be encouraged and ultimately rewarded by having reusable individual containers that have unique digital IDs. So, rather than going to the store to buy a gallon of milk, so can have your own container, scan its QR code or other identifier at your local market, and the backend system will know who you are, what kind of milk you like (skim, oat, almond, etc.) and the exact amount, and will dispense that into your container. 
  •  A Circle Is Round, It Has No End: Consumers are much more interested in taking part in a circular economy. There is more activity in re-commerce than ever before as customers turn to the resale marketplace. The need for product-level identification becomes crucial here because you can not only trace a product’s origins, you can also pass along all of its information in the resale market, including selling it to be recycled and then have the recycled materials continue to be traced all along their journey.

For an in-depth look at this episode, check out the full transcript below. Quotes have been edited for clarity and length.

Key Quotes:

 

“I love building things and being around builders and people that, they’re not thinking about the next quarter, but they’re thinking about 2040 and 2050 and what the world is going to look like 30 or 40 years away from now.”

“We’re actually in the early days of seeing that transformation go from something that’s maybe at the skew level or the order level down to the individual item level, and it’s a very interesting place to be right now because we’re seeing that transformation happen before our eyes. And it’s being driven because really at the end of the day, the demands of the supply chain and demands of consumers require having that item level visibility. So for example, you now need to know exactly every step of the value chain that a product has gone or the raw materials so that you’re not sourcing materials from a conflict region or places with forced labor, and you have to have that level of assurance.In addition, brands have been making lots of claims around how sustainable their products are or their composition. Are they organic? Are they kosher? Are they certified? A lot of those have been now paper-based certifications or broad brush certifications. There’s going to be more and more demand for granular item level visibility of those things to help back up those consumer claims, and there may even be in certain regions legislation, actual fines if you actually aren’t able to. And so item level is basically enabling that level of clarity and visibility that wasn’t possible before to then have transparency at a new level that’s required by everything from regulators to new generations of consumers that are demanding to know exactly where their clothing came from or whether their food was harvested or farmed sustainably. And really, as a result of that, you’re seeing some unique opportunities for brands. Brands can actually become now at the foreground of not just their own segment for the markets that they serve, but actually in just being the most transparent or the most sustainable or the most visible company in some of these critical societal topics right now, ad we’re just going to only see that pace accelerate from this point forward.”

“If you bridge between physical and digital worlds, what you then need is to have some kind of a digital identity that you can store and associate with all of the events that happen to that product throughout the supply chain so that to the consumer or to the supply chain, there’s not a whole lot of change in terms of what you have to do, it’s getting that digital trigger on a product and then every time that digital trigger is interacting with scan, tap, or read, it’s then feeding an event that will get associated to that unique digital identity. And then all that you need at that point is a platform to actually manage all that information and then make it available to various things.”

“That’s really the power and the beauty of atma.io, we finally have this platform to capture all of these unique digital identities in one place, all of the events that get built around a product journey in one place, and then make that available to all the different systems that otherwise talk to a product throughout its journey from an ERP to a consumer mobile app, and having that data harmonized, easily available, and able to enable people to ask questions of their products and for the products actually have a voice and for products to actually talk. And now that you can learn from the product, you can learn, ‘How do I recycle it? How do I care for it? How do I donate it? How do I know where it came from?’ All of those different questions that we all have, and that consumers will have more and more of, it’s now available in one place with atma.io.”

“The idea of consumption-based supply chains will have to evolve to being able to reuse things. So whether it’s reusable packaging, reasonable containers, so that rather than buying an individual packet of M&Ms when I have a sugar rush I’m looking for, I actually can have an individual container that I can then go to the store, it’ll know that it’s my container, it’ll know that it’s me, and it’ll actually reward me for refilling and using not single use plastic or single use packaging. So I think that how we actually package products will continue to transform.

“We’re seeing a drive away from single use plastics both by consumer demand brand and push as well as regulatory outlook, particularly in places like Europe. And so as a result of that, we’re going to see a requirement for brands to come up with new ideas. So we see that that’s certainly going to be one. And then I think it’s about giving away the products and talk in very compelling ways. So right now, it’s about, if I see a product that has a QR code on it, now especially in a post-COVID world, we’re seeing that opportunity to interact with things using our phones. And I think the experiences that we can actually deliver to consumers will continue to become richer and richer so that what you actually see on a product is only one small part of the story.”

“If I see a product that has a QR code on it, now especially in a post-COVID world, we’re seeing that opportunity to interact with things using our phones. And I think the experiences that we can actually deliver to consumers will continue to become richer and richer so that what you actually see on a product is only one small part of the story. And then it’s an opportunity to continue to tell that story and add new chapters to that story between the brand then the consumers directly. So I think seeing a lot more direct engagement using the product as a channel between brands and consumers will also happen in the next few years. And as a result, that rise of direct to consumer and e-commerce using the product itself as the channel and not say, the website or something like that, I think we’re going to see much more of that too.”

“For us, it’s all about how you can actually use the digital trigger to power these sustainable outcomes in a more circular future for products and for humanity.” 

“Now that we’re having all of this item-level data that we’re capturing through supply chain from the raw materials, through the production process, all the way through to the purchasing experience and pre and post, it’s a ton of information that you can actually then turn into analytics and insights. And so we actually have a data science team that’s been building and pioneering how to measure these different KPIs so you can get to things in the future like a trust score. So based on the certain amount of information you have 100% visibility of what’s going on for a product that you’re buying, or maybe there’s a net trust score that you can actually rate whether you trust this brand more than others. And you’re starting to create this dynamic where consumers have much more agency to really help brands think about how they operate, what information they capture and make available to consumers, and then how they can also themselves operate as brands and supply chains much more efficiently.” 

“If a product’s life is extended and the typical consumer buys somewhere in the US between, I think, it’s like 50 and 70 articles of clothing a year, and they then suddenly shift that to maybe buying 40 to 50, and so we’re suddenly a reduction of say 20% because we extended the life of some of our items, you can see a wholesale shift in the amount of product getting made by large brands and small brands because they don’t need to put as much product into the supply chain. And by not having to make things because the products themselves get extended, the overall carbon footprint of the apparel industry can go down dramatically.”

Mentions:


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Transcript:

Stephanie:

Hey, everybody, and welcome back to Up Next In Commerce. I’m your host, Stephanie Postles, CEO at Mission.org. Today on the show, we have Max Winograd, who currently serves as the vice president of connected products at Avery Dennison and is one of the co-founders of atma.io. Max, welcome to the show.

Max:

Thanks so much for having me, Stephanie. Glad to be here.

Stephanie:

Very excited to have you on. Just diving into the background of Avery Dennison, all of these things, this whole world, I didn’t really know existed. So I just want to dive right in to, how did you end up at Avery Dennison?

Max:

Absolutely. I started my career as a startup CEO and co-founder and started my first company right after graduating from university. And along that journey, got to meet and build an amazing network of folks in the industry of packaging and materials. A lot of those folks happened to also be at Avery Dennison. And after we sold my company, NuLabel, to Altana in 2017, Avery Dennison was also going through a transformation where they really wanted to drive the future of disruption by disrupting themselves, and one of those ways was to actually create a corporate venture capital program.

Max:

And given the startup experience and materials experience, I had a unique opportunity to be a part of building that new capability within Avery Dennison. And so when I got the LinkedIn message talking about this opportunity, I jumped at the challenge. And so I first joined to really help in building that capability for the business to go out and actually invest in amazing entrepreneurs and startup companies around the world, helping to connect physical and digital worlds and overall improve the future of sustainability and a circular economy. And from there, was able to then uncover a new opportunity within Avery Dennison to actually create and start with some amazing co-founders, a digital venture atma.io, which we started back in 2019 and then formally launched earlier this year.

Stephanie:

Amazing. So you started that from within the company? You were an entrepreneur starting your own thing but still within the brand of Avery Dennison, right?

Max:

Yes, exactly.

Stephanie:

Very cool. So when you came in originally and you were starting up this VC fund within the company, how many other companies were you investing in? How many startups were you investing in and what were maybe some of the craziest things you were seeing back in the day where you were super impressed with small startups?

Max:

I love building things and being around builders and people that, they’re not thinking about the next quarter, but they’re thinking about 2040 and 2050 and what the world is going to look like 30 or 40 years away from now. And so we have a great portfolio of eight investments that we’ve made so far since we formally launched our CVC back in 2018. One of the investments that I’m really proud about, that’s really amazing in terms of how it’s going to transform everyone’s daily life is a company called Wiliot out of Israel. They’ve developed battery free Bluetooth technology that can actually be used to sense various conditions that might be going on with a product or with an individual item.

Max:

Imagine not just knowing how to track something, but to know what’s happening to it in real time. Because it’s battery free, it can be brought down to that individual item level, so it’s not just like a thermometer on a truck, but actually every single vial of a COVID-19 vaccine can now be individually monitored, every single tray of produce could be individually monitored. And so, it unlocks up a true amount of potential to know so much more about what’s going on as a consumer, to the things that we put in our bodies, cloth our kids with, etc, that really I think will power the next wave of the internet of everyday things.

Max:

We’ve also made an investment in a company that’s taken the actual Silicon out of a chip to really reduce the overall costs of what could be an RFID or NFC type of a tag, which can again, drive that ubiquity of connecting everything. And if you think about that ability to then everything can talk, then suddenly now products can actually become not the waste that we see today, but actually the enablers of sustainability for the future. So it’s a really exciting time to be investing in the IoT space, to be partnering with entrepreneurs at Wiliot pragmatic with the other company I was alluding to earlier, and then also being able to build innovation in-house within Avery Dennison through atma.io.

Stephanie:

Cool. It seems like also right now, we’re at a time when all this can actually be made possible. We’ve been hearing about IoT for, I don’t know, like a decade, maybe more, and it seems like things just weren’t really ready yet, but it seems like we are now. So tell me a bit about the landscape of, what does it look like? How many companies are tracking at that level? You were mentioning like, “I know this tomato has mold on it, I know those mayonnaise just drop below whatever the temperature should be and we need to throw that out.” How many companies are actually utilizing this today.

Max:

We’re actually in the early days of seeing that transformation go from something that’s maybe at like the skew level or the order level down to the individual item level, and it’s a very interesting place to be right now because we’re seeing that transformation happen before our eyes. And it’s being driven because of really at the end of the day, the demands of the supply chain and demands of consumers require having that item level visibility. So for example, you now need to know exactly every step of the value chain that a product has gone or the raw materials so that you’re not sourcing materials from a conflict region or places with forced labor, and you have to have that level of assurance.

Max:

In addition, brands have been making lots of claims around how sustainable their products are or their composition. Are they organic? Are they kosher? Are they certified? A lot of those have been now paper-based certifications or broad brush certifications. There’s going to be more and more demand for granular item level visibility of those things to help back up those consumer claims, and there may even be in certain regions legislation, actual fines if you actually aren’t able to. And so item level is basically enabling that level of clarity and visibility that wasn’t possible before to then have transparency at a new level that’s required by everything from regulators to new generations of consumers that are demanding to know exactly where their clothing came from or whether their food was harvested or farmed sustainably.

Max:

And really, as a result of that, you’re seeing some unique opportunities for brands. Brands can actually become now at the foreground of not just their own segment for the markets that they serve, but actually in just being the most transparent or the most sustainable or the most visible company in some of these critical societal topics right now, ad we’re just going to only see that pace accelerate from this point forward.

Stephanie:

Yep. We definitely see consumers right now really wanting that transparency and losing trust in certain brands and they don’t fully understand what’s happening behind the scenes, but I do wonder, how can a brand, especially a brand that has a lot of pieces from start to finish, tell the story of that product to a consumer in a way that’s actually going to make sense to them and not overwhelm them?

Max:

Absolutely. A good question, Stephanie. So there’s really two parts of the puzzle that have to come together because at the end of the day, we’re still talking about physical things. So we’ve got to deal with both the atoms and the bits, as the old saying would go. And so for the physical side, you need to put something onto the product or use something on that product to be able to actually give it a unique identity. And so the concept of that digital trick, as we would call it, could be something like a QR code, it could be an NFC tag that you can tap. If you’re in the supply chain trying to track inventory visibility, you could use something like an RFID tag.

Max:

All of those are various types of digital triggers that can at least individually identify that unique item as bad. Then on the other side, if you bridge between physical and digital worlds, what you then need is to have some kind of a digital identity that you can store and associate with all of the events that happen to that product throughout the supply chain so that to the consumer or to the supply chain, there’s not a whole lot of change in terms of what you have to do, it’s getting that digital trigger on a product and then every time that digital trigger is interacting with scan, tap, or read, it’s then feeding an event that will get associated to that unique digital identity.

Max:

And then all that you need at that point is a platform to actually manage all that information and then make it available to various things.

Stephanie:

I was going to ask that. Yeah, I was just going to say, “Where’s my dashboard. I know there’s all these things out there collecting data, can it all come together in one place so I can be like, ‘Ah, there’s all my tags and RFIDs and all the thing so I know exactly what’s happening'”?

Max:

And that’s really the power and the beauty of atma.io, we finally have this platform to capture all of these unique digital identities in one place, all of the events that get built around a product journey in one place, and then make that available to all the different systems that otherwise talk to a product throughout its journey from an ERP to a consumer mobile app, and having that data harmonized, easily available, and able to enable people to ask questions of their products and for the products actually have a voice and for products to actually talk.

Max:

And now that you can learn from the product, you can learn, “How do I recycle it? How do I care for it? How do I donate it? How do I know where it came from?” All of those different questions that we all have, and that consumers will have more and more of, it’s now available in one place with atma.io.

Stephanie:

Yeah, that’s amazing. I can also just imagine the stories that can come out of it where before, consumers were pretty used to back in the day, buying something and eventually it’s probably going to end up in a landfill and how can we make sure maybe that it goes there and maybe it doesn’t completely stay there for 1,000 years or something. Now it’s way more circular where people are like, “Okay, and now what can we do with that end product to get back out into consumer’s hands again, maybe repurpose this into something else?” But it feels like that could help tell that story and then also make the consumers feel good about what they’re buying and the brands feel good about being able to showcase the full life cycle of their product and how maybe it’s transforming into something crazy new and different, but it’s being used again.

Max:

That’s absolutely A great example is actually Adidas has made a very strong initiative to become a leader in the circular economy. And what they’re actually doing is really three different things. They’re not just thinking about how do they actually close the loop, but even making products that are made to be remade by design. And so by rethinking the materials that go in and then having a story to tell about that to consumers, drives that deeper connection and even a more responsible connection between brands and products and consumers. And now it’s the point that consumers can actually use their program called Infinite Play, which they just shouted about in March during their investor day, which is ultimately using atma.io and digital triggers on products to enable consumers, to actually recycle and give the product a second life.

Max:

So you can scan it and register the product, then trade it in through their mobile app and give that product an extension. And so for every one of those products that you extend its life, you’re then ultimately reducing the actual carbon costs for a brand or for an individual consumer, because you don’t have to buy then two pairs of sneakers a year, you might just buy one pair and then extend its life or get one that’s already been recovered and re-commercialized. And so it’s a tremendous opportunity that you’re giving each individual consumer the agency to be able to help advance the circular economy.

Stephanie:

Yeah. You’re making them a hero, which is really important now, allowing the customer to actually feel good about what they’re doing and be the hero of the story, and then come back and potentially buy another one, knowing that they have an outlet to, when they’re done with it, bring it somewhere. Because I think that’s a lot of consumers now, you want to do something good, but you’re like, “I just don’t know where to bring this or what’s going to happen to it,” and you can’t track it so you don’t trust it. So that’s amazing what they’re doing. Tell me about what a future state looks like? Because you’re seeing Adidas do that now. How do you imagine brands and consumers interacting around this maybe in like a couple years? What will that world look like?

Max:

I think the idea of consumption-based supply chains will have to evolve to being able to reuse things. So whether it’s reusable packaging, reasonable containers, so that rather than buying an individual packet of M&Ms when I have a sugar rush I’m looking for, I actually can have an individual container that I can then go to the store, it’ll know that it’s my container, it’ll know that it’s me, and it’ll actually reward me for refilling and using not single use plastic or single use packaging. So I think that how we actually package products will continue to transform.

Max:

We’re seeing a drive away from single use plastics both by consumer demand brand and push as well as regulatory outlook, particularly in places like Europe. And so as a result of that, we’re going to see a requirement for brands to come up with new ideas. So we see that that’s certainly going to be one. And then I think it’s about giving a way the products and talk in very compelling ways. So right now, it’s about, if I see a product that has a QR code on it, now especially in a post-COVID world, we’re seeing that opportunity to interact with things using our phones. And I think the experiences that we can actually deliver to consumers will continue to become richer and richer so that what you actually see on a product is only one small part of the story.

Max:

And then it’s an opportunity to continue to tell that story and add new chapters to that story between the brand then the consumers directly. So I think seeing a lot more direct engagement using the product as a channel between brands and consumers will also happen in the next few years. And as a result, that rise of direct to consumer and e-commerce using the product itself as the channel and not say, the website or something like that, I think we’re going to see much more of that too.

Stephanie:

Oh, that’s interesting. And that’s definitely a shift in thinking from around all these brands right now, trying to create lots and lots of content, and sometimes it’s not always actually even about the product, it seems like they’ve maybe run out of ideas of like, “How can I fully put a really good story around this and repurpose it and do it in different ways?” Whereas this brings that back to focusing on the product and maybe less on all the nice fluffy things on the outskirts that they’ve been focusing on.

Max:

And you think about like the online environment for marketing, if you are looking for a product, you’ll suddenly get served banner ads and popups of the product that you’re searching for in various news websites and whatever, that serves those ads. Then you go and buy the product and then you’ll see the ads for that same product again, because they don’t know whether you bought it or not, they still serve up that content. And then let’s decide that you actually want to get rid of it and return it, you’re still going to see those ads because maybe you’re thinking maybe you’re looking up for ways that you can actually recycle the item or get a refund.

Max:

And that fundamental experience of, you’re not actually changing what the consumer is seeing content wise during the purchase process of pre, during and post, that ultimately leaves a lot of opportunity for building brand loyalty on the table. And we think that with, by having a product like atma.io, actually using the product to create unique and dynamic content that we can constantly refresh, depending on the condition of the item, we can not transform that experience so that we’re giving really compelling pre-purchase content at that moment of truth in the store or at home, we can then offer post-purchase experiences that help drive better engagement, better sustainable outcomes, and all that content can be developed by the brand. And then we use the product itself to tell us what content to offer the consumer.

Stephanie:

Wow. So it’s essentially making every product evergreen, it’s able to stay around and just keep having new stories coming out of it for as long as, I guess, it can keep going around in a circle and people keep turning it back in. That’s pretty powerful. I want to also think about, maybe I’ve watched too many Jason Bourne style shows and whatnot movies, but I want to hear how you’re thinking about the security aspect of it. Are there any risks when everything’s maybe has digital triggers on there and you can track everything? I’m just thinking about some bad actors coming in and being like, “Well, now I know exactly where X, Y, and Z are, and I’m going to take it out”? Is that a little negative? And if so, tell me what you think about that.

Max:

It’s a good question, Stephanie. And I think that for us, we obviously view ourselves and act as a force for good. So for us, it’s all about how you can actually use the digital trigger to power these sustainable outcomes in a more circular future for products and for humanity. In terms of what you can actually do is, you can use the fact that there’s a digital trigger on the product to help actually improve the security of that item. So today in many different types of markets, you actually have a big problem with counterfeit items, maybe it’s fake milk going to places in Asia where they’re actually poisoning young children, or fake medicines.

Max:

You have big products that then are costing brands millions of dollars and actually giving consumers a bad experience because they’re then buying either fake products or products through an unauthorized channel. You can actually use the digital trigger to improve that brand protection, avoid those gray markets, avoid the counterfeits. So I think there’s actually a story, the positive side on the security piece. And then in terms of actually using the digital trigger with things like unique identities for say the actual tag ID that’s on the NFC tag, that you can actually use the fact that we’re producing that in a factory and actually managing that information to create additional factors of authentication to prevent bad actors from suddenly being able to enter in and put their own chips or something like that on the product itself. So you would be able to make those connections.

Max:

And then you actually use the atma.io platform and its data intelligence to be able to know, “Well, this product got scanned in Japan and the product was destined to actually go from India to the UK. Something probably shouldn’t have happened that happened.” And we’ll be able to actually identify those outliers faster so that the brands can respond and react and then consumers can also potentially be informed, is it real or fake? Is the product where it’s supposed to be? Did anything happen to it? And there was essentially a break in that chain of custody.

Max:

All of that visibility is now possible. And then lastly, as our platform is really a backend solution for capturing these different events about these different items, we’re not actually capturing consumer data. We know that a product was scanned, but we don’t know that Stephanie scanned it. And so that’s an important piece as well. Now, the brand, if you use like an app from the brand and you opt in and you and you register and you’ve actually agreed and consented to providing your personal information, then the brand may know that. But even at that point, if we’re behind the scenes powering it with digital identities, we don’t see that information either.

Stephanie:

It seems like there would be room to be able to put a lot of that data also on the blockchain so that it can’t be changed and moved around and then you have a record forever in history. How have you guys thought about maybe implementing different kinds of tech to support everything else you’re doing?

Max:

A great question. We actually work with some amazing blockchain partners that are pioneering the next generation of decentralized identities and distributed ledger. So a couple of examples that I can talk about, we partnered with MasterCard Provenance, which is one of the leading blockchain providers, to really help out with product traceability. They’re doing a lot of exciting work in raw material tracking, particularly in the food segment.

Max:

We also work with a group called Hedera, which is an amazing group that’s helping to pioneer really like a third generation of blockchain technology that is far more efficient in terms of costs, time and energy compared to some earlier platforms like Ethereum or Bitcoin. And what they’re doing is using what they call a hash graph and a gossip protocol so you actually can have a much more efficient way of getting to that answer, the finality if you will, with the transaction. And for that example, actually, then just write a one-way hash of that data and the hash on that immutable ledger has to match what we have in our platform and what the brand might actually want to know.

Max:

So that extra layer of trust does become very, very unique that we can actually provide using blockchain, if that’s what makes sense for the customer or the use case. And so that choice and that functionality we offer to our customers.

Stephanie:

Wow, that’s cool. What are other maybe capabilities you’re excited about? Maybe they’re not here yet, but you’re like, “Ooh, I could see a lot of unique ways to incorporate that here, here and here”?

Max:

Really, for us it’s about, now that we’re having all of this-item level data that we’re capturing through supply chain from the raw materials, through the production process, all the way through to the purchasing experience and pre and post, it’s a ton of information that you can actually then turn into analytics and insights. And so we actually have a data science team that’s been building and pioneering how to measure these different KPIs so you can get to things in the future like a trust score. So based on the certain amount of information you have 100% visibility of what’s going on for a product that you’re buying, or maybe there’s a net trust score that you can actually rate whether you trust this brand more than others.

Max:

And you’re starting to create this dynamic where consumers have much more agency to really help brands think about how they operate, what information they capture and make available to consumers, and then how they can also themselves operate as brands and supply chains much more efficiently. For example, we can now understand which products have a longer drive time going from point a to point B, helping to unlock whether expiry dates might need to be observed in a different window of time like maybe within three days of expiration, there’s an alert that helps them know to try to ship it from the DC to the next node in the supply chain.

Max:

That data right now is very manual to try to capture and pull the other, or you have to go talk to 15 different software systems that you you use in your enterprise to get to the true answer and still run the analytics on top of that. We can actually capture it all and do that analytics work within atma.io

Stephanie:

Wow, that’s cool. I can also imagine this could have solved a lot of the supply chain issues we’ve seen over the past couple of years. I’m also just thinking about having a rule-based system where it knows the inventory and maybe the warehouses or wholesalers or whoever, and it’s like, “Ah, this one looks like it’s a little small, I’m going to instead switch over to this supplier and just be able to bounce around just based off the data at the ground level.”

Max:

That’s a great point, Stephanie. And actually, if you think about what COVID has done in terms of disrupting and transforming supply chains is the fact that the immediacy and the need for that real-time visibility at a very granular level is incredibly important. I even think now, if I were to look online for a product like let’s say I want to buy a t-shirt, I’m going to make sure that the store that I’m going to has that t-shirt in my size in stock, otherwise, why should I risk going into a store and potentially getting exposed unnecessarily just to walk away with not getting what I wanted?

Max:

And so that level of visibility which requires that specific item being visible and made available to consumers is just one example of that buy online pickup in-store experience that requires really highly accurate inventory. And that’s really combining things like RFID, atma.io as an item-level platform to really get to that level of visibility and then making it available to things like Google and other services so that consumers can actually take advantage of this added visibility. And then I think over time, brands can use that information that they’re gathering to make smarter decisions of where to ship product, which steps of the supply chain are more efficient, and then how to make reactions in real time and be much more proactive in avoiding dislocations or lock downs and things like that.

Stephanie:

So I want to talk a bit about metrics and measurements. How do you know if the platform is working? What kind of metrics do you tell a brand, “You should be looking at this, this and this to know if this new system for you is doing well”?

Max:

Good question. With atma.io, we really break it down at the end of the day by the different types of use cases that you’re trying to drive. Are you trying to drive better compliance? Are you trying to drive better operational efficiency? Are you trying to improve your carbon footprint? Are you trying to drive your engagement rate with consumers? Depending on what those end objectives are, we then work backwards and say, “Okay, given that objective, here’s the playbook to actually ensure compliance. It’s actually then implementing item-level visibility and going first to your tier one suppliers into your tier two suppliers. And here’s how you can capture the information you need, whether it’s compliance certificates or just the actual individual item events that happen based on global standards like EPCIS to actually know the who, what, where, when, why have a product every step of the way.”

Max:

And then having it a place that you can then see and query, and then even make available when someone wants to audit you, those are the kinds of examples. So we start with the objective and the outcome, we then try to figure out what’s the baseline, so where are we today? How many compliance claims did you have in the last two years? What is your current consumer engagement rate using various types of channels, whether it’s social, email based, advertising, things like that? And then we try to then show how we can improve the baseline.

Max:

And with our model based, which is really all entirely a pay per use model for atma.io, you make it super simple and easy to onboard customers to try new digital triggers alongside a digital ID platform to try to get towards those KPIs that actually ultimately prove that that outcome occurred.

Stephanie:

Very cool. Have you seen any shifts in the industry lately where all of a sudden a lot of companies are coming to you and they all have pretty similar end goals? Because it seems like everyone will eventually want inventory tracking. Everyone want to make sure they can see their whole supply chain, but is there anything new that’s popping up that’s a little bit surprising?

Max:

Well, there are a few that are regulatory driven where you’re suddenly seeing the exact same requests coming from multiple players within a particular market segment. One example is given some of the concerns around raw materials in the apparel industry, there was a sudden big demand for having visibility, not just from the factory onward, but actually going upstream to raw material suppliers, to be able to get really an understanding of where did the product come from and where has it been.

Max:

And so we’ve seen that as a very heightened sense of interest, in part because there’s the potential for enforcement duties and things like that, if they’re not compliant from an import perspective. And then the other side of it that we’re seeing is there’s an increasing requirement around things in the food industry around food safety and food recall management. And so there are pending regulations in the US with what’s called FSMA. That’s an example of the types of regulations that are coming on soon, where everyone’s going to have to have some level of a system of record to store information about the items that are in their supply chain in the event of a recall, in the event of some kind of a food safety incident.

Max:

And so that’s also increased a lot of interest coming from food suppliers that want to be able to have that. And then there’s what we think is going to be, to your point earlier about evergreen, an ongoing topic around sustainability, where you just see that the trend is only increasing in terms of… One of the areas I think was actually probably the most surprising though, or interesting, was just the level of lift of the resell market, that as a result of people being at home not needing to use all the clothes that they typically have in their wardrobe while they’re doing Zoom calls and working remotely, some of these are huge uptick, high double digit percentage point, you’re over your growth in the secondhand market for apparel.

Max:

And you’re also seeing large financings/companies like Trove, IPO’s with companies like thredUP, they’re really driving the future of re-commerce and resale within the apparel industry in particular. And I think that speaks to the ongoing just consumer trend of wanting to be an active participant in circular economy with the dynamics of COVID, and that itself, as a use case requires item of visibility. Just knowing that it’s a black t-shirt of this particular skew, isn’t enough to know how to care for it and recover it because it’s going to be subject to local recycling capabilities and requirements.

Max:

And so you need to get down to the individual item that’s in a particular location and area to be able to actually give that product a second life, which is why the Infinite Play program with Adidas is just one great example of how item level visibility and digital identities actually create the potential for circularity.

Stephanie:

I love that. What impact can you have on sustainability if you start implementing these at either, even you do it at the world level? If you had metrics around that or just at brand levels, how do I think about how big of an impact this can have if it’s implemented?

Max:

Well, let’s think about it, I’ll pick on the example of Adidas. Let’s say a typical sneaker or apparel item has between a 10 and 15 kilograms of CO2 equivalent of carbon footprint to exist, like cradle to grave. That’s how much the carbon cost. They produce over one billion items a year. So if you then take that number and track, we’re talking of truly like trillions or tens of billions of kilograms of CO2 equivalent. So if you think about the goal of re-commerce, it’s actually to help extend the life of a product.

Max:

So if a product’s life is extended and the typical consumer buys somewhere in the US between, I think, it’s like 50 and 70 articles of clothing a year, and they then suddenly shift that to maybe buying 40 to 50, and so we’re suddenly a reduction of say 20% because we extended the life of some of our items, you can see a wholesale shift in the amount of product getting made by large brands and small brands because they don’t need to put as much product into the supply chain. And by not having to make things because the products themselves get extended, the overall carbon footprint of the apparel industry can go down dramatically.

Max:

During even just like the one hour that we have together on this podcast, we’re going to see tens of thousands of tons of waste get generated in the food industry and the apparel industry, etc. And if you can extend things and have better visibility, it can be tremendously valuable. Another example in terms of food waste, so pick on another industry, 40% of food waste happens in the home, most commonly that’s because you end up forgetting that you put the particular produce item or whatever in the back of the crisper, and then it expires, and then you got to throw it away.

Max:

Or you’re just worried that it’s getting too close to the expiration dates, so you practically throw it away. Or you are worried there’s potentially a product recall, they say, “Oh, this particular lot of romaine lettuce, and then anything that’s green in your fridge, is this going into the waste band?” Those types of examples are really what happens when you don’t have all the information and you’re not necessarily getting real-time visibility into what you currently have, what you ought to potentially use, or cook, or donate.

Max:

And so there’s, I think, a tremendous amount of opportunity in that like 40% of all food waste that could actually be chipped away if you have that item level visibility, and we can equip consumers with tools to get better real time insights as to how they can reduce waste, and get those kinds of nudges to really, I think, have a true very global impact, but one that can be done at a very individual level.

Stephanie:

Yep. That’s very cool to think about… Definitely needed when thinking about all the things that are thrown out, like, “Hmm, it’s close to expiration date, how long have I had it open for?” I think you guys also need this for leftover containers, that’s what I need anyways. Like, “Okay, you made this two weeks ago, don’t think about it, Stephanie, you’ve got to get really sick.” Have you seen brands embrace this in a different way though because it seems like sustainability has been a thing that’s gone through?

Stephanie:

Everyone talks about it because of regulations, it’s like you have to do this, and then consumers started getting excited about it and actually pushing the initiative forward, I think. And now it seems like brands want to do it, not only because they’re consumers, but they’re actually onboard, excited to do it. How have you seen their excitement shift and do you see them actively coming to you excited about doing that?

Max:

Yeah. That’s certainly where we see brands going, and some amazing leading brands that we count on as customers are actually taking that exact approach, which is just a realization that we can’t continue to produce products and drive consumption based behaviors and supply chains the way we have or else there just won’t be a planet to operate. And there won’t be a planet… At the end of the day, the planet will survive, but it may not be a hospitable place for humans.

Max:

And as a result, if that doesn’t exist, then how are you going to sell things? And how are you going to ultimately create an economy? And so I think the realization that brands have, I think really are starting to embrace is the notion that we need to proactively try to prolong the livability of our planet so that we can continue to operate our businesses and ultimately deliver the values and returns for all of our stakeholders, not just shareholders, but our employees that need to have healthy lives and outcomes, the communities we serve, and really all of those things come together to really, I think, drive that shift.

Max:

And I think it took some consumer demands to help try to open eyes, but then I think brands are also really seeing that this is an imperative just that we have to be proactive, otherwise that notion of disruption I talked about earlier, they’re going to be disrupted by climate change and disrupted by the reality that it’s not going to be able to be business as usual anymore. And so it becomes an imperative for them to actually lead the charge to be able to then drive the next wave of prosperity.

Stephanie:

Yep. With anything new, there’s always many misconceptions, I’m sure. So what are some things that you hear from maybe large companies, some misconceptions where they’re like, “Oh, well I can’t do that because of this.” Or, “I believe this.” What do you hear right now that’s maybe actually not true around having digital tracking and triggers and inventory, level of awareness and all that?

Max:

A couple of concerns that we sometimes hear are obviously, let’s say you have a brand that buys products from hundreds of factories and it becomes that you hit that first inertia point of saying, “Well, how am I going to get all of my factories that I buy from to all put on these digital triggers and all these other things?” And I think ultimately, that’s not necessarily thinking of the situation through the right lens, it’s much more about, can you imagine how much more efficient my suppliers can be and I can be if they embrace this technology and actually utilize it at the item level?

Max:

And this ultimately can enable the profitability of my suppliers, which can improve my overall profitability and then ultimately, improve the consumer experience. And so I think reframing the potential point of objection, I think is one of them. And then I think the other part of it that’s important is there really is sometimes so much possibility, to your question, that they will wonder, where do I start? I could do supply chain tracking, I can do consumer experience, I can do re-commerce, I can do raw material visibility, what’s the right place to start?

Max:

And it really depends on their objectives, but the idea is that we’re providing them the tools and the toolkit to be able to do any of those things, and then let’s actually go and build out a program. The most important thing is to get started, put a digital trigger on a product, because once that’s there, you can use it for all those different use cases. You can actually do the consumer experience if you want to turn that on, or you can wait and just do supply chain tracking. And it really comes down to what helps try to drive the return on investment that you’re looking for, for any type of digital transformation program. And then over time, embrace all those use cases to have that true end-to-end visibility at the item level.

Stephanie:

Yep. Are there any price points where it’s like, “Uh, it’s maybe not attainable to do it yet?” Like if you have a product that is two sentence, like maybe you’re not there yet, or can it be applied to anything?

Max:

When you have what’s the individual items that might be the price per item is very low or they may be difficult, you’re not going to individually label individual piece, for example. Potentially, it might be a case or a carton of them. So you’re just trying to figure what’s the smallest unit that you can give a digital identity to, and ultimately tag, if you will, with the digital trigger, and then use that as a starting off point to then get towards the business outcomes and those KPIs. And so I think that’s really where we see the opportunity is to figure out, “Okay, probably doesn’t make sense to track that individual piece of fruit, but maybe that’s part of a clam shell container that’s got 12 ounces of strawberries in it.”

Max:

And that’s really at the end of the day, the unit that gets sold, whereas in other industries you’re buying a t-shirt, you’re buying the sneaker, you’re buying the individual prescription vial, things like that.

Stephanie:

Yeah. Cool. Good to know. Where do you see your role evolving to over the next six months? What are you going to start tackling? It seems like things are moving really quick, so I’m sure your role at the company is also going to be adjusting as it has since you’ve been there.

Max:

I’m sure. For us, it’s really about, I think, continuing to drive more and more adoption of atma.io, and unlocking the potential of connective products. So I see a lot of the work around data science and bring that intelligence to brands and supply chains to be a big focus. We’re already thinking about really, how do we drive more and more consumer adoption around wanting to just scan products? The more that they engage with products, the more insights brands can get for which products to sell and how to sell them.

Max:

And consumers can also get more intelligence about where products came from and become much more informed to make more sustainable decisions, and also just more personalized decisions around the products that they want to buy. And so I think driving more and more of that consumer activity is also a key focus. My goal is to continue to build this amazing team that we have in atma.io and help build additional teams across Avery Dennison that can help lead this digital future that we’re seeing for products, for packaging and really unlock the potential when every individual item has a unique digital identity.

Stephanie:

Yeah. When you’re talking about consumers now and thinking about consumers, scanning things and all that, we’ve heard from a past, like a couple of our past episodes throughout many shows on our network, the executive thing, there’s certain pieces of tech that other companies just need to come together and collaborate on because there needs to be consensus on the technology that’s used. And then there’s other areas where you need to compete and become the best. How do you think about building out technology that becomes ubiquitous, like a consumer just knows, I use this to scan it?

Stephanie:

And I’m thinking back to the early days of QR codes where there was 1,000 different apps and it’s like, why can’t now I just use my camera? But how do you all think about what to build out and give away so everyone can use it versus competing on something?

Max:

Yeah. I think QR is a great example and I think we’re approaching a point of near universal adoption where people that maybe never scanned the QR code before they have to in order to order food at a restaurant, because there just was much more touchless activity in the last 18 months. But what we’re going to really see as a result of that embracing standards for private identification. And we want to be active and participating and promoting and working with those standards.

Max:

And that involves groups like GS1, Aim Global and many other groups that are ultimately helping to articulate these standards, even government organizations that might select a particular type of standard for a particular segment or use case, like, “Okay, for pharmaceutical industry, for serialization, you must use data matrix codes, or you must use QR codes, or you must use GS1 Digital Link.” That’s great. And so then having a platform that can work with all those different standards, then becomes really, really important.

Max:

And so that’s where we can see our tech become the business logic on top of those standards to then be able to capture information and also make that information available in very digestible and accessible ways. And then the other side of it, I think, is really partnering with the folks that are bringing the creativity. I still think that at the end of the day, a product-based consumer experience, it’s somewhat feels like a shark that has to keep swimming to stay alive. You have to keep the content fresh, you have to constantly be thinking about what is the consumer, what next?

Max:

And so bringing and partnering with some of the leading creators, as well as those that can help figure out what type of experience to serve up to certain consumer groups based on how they’ve interacted with the product or the other context around that consumer experience, I think becomes really, really important to make the consumer-product relationship more and more compelling in the future.

Stephanie:

Yep. That’s the way to scale and become a household name for consumers in a way maybe that you weren’t even able to before, which is awesome. Time to move on to the Lightning Round. The Lightning Round is brought to you by Salesforce Commerce Cloud, and this is where I ask you a question and you have a minute or less to answer. Are you ready, Max?

Max:

I am.

Stephanie:

Okay. First, if you had a podcast, what would it be about and who would your first guest be?

Max:

For me, I really love music, I love live music. I would love to have a podcast where I was actually interviewing people that went to these amazing, crazy concerts and experiences that pre-dated me. So maybe it was some time where it was Miles Davis and the Grateful Dead doing a show at some university festival in the 1960s. I’m making it up, but just hearing those experiences from people, I think would be amazing. That’s one. And then another one that I would be very interested in doing is, this really learning from other entrepreneurs and talking to them about those at the brink moments in the company.

Max:

There’s a few of these inflection points that happen with a company, whether it’s to take on the next round of funding, to make a pivot in their product roadmap or journey, and really focusing on that specific moment, like, “What was going through your mind? What did you decide? Why?” Almost like a HBS case study, but specifically to those life or death decision points that entrepreneurs face in their company’s life cycle.

Stephanie:

That’s great. I can tell you’ve been thinking about this. That’s awesome. What’s the best piece of advice you’ve ever gotten?

Max:

I think the best piece of advice that I ever got was to always make sure that you’re humble and asking questions. When you start off as an entrepreneur, you sometimes have this mentality as a first time entrepreneur that it’s you versus the world, that you have to solve all the problems and figure it out versus the alternative to say, acknowledge you actually know very little, it’s very difficult to map out the universe because you don’t know that much about it, let’s go out and find those people that can give you guidance and advice and help light the way.

Stephanie:

Yep. I love that. What’s one thing you don’t understand today but wish you did?

Max:

That’s a great question. I think one thing I would like to understand today and I wish I did is probably more technical on the software side. I love building software teams, I love building software products, but I wish I could write a few more lines of code than I can write now.

Stephanie:

Yep. Cool. And the last one, what are you most excited about in this next year?

Max:

I’m most excited about continuing to grow the atma.io team and continuing to turn out amazing use cases and opportunities with some tremendous brands and customers. The fact that large brands in the apparel industry and some of the top brands in the food industry trust atma.io is incredibly fulfilling and exciting, and I’m excited to work on the next big thing with those customers and the new markets too.

Stephanie:

I love that. Are you guys hiring? And if so, what kind of people are you looking for?

Max:

Yes, we’re definitely hiring. We’re looking to continue to build out our commercial teams, so we’re hiring solution engineers, customer success managers, project managers, and we’re always growing our developer team. So product owners, software engineers at all levels of experience, and also data scientists. So check out atma.io to actually see our different job postings. And we’d love to have you join the team.

Stephanie:

I love that. Well, Max, this interview’s been awesome, very eye-opening to hear all the cool things that are going on behind the scenes. Where can people find out more about you and Avery Dennison?

Max:

Well, folks can find out more about me on LinkedIn. I’d love to connect with anybody on LinkedIn to learn what you’re working on and ways that we can collaborate. You can find out more about Avery Dennison at averydennison.com. You can find out more about atma.io at atma.io.

Stephanie:

Amazing. Thanks so much, Max.

Max:

Thank you. Thank you for having me, Stephanie.

Episode 143