T-Mobile US, Inc. (TMUS) Earnings Call Transcript & Summary

We'll come back to you in a moment. I just wanted to kind of end here, so you guys were together on this stage last year, [indiscernible] and Roopi. And how has the last year transformed your business together?

So I think for me and the T-Mobile team is making sure that our clients are always connected, right? They can deliver on the solutions that they need to. So many times they sit with a client or future client. And they're like, well, we can't innovate because 200 stores are down on a daily basis, right? And they don't have the infrastructure in place or they don't have great primary coverage right? Or the cable is cut somewhere. So -- and when we start to work together, Tractor might have had those problems, but we put those to bed. And if a retailer is really going to be successful, they have to look at their infrastructure, then they layer on platforms to deliver the solutions that they need to. So it's kind of like a pyramid but on the bottom is that connectivity, right? And then the second thing T-Mobile does is it's not just about selling you something. It's about day 1 to understand what you need. Day 2 is execution, day 3 is being there when there is an outage, right? That does happen. I'm not going to say it's perfect, and that they can call us whether it's Thanksgiving, Christmas, any time they can give us a ring, and they can reach out to me, my team, our leaders to say, we have a problem. We have SLAs in place to make sure that is put up pretty quickly back on track. And I think why we work so well together. It's not just that we're a vendor, we're a partner. So we understand what they're trying to do in the future and then bring them solutions, right? Hey, I was at NRF -- did you see this in this booth, you should go check it out. That's the type of relationship that we have.

Yes. Here's what I would say. Last year, when we were here, we were still talking about infrastructure, so to speak, and the investments that we needed to make to be able to go faster. When we start talking about pushing the boundaries of technology and pushing ourselves forward in pursuit of really servicing our customers and our team members that fundamentally has shifted now to back to capabilities -- and I think that's the real key. And it's because we have reliability in our network. We don't have incidents. We have the speed in the broadband, so we can go and ideate virtually anything. I gave you the example of what we're doing with Hey GURA right? I gave you the example of what we're doing with the computer vision, but they're not stopping there. We're redeploying our loyalty programs and our features and capabilities in our stores and how we're serving that up real time. What are the types of things that we're offering the customer at the register. Like we don't want to ask the customer 5x if they've enrolled in our credit card program when they have a credit card, right? So it's not just stopping there. And now the shift is just to what is possible. And it's about empowering those team members and they're getting engaged in and then it's just a really, really exciting time.

That's great. You're really -- you're painting the picture of the future what you're describing, current and future. So thank you. I'm speaking of future because I want to turn it over to Mark, and I think that we -- there's -- I have a statistic here around digital twins. According to Forbes, digital twin market is projected to continue growing at 42% compound rate annually to $53 billion by 2028. And so I was -- [indiscernible] until you and I met, I would tell you, I didn't really understand what this is. So I would imagine there are people in the audience that feel the same. So can you walk us through what this is and what is a digital twin?

Yes, I'd love to. I think there's too many words whether it's Metaverse or this, that and the other that are used, which people don't really understand, people who use the idea of a digital twin because they've got a 3D model. A 3D model isn't a digital twin. It's a very complex level. And you can see that we've got 7 levels is how we bring this to life. The base is the catalog. And you desert talk about 2,200 stores. And in those he's got a variable amount of fixtures and a whole host of products, et cetera. So getting that database right in the first place, because if you can trust that, if you can build your stores, your fixtures in your products and you can place all of those, you start to get the basis of what a digital twin is. If I know the exact X, Y, Z position of every product, every planogram, every fixture, I start to get a whole series of spatial data that's never been available before, product adjacencies, planogram adjacencies. We start to be able to ask a whole series of questions. So once we've got that catalog put together, we need to be able to communicate and move the data really quickly, hence, our relationship with T-Mobile and that connectivity layer, so we can move things around. From a planning perspective, at the moment, there's too many people -- we can just leave it on the slide before, that will be great. There's too many people who are creating planograms. They're at headquarters. They'll create a whole series of planograms throw them over the wall in the hope that they're going to land and fit in a store. I've had too many stories where there's 1,000 calls saying, it doesn't fit, what do I do here? So if our store knows its merchandising capacity. If every fixture is built from a cut sheet, its linear square and cubic merchandising capacity. Now all of a sudden, the store knows what it can hold. So why would we spend less or more data. If it knows it's demographics and all these sort of things, why doesn't the store request its assortment. But if we can request this assortment and we've got a planning tool that's web native that's cloud-based web native, not a combination of Citrix or this, that and the other. And then if it's built in the right way, we can optimize and start to write automations because we know what the store is. We know what the products are and we know where they should be. So that gives us a whole planning layer. We take that up to the next level. So that means in the first part, we can create a digital twin, but how do we keep that up to date. And that's where we start looking at RFID. We start looking at robots. And we've got our own planogramming tool where we waive a phone in front of the products and through computer vision back to what we were saying before, it will recognize the products place an augment duality marker in 3D. And when I hit save, it instantaneously creates an editable relegrap. I'm always pleased when I got that sentence out, but if it's great to planogram it's created on the edge, I can compare that against the planogram that should be there. Now all of a sudden, and then my out of stocks, I know what's on shelf availability, what is or isn't there? And I can tie that to an ordering system. Now all of a sudden with that power of connectivity and knowing all of my stores, et cetera, I can now, whether it's daily, hourly, start to have the store tell me what's on shelf. So if I get through the course of the year, and I come to do my analytics and I've got my peers and my data. If I think I've sent a planogram them, there's been 4 products on shelf. If an average has only been 2, my analytics are completely wrong. Doesn't matter how good your analytics are if your data is incorrect. So that living, breathing digital twin starts to get a status spatially understanding facings, what's there, what isn't there, et cetera. And it starts to build a story which enables us to make really smart decisions, automate decisions. go to the next level in terms of insights. Insights to us means we can create this digital twin, means we can make some different changes, bring some new products in and send it out to 1,000 consumers just like that. We can have test that on their phone or if they're on the train on the way home or in the at home, et cetera. So from a research point of view, from a tracking perspective, we can now start to track people moving around a store. But if I've got a digital twin and I've got -- I can do that, I can now start to hotspot where people are spending most of their time. I've got all my data coming in from my products. So if now the hotspot of where they're spending most is where they're spending most of their time that digital twin thing will never grow -- but I can guarantee you, it's not. So that spatial data will tell us where people are, where they're spending most of their money, and now we get into a really rich conversation. That digital twin if it's kept up to speed, it means that we could log in digitally into attractive supplier any store, and I can now shop my local store with what products are actually available on the shelf. That's not me choosing something from a list and they're having somebody else make a decision for me. It also means I can optimize the pick group for an online order. I can get my people to go around and actually move to the store in this fastest space possible. You start bringing all of these layers together and the knowledge and insight really starts to grow. We bring that to life in terms of collaboration. We've built all of our software on a gaming platform. You'll remember Pokemon Go, I remember seeing that. And that being went crazy. Everybody was doing everything was doing everywhere. So my thought process went could I take a series of business applications, store planning, merchandising, marketing, et cetera, and building on top of a gaming platform. Well, it's taken us 5 years to do it. But all of you have got kids who have played Fortnite at home and when you say, Jake, can you come down, dinner is ready. Jake, they're not going to leave. Why? Because they're in a rich interactive 3D environment. They're shooting and killing people, we'll keep that to the side for a second. But they actually know how much ammunition has got, how much -- how little of got all that to be. That information that you got is fantastic. It's real-time data, real-time storytelling. That's what we want to bring to live here. So the store, we want the store to -- it's always had the information. We want to empower it to start telling us the story to unravel that complex DNA and let it start to come to life. So now we can fly over the store and the products, whether it's sales or movement or profit is now telling us this story. It's telling us where we should be going, et cetera, et cetera that collaboration leverages either visualization, true visualize and making it real or from a data perspective, how well we're performing. That's all B2B. And then GEO guiding gauge offer is a variation on and that really excites me when I start hearing your implementation of how you're doing that. because if we can guide you around the store, if you can engage with a product or more importantly, if they know where you are, we can get the product to make you an offer now we're into some really, really fun space. Well, that combination...

You're connecting it, right? And then in an area that traditionally wasn't connected, right? It was very static. So the fact that you're actually connecting those 2 points now refreshing it gives a store insight. It gives the store support center insight. It's really very powerful.

Depending on what question you're asking, it's a combination of layers 1, 3 and 5, 2, 4 and 6 and Roopi gives me allowing she is being nice to me, allows me to move data up and down seamlessly.

And I think, Mark, what you've said is so important, like we have lived in breathed planograms. And so at my local supermarket, I was shopping a few weeks ago and they had planograms up the typical. And then the associates were complaining that nobody at corporate knows what actually fits on the shelf. Typical. And I was like, wow, they really need this solution, right? Because now they can use this device, their phone to actually scan the shelf, the planogram comes up, sees what's missing tell some let's say inventory in the back room and they can fill the shelf. Now actually that associate might want to stay working there because we've taken that daily task that can be hard and automated it, right? And I think as a district manager or a regional you're walking in the planogram is not set or even the store manager. They can just take out their phone and see if it's set correctly or not instantly instead of where is my visual guy, is on paper somewhere else. So let me go into that, let me navigate my app, right? So it's seamless.

And it's the same planogram everybody seeing on any device, anywhere, that's the web native bit, which is...

But I'm kind of -- but imagine the idea of the employee experience then translating into the customer -- and so all of a sudden, you're articulating a story of how as an associate, how a brand is utilizing technology to improve their experience and therefore, the customer mean inventory management and the right product at the right time available to all and knowledge of it and kind of what you're describing with the layers. I mean, it sounds are kind of unattainable in some ways, yes, I know that it's real. It sounds like a dream.

One of the reasons I created 3, 4, 5 was to change that customer experience. If you're in front of a product, you can talk to it, it's best to do it through the phone because it gets a bit otherwise. But if you can talk to the phone and you know 1 of those 3 that you want. The chance of you're putting in your basket is just that much higher. That's why the whole GURA thing, geo thing that really excites me.

Thank you. So we have a few minutes left. And so I want to be able to, [indiscernible], just talk a little bit more about any of this other like smart data that's coming through. So you have all the layers, you have, I'm sure everything from Hey GURA, you have all this data coming through in your world. So how are you using that today?

Yes. So here's what I'd say, everything we've digitized things more than ever before, right? So what does that do for us is it gives us the ability to take it and then massage to get insights into what's going on. Here's what I'd say. I think you're seeing us make strides right now and the loyalty and the customer personalization spaces and really starting to gain an understanding for what our customers' needs are and how can we communicate to them more effectively. I still keep going back to the team member and the productivity of the team member in the store. That's where a big investment is being made right now. And it's I talked a little bit about Hey GURA and some of the computer vision, but we've also created a platform called TSC & Me. which is -- it's in its early stages, but the idea for it is it's really an interactive portal for the team member to be able to interact with their jobs, their career at Tractor Supply. So we're leveraging that information to push tests out, training out, things of that nature, just created an overall experience for them that's better. It's interesting when you were talking and you guys were going back and forth, we all have retail, and I think a lot of people in this room have a retail background. There's nothing that's worse than when you're with a customer and some things going wrong, right? So the vision that I'd say we have that I have in the technology department is that leveraging all this information should create better tools and services so that our team members and customers never have to experience that. Now obviously, that's not necessarily an attainable goal. But if we can help in any way, shape or form, that's how I see things focusing from our perspective for the future.

And the fact that you can say it out to the teams, we're developing things to support you. You told me yesterday morning, you'd already spent how many days in stores?

We spent about 50 hours...

By the middle of January, which I give you much credit for. And -- but if you can say that to them during those 50 hours, these are things that were utilizing, exploring, making your job easier and the power of those 50,000 people.

Well, you're getting constant feedback, we joke around about it sometimes, but a few years back, we developed a button on our mobile app that just notifies a team member through an ear piece that they're at the propane tank in the back. And think about how valuable that is this week when it's 10 degrees outside and I need a propane tank filled and I can hit a button, somebody comes outside, fills it up. So those are the types of interactions you can't predict when you're in a store to get those types of use cases. And then they turn into real things. And think about the meaning for the customer, for the team member makes them efficient, so they're not standing outside of the cold and makes it better just all together, and they can go out and check the personnel with a mobile device. So...

Well, we are out of time. So thank you. I wanted to thank T-Mobile for this, make sure that you visit them at booth 6703 and learn more about what you can do for your retail business. So thank you, everyone, for attending. Have a great rest of your conference.