Snowflake Inc. (SNOW) Earnings Call Transcript & Summary

Good morning, and welcome to our session best practices and cost-effective and sustainable e-commerce logistics. I'm Phil Godden from GM Envolve. And joining me on stage this morning are Mark Ang, Co-Founder and CEO of GoBolt; and Dustin Jones, Co-Founder and CEO of Frank And Oak or Unified Commerce Group. In 2024, sustainability has become a hot topic for all retailers. Based on several things, increased environmental awareness, improved technology and a better understanding that your customers want to do business with the firm that shares some of those same beliefs that they do. In 2023, Delight released the study that showed that 73% of company's CEOs are increasing their investment in sustainability projects. Unfortunately, the same study also showed that most of those companies were having trouble getting those projects off the ground. Today, in this presentation, we're going to talk about some exciting ways to combine technology and partnerships to move your sustainability goals forward. At GM, we have some of our own sustainability goals that are challenges. We envision a future that has zero crashes, zero emissions and zero congestion. While we work every day with drive and teams to make that vision come to life, we'd like to partner with other companies like you guys to do the same thing with your objectives. GM Envolve is the platform that has created inside GM to do that very thing. It brings together all the various brands and tools under the GM umbrella in order to work together to solve unique business opportunities for our customers. One of those parts of that portfolio that plays particularly in the sustainability space is the BrightDrop Zevo. Zevo is designed ground up to be the safest, most secure and efficient delivery vehicle on the road today. Since we started putting Zevo's on the road in 2023, they've racked up over 5 million miles in everyday business operations and we continue to evolve the platform. The Zevo comes in 2 cargo sizes. It comes with 2 different weight classes and also two different battery configurations. So it can be configured to a lot of business requirements. And now Mark is going to show you an exciting example of sustainability and action and even a few Zevos in action.

Awesome. Thanks, Phil. So GoBolt started off in 2017 as a valley storage company, which had basically nothing to do with 3PL services that we offer today. The company is called Second Closet. It was a storage solution that would come to you, pick your stuff up, catalog it on site, photograph it, bring it back to storage and then return it to you whenever you want it and the whole idea of that business was to help folks live a less encumbered life. And so we built the business up into 5 major markets in Canada and then started to expand it to the U.S. but not before long, we had a lot of our power users on the consumer side, inevitably be decision-makers at retailers and brands that we were being pulled into service their business solutions. So companies like Channel, BMW and WeWork would use us to manage excess retail goods, furniture, et cetera, and move it around to install and manage logistics for them. Before long, we started to look at the consumer storage side and say, we're really helping people hoard their stuff more efficiently. And that's not really the legacy that my Co-Founder Hendrick and I want to leave. And so we decided to, in 2019, repurposed the business to be a full end-to-end logistics provider, where we had done big and bulky direct logistics, reverse logistics, warehousing for individual SKUs and we said, we kind of see more value creation here on the 3PL side, and the last-mile logistics side, let's focus our efforts there. But let's be purpose-driven in all that we do. And part of that purpose was to also reinvent how we did the logistics. I think at that time, Second Closet had probably about 75, 5-ton trucks. Our fuel bill was in the hundreds of thousands per month and we're just thinking to ourselves, this is not really great from a cost perspective or a sustainability perspective having both grown up sort of at the turn of the century and born of the '90s, we thought there was a better way to do this and our legacy needs to be sort of something that we think about. And if we can challenge the status quo, let's do that. Now if you rewind the tape to 2019, there really wasn't much going on in the commercial EV space. Tesla is sort of still all the rage. It's mostly focused on consumers. Most major car brands hadn't really started to develop software or hardware around this. And so we started to be the guinea pig for EV manufacturers for trucks and commercial applications. They had a lot of bumps and bruises along the way. But today, I think we're a lot better for it. A few years later, we have a number of trucks on the road. We have proprietary technology that we'll talk about and we think that we're leading the charge in sustainable logistics, which encompasses the last-mile component but also encompasses the inventory management and fulfillment side, and GoBolt does both. We've taken containers from overseas. We stock them in our over a dozen warehouses across North America to forward place products, zone skip it, but then also manage the last-mile, importantly, in an increasingly electric way and that helps us achieve certain cost per unit targets that our merchants have and it helps us deliver with speed and with elegance through EVs on the last-mile. And so most importantly, we set quality objectives with our merchants, sustainability metrics and, of course, cost metrics. We try to think about how we can manage that across our portfolio of infrastructure. So far, we've done over 0.25 million last-mile deliveries on EVs since we started this in like late 2022, early 2023. This will soon be a monthly number for us as we take delivery of our next kind of ship of POs this quarter. And we hope to eventually get this to a weekly number and eventually a daily number of EVs as our logistics becomes nearly 100%, fully electric in our Zone 1 and 2 primary market areas by the end of this year. So far, last year, the equivalent was, we took about 18 vehicles off the road. And again, if that becomes a weekly and then daily number, we think it will be very impactful at scale, but this rolls out to about 81 tons of CO2 so far. One of the reasons our partnership with BrightDrop is so important is that we've been able to manage big and bulky deliveries and small parcel delivery. So whether it's poly bags and small boxes for apparel, electronics, all the way up to sectional sofas and marble top tables. We've started to leverage the same truck to be a homogenous fleet for us so that we can scale it across our big and bulky portfolio and our small parcel. And that gives us flexibility in our asset utilization, which lets us ultimately drive a cheaper cost to our merchants and a more consistent electric delivery system for the shopper. Now we could have the best reading software for ICE vehicles on the market today, and there's a ton of really great ones out there. But the problem is, if you leverage that same software to manage EVs, you will almost surely fail, and that will drive costs up, and that will drive quality down. And so we've got a team of 40 developers back in Toronto that help us build proprietary tech on a daily basis. One of the things that we're proud of working on over the past 4 years is an EV-specific reading engine that takes into consideration range, payload, driver behavior, et cetera, to make sure that we can route deliveries in a way that maximizes our EV footprint, optimize quality and, of course, cost for our merchants. So what this might look like is Phil might be really good at feathering the accelerator, but really bad at regenerative braking. Whereas Dustin might be really great at feathering the accelerator and using regenerative braking, and I might just be bad at both. We're going to get different range out of the same truck. And so that's important because we want to be able to go as far as possible with the EV so that we can, again, have great asset utilization, have less trucks on the road, et cetera. Thing with these vehicles is that charging infrastructure isn't developed well enough yet. So we like to route on a single charge where we go out on the same charge that we started the day with versus having a top-up throughout the day. It lets us get more value time on road versus having to spend 30, 40, 50 minutes doing a top-up charge somewhere where you may not even get enough range to get back to base. The nice thing with the BrightDrop, it's got the best range that we see in the market for parcel vehicles. And so it lets us do that with a little bit more ease and grace. So our reading team is extremely, extremely happy about that because we get about 400 kilometers, 300 miles versus the previous vehicles, which are in the high hundreds of miles. And so this is the tech that we built. It helps us optimize on a daily basis and incorporate some of the cutting-edge stuff that we're working on. The thing with the tech though, is that it could be amazing tech and in the most perfect way, but if the dog isn't run, the race doesn't start. And so we need a great vehicle to support that. And so far, what we found in the market is that the BrightDrop does that. It gives us the most amount of like reliability and quoted range. I've driven this around Toronto. It's got haptic feedback in the driver chair to alert you to different obstacles, which is awesome. And there's like a ton of great displays embedded into the kind of pilot system that lets you really like navigate with ease. And so all of our drivers and our team members and partners that use these trucks on a daily basis, love them, and they have the added benefit of looking super cool. So when you're rolling up to the customer's home, they really kind of demonstrate the brand and innovation well. Importantly, like customers can see where we are in real time on our kind of driver app and on this consumer-facing tool. So it's an Uber-like experience for them, and it let them kind of come to the front door and see the trucks in real life. And last and most important, I think the connectivity between BrightDrop's API and what we're working to do to our own will let us kind of augment what we can do from a zero emissions perspective. And that's good because it then lets us push the pace on where and how far we can go with these, which lets us provide more and more certainty to our merchants, which lets us provide a better cost base for them as well. And ultimately, I think in this day and age, economics are more important than ever before, the ability to give your finance teams zero fuel surcharge, consistency and a fixed cost base for execution, I think, is pretty incredible. It's one thing that we're uniquely able to offer, I think, than anyone else in the market today just because we have such a high share of EV deliveries and we're very comfortable managing the variability of fuel for the few ICE reds that we do run which should be zero by the end of this year in our primary market area. So we're really stoked about that and happy to chat further. We'll be at the GM booth later. So if you can come by, we can chat a little bit more tactically about some of those things. But for now, I think I'm going to pass it over to Dustin to share a little bit about how we partner together from a kind of tone at the top to push the pace on sustainability. And for those that aren't familiar with Frank And Oak and UCG, they've got a really good portfolio of brands that they're building that have this focus, and we're really excited on part of Dustin.

Thanks, Mark. First of all, I want to congratulate Mark who just got Forbes 30 under 30, and that's a big deal. We met him 3 years ago and I was impressed from him from the first discussion and my teams were. I'm going to talk about GoBolt, the partnership and then I want -- but first, I want to give you kind of the backdrop of the problem as the CEO of the company that I was trying to solve and prior to running Frank And Oak and building this company, Unified Commerce Group, which is the owner of Frank And Oak. I was working for Macy's for a very long time and living in Asia for 5 of those years with Macy's working with the Alibaba Group. And there was no -- in China, everything was about how many orders you would get in a day in a single day, everybody knows singles day, and it was like how many millions of orders would you get in that day. And we would celebrate the millions of orders and never talk about anything behind the consequences of that order. But that same day, I'm celebrating the order. I'm looking at the air quality outside to see if I can go for a run. And some days, the answer is yes, and some days, the answer was no. And so when I move back to the United States and founded Unified Commerce Group, the simple theory was as the world becomes more accessible to everyone and we all have been to bally or are planning bally and we've been to Italy a number of times, and the word just seems like you can get there. And millennials are prioritizing travel over homes and other experiences, what happens is they get exposed to many, many, many things that they then want to consume, including brands. And so whereas single brands dominated global consumption in the past, Global consumption will be dominated by many, many, many, many brands that fragment the market share much further than it had done prior. And so as the number of brands gets greater and the volume of those brands gets smaller, we created a company that focused on empowering what we called smaller brands, which is simply, call it, $50 million brands instead of brands that we're looking to be $1 billion and in the formation of this company, we wanted to identify next-generation brands. And there were a lot of targets that we looked for in the customer, and Frank And Oak was the first one. And the theory was that in order to be able to empower these brands, we needed to be able to create an ecosystem that enabled these brands to make higher quality choices that in their isolated cities where they were born, they wouldn't have access to. And so they might think that an A decision is an A decision, but it's actually a C+ decision. If they had known that better options were available to them, if they had had talent that could give them that visibility. And so briefly, Frank And Oak is probably the most sustainable brand I've come across, and I've looked at hundreds of them now across the world. It was founded in Montreal by Ethan and Hisham, 2 really dynamic founders that exited the company when we acquired it. We acquired it at the very tail end of 2020. It's a fascinating brand because it's perfectly 50-50 men and women, perfectly 50-50 stores in e-commerce and the advancements that the team organically made in sustainability without really even tip-talking about it, I found to be phenomenal. So 100% responsible products. This site is 15 stores, we'll have 17 in 2 months. And it has incredible awareness in Canada, but 30% of its business in the United States with New York as its most important market. And I'm getting to the global partnership, but I think it's important that the backdrop of the customer is important because GoBolt cannot exist and EVs cannot exist unless there's an end customer that is going to leverage it. And so my job is to build this customer base. And when we did a study on sustainability in the United States, we surveyed thousands of, call it, well educated, 100,000-plus 35-year-old women to understand the psychology of their prioritization of why they buy and what they buy, when they buy apparel. And this is just specifically to apparel. And what we were looking for is where does sustainability fit in the matrix of their choice, knowing that they have a high income and it ranked sixth. Brand was by far the most quality fit, price all mattered more. And in the end, the #1 thing she said is, it matters out of my mouth, but in my wallet, it ends up not finding the priority. Other things make it more important. And so the sum of that is like if we want to be sustainable, if we want to create change, she's going to make a decision for our products likely not because it's sustainability, probably because it's an amazing brand, very attractive product, fits amazing, feels amazing and their other quality is amazing. We just had our most sustainable quote that we've ever made, go viral. And we've been trying to sell it for 2 years. And in 1 day, we had more orders than we had in a year from a TikTok where she called it like wearing the most comfortable Duvet cover on your body and to use these adjectives of all these things, and none of it was sustainability. She's not one adjective said sustainability, and we sold more in 1 day than we had ever sold in a year. And so it's up to us to kind of create these sustainable solutions and do this value add and identify a customer that is willing to pay for that. And so as we did that, One of the things that we found is that the customer is changing and the types of products that the consumer changing and they're much more into this hybrid lifestyle, they're still living in downtown. The 25- to 39-year-old of my generation versus this generation was looking to save for a home. This customer is not. They're looking to upgrade their lifestyle. They're looking to be very intentional on their purpose. They're also very creative. They're not looking for investment banking and lawyer jobs and other things. They are not looking for a corporate office. They have 2 jobs, normally, one they get paid for and one that is their passion. And they identify with both. And so this is kind of the profile of why we chose Frank And Oak and a little bit behind the other brands that we chose. And we had a very terrible choice. $50 million companies have terrible choices around logistics. The choice is to fulfill it yourself out of your office because your e-commerce is still sub $20 million. And so you literally have companies that are picking and packing their own products they're using unintelligent manpower to do it in terms of how they prioritize planning labor and what materials they use to pick and pack. And -- but they will sign a card that says, hey, thanks for shopping with us and customers love that. But the inefficiency of that whole process is enormous. Or they'll choose a 3PL and a traditional 3PL is talking about cost of fulfillment. And they're showing you their big warehouse and it's somebody that's 52 years old and has been in the industry for 20 years or 30 years, and is pitching you on predominantly cost and you're not a priority because of the number of brands that are in that warehouse. And so for the products that you need and the custom services that you need 3PLs become a pain in the ass. And if you talk to any founder of a company of our size and the companies we buy, and you ask them their biggest problems, usually the problem number 1, 2 or 3 is their 3PL. And so when we met Mark and when we met GoBolt, we were really impressed because not only did they check the box on price, but then all these other visions came with it around how we could use EVs to do all of the trade areas that we operate. And we operate a very omnichannel business. 100% of our products is available to 100% of our customers and 100% of stores, and we ship a great deal amount out of our stores to our consumers under algorithms of getting it to them in faster and better methodologies and so not only do we ship from the GoBolt warehouses under these big GoBolt EVs, but we also ship from our stores through this process as well. So being able to have an omnichannel solution that delivered a carbon-neutral experience for our customers to be able to empower a young dynamic founder with his vision that, in my opinion, backed by great private equity is -- can afford to make some mistakes along the way, which just -- Mark was just telling me about the ED journey before we sat down, and it wasn't like a perfect journey for him to get to BrightDrop right? And so for him to be able to get to BrightDrop took iterations of this experience to be able to deliver our customer experience. which they're doing a great job of that, which is why I'm here on the stage, promoting this and talking about sustainability and logistics. And I guess the message from my side is that it is possible to run at the same cost or better than what you're running today it's possible to deliver the same type of customer experience and better than what you're getting today and to make better choices doing it and it's because of the work that these guys are doing and brands like us who are cultivating customers that we have that love that change in the experience and prioritize that and their shopping behavior, albeit not number one, that can create this innovation ecosystem that ultimately allows us to no longer accept the type of footprint in logistics that we were getting and empowering before, and then tying that back to that conversation around millions of units sold. Hopefully, when our company is a bigger company, and we've got 10 of these companies today or in the future, hopefully, when we're talking about millions of things sold and thousands of things shipped in orders, we're also talking about the change that was created from that in the different layers of the sustainability ecosystem that we partner in and not just the customer-facing one, which is like this is circular genes or circular shoes or cruelty-free jacket. So this is just a little bit about Frank And Oak and what we've done since we started. We've -- I don't know if you want to go into this slide.

We can really chat about it. Yes. so I mean, Frank and Oak, as it continues to grow. And as ECG continues to acquire more brands, this impact area will increase, but we've done over 50,000 last-mile parcel deliveries for them on fully electric vehicles. During peak season, our whole company has this habit of joining in on the operation. And so I was running a route and I was delivering some Frank And Oak packages. And it really -- like the customer does really value it at the final mile. These trucks are extremely quiet. You just hear the wind. Customers love it because they see the impact in their communities. These vehicles are super safe. They have a ton of different features within them. And they just look cool. And so above all else, you get the same sort of like logistics experience that you'd expect from any other provider, but you get this augmentation. I think -- what I found is that most brands are shy about having two conversations at once, the cost conversation and the sustainability conversation. Those are often at odds with each other, but we make that, that's a construct. I think bringing it together as one is critical. In fact, they actually play off each other. Like I said earlier, the elimination of fuel surcharges allow us to be almost half the cost of Frank And Oak other shipments on average through third-party carriers that are very traditional. And so the fact that we can deliver that across such a wide footprint in North America, I think speaks volumes to the fact that we partner deeply on a supply chain strategy, that can be replicated. And so we're excited about this impact there. We think this will continue to grow, and we're really stoked about what 2024 has in store. Because I think if we all look back at 2023, it feels like it's come and gone in a split second and was [ rought ] with a lot of change. I think 2024 is a year that we can start to renew, improve and build, but keep a lot of those positive lessons learned, like unit economics, sustainability matters, et cetera, from last year that we can then propel forward here in 2024. We have anything else to knock on?

I think that's it. Thank you all for attending our session. I think all 3 of us will be at our booth for a few minutes after this. We're at 6149.

Alternatively, we're on this thing called LinkedIn where you can also reach out to us there and ask us any questions that we'd be happy to answer. So look forward to chat with you all soon. Thanks.

Thanks, everyone.

Welcome, everybody. Welcome to the one of the probably final sessions for you of the NRF conference. Hopefully, everyone is enjoying their experience here. I know it's been eye-opening for me in a lot of areas. We have an amazing panel today, and I hope you're excited for this. Snowflake here is happy to host several of our customers to talk about a couple of key topics. I'm Ross Armstrong. I run the retail and consumer goods vertical at Snowflake and this is many years at NRF and excited to be here again this year. The group of panelists we have are from Albertsons Media Collective in NIQ, which some of you might remember as Nielsen IQ, the Republic National Distribution Company, CVS Media Exchange and LiveRamp. So it's going to be a busy session and what we're going to do is we're going to do several fireside chats, and so we'll have people coming in and out. But hopefully, if everything goes seamlessly, you will get a lot of great information. And as I always try to think of these things you're going to have a lot of questions walking in. If you walk out with more questions than you came in with, the better off we are. You can hear me okay? All right. Thank you. So without further ado, I'd like to welcome Evan Hovorka from the Albertsons Media Collective.

Thank you. All right. Testing. Okay.

We're good. All right. So, Evan, I think it would be great just to start quickly with your background, your role and a little bit about the Albertsons Media Collective.

Absolutely. Yes. My name is Evan Hovorka, VP of Product and Innovation for the Albertsons Media Collective. I've been in retail for 18 years, 16 of those at Target or a area where I built out a lot of the brand marketing channels and then eventually what led to Roundel which was an in-house kind of evolution of the retail media network at target. So we had a lot of years in retail media, a lot of years in just retail marketing in general. And kind of the one consistent piece of that journey has been the need for innovation and the dependency on data, fast data in the hands of the right practitioners. So excited for today's panel.

Excellent. So I think Evan might be understating is -- how well known he is because one of the things he's done is taken his innovation garage and taking it on the road, which I think if anybody was at can last year, you might have seen that, a really innovative idea as well. So I actually have a picture of your garage here, I think. We'd love to have you talk a little bit about what the idea is and how it's been executed.

Yes, absolutely. Growing up small farm town kid in the garage a lot, just fixing everything that broke, motor bikes, tractors, you name it, and I kind of had a love of taking things apart, learning how they work, getting educated, breaking things may be worse than they were before, but then learning from that experience and I think I carried that through to adulthood. And the houses I've lived in, I've always had a garage space where tools, innovation, usually some -- maybe some scotch or whiskeys in there, too, for some fun, but I always love to tanker build prototype. So I love the 3D printer space when that was big, figuring out ways to use technology to solve problems, usually from a personal and selfish level. But as this COVID evolved and workspace has changed, when I moved to Albertsons, I still live in Minneapolis. I use the garage as really a meeting space to host innovative companies to help us solve problems and I think we'll get into what some of those problems were. But even companies like Altoro, join me, Pinterest, Google, folks that are really also trying to figure out what is next for retail media. How do we solve it together? There's not a lot of off-the-shelf products that you can just plug and play. And so having that collaborative space where it's not a face-to-face meeting room, it's not a sales conversation where you're going to buy this off-the-shelf product. We're just going to sit down, hold hands and put all our LEGO blocks on the table and talk about how we can build better models together by understanding each other's pros and cons.

It's a great idea, and I love it. I love -- I've never seen the garage live, so one day, hopefully. So we'll get into the retail media network of the media collective in a second, but maybe you could start off a little bit with the data journey that you've been on.

Yes, absolutely. So this is kind of the core Snowflake conversation. I mean, data is the core of any retailer long before retail media came along. And that data has been quickly evolving to service things like websites and apps and everybody here. I can appreciate what item data looks like, images, price points, coupons. That all seems pretty simple, but when you're talking about 1 million-plus SKUs across 2,200 stores, all with varying price ranges and availabilities, sometimes sourced from different distribution centers. That data collection, while it's the core of what our consumers are buying, is really complicated. And so then trying to centralize it, standardize it, make sure everything is available to put media on top of it is the core of how retail media gets started. You got to have the items, because we are very capable at selling products. So those product data points are critical. That's kind of like 101. I think the audience would go to sleep if we got too much deeper into that topic. So then what happens next is how do you tie that to the CRM system. So now we've got those items in the baskets of our customers. Fortunately, at Albertsons, our loyalty program is really well adopted. Our transactions are identified at about a 93% plus rate. So we can show which consumers are buying which products, which brands, which ones are sensitive to price, which ones redeem coupons, but all that now means we're manifesting data up at a higher level. And not only that, then we want to use that for marketing purposes, analytics, research and really partner with our CPGs that want to run media through us. So that data has got to take shape into identity graphs audience for targeting measurement solutions that can show the value of that media investment. And so you start to introduce things like clean room or fast-moving data in transit, where it's encrypted, but still in service of the consumer. So those now are getting into 201, 301 types of applications of the data, but it all starts with having accurate fast-moving data at the core and then layering on top of that with ideally as few as systems as possible and then making the media shine on the back of that data.

Great. So step one is let's get all of our data in the system and make sure that we've got our ecosystem of data providers there as well and then you can only then activate that for your -- for whatever purpose is. And so obviously, you mentioned the media network, and that's the core of your business that you manage. So maybe you could talk a little more. I think a lot of people in the room are curious. I know we've got valuable data. I don't necessarily want to monetize at all. Some of it is our secret sauce, but some -- I think we have real value, but I don't really know how to make that happen, right? So what -- once you've got your data in a data platform, how do you then take that to the next level and really activate the true retail media network?

Yes, there's a couple of simple things. So we'll touch on and we'll get into a couple of complicated topics on top of that. usually, the retailer will have an enterprise marketing team, and they're there to drive foot traffic into the store, promote it to own brands, promote a new store launch and they're really looking for category lift, store lift. When you get to the RMM level, sometimes there's a layer of granularity in those retailer systems that doesn't support brand-specific requests. So Pepsi, for example, is not interested in Albertsons category growth in soft drinks. They want to know what did my shoppers buy? Are they buying incrementally more of that? Am I gaining category share and share of voice? And so the specificity of a system that would measure soft drink sales for a retailer has to double-click into those specific SKUs. And then especially when you're getting into the marketing side where they're only wanting to talk about the diet gluten-free protein shake. And it's just these literally these 7 SKUs. Those are the ones we have to market and put the media behind and then only shows sales of those 7. So puts an extra strain and tax on a retailer's traditional system, which just means faster data -- faster servers, maybe more specific analytic skills to help show the brand, not the category, what the performance is. But I think where we're going with this is all of that needs to manifest within the retailers owned and operated property, so website app. At Albertsons, we're fortunate to have 12 big brands: Safeway, [ Jalisco ], Albertsons and a bunch more. And you can imagine putting media on those platforms and apps, I'll say it's relatively easy, although it is a lot of work, but we own the end-to-end ecosystem. And that's a wonderful place to promote a new protein drink for a soft drink company. The growth, though, if we stayed on platform is very limited. So I would say within the first year, RMNs of any size are looking to move off platform, and take that audience, that targeting that measurement into the platforms where those shoppers are spending more of their digital time. So Pinterest, TikTok, Meta, Google, Trade Desk, Open Web, and being able to do that then requires another layer, maybe we're getting into 301, 401 of encryption, data distribution, data onboarding, LiveRamp is coming on here in a little bit. They're a great vendor for that. Snowflake is a great enabler of that. But you have to get the data at that granular level with the consumer background behind it safely into these other platforms with efficiency, right? So we're talking thousands of campaigns happening concurrently. And now we're at a level of really ad publisher and ad tech that a retailer traditionally isn't staffed to support. So now you're looking at different engineering or different partnerships to make sure that, that new capability is pretty scalable.

And maybe you mentioned Snowflake, obviously, we're interested in hearing more about that. So tell me a little bit about how Snowflake helps you enable some of those 301, 401 capabilities we were talking about?

Right. I mean the clean room concept is probably the greatest, but there is core RMN support that Snowflake offers. But getting it in selfishly for my needs, getting it into the hands of our media practitioners, safely, securely, with as few as hops as possible is at the core of any modern retail media network. I mean gone are the days of bundling up audiences and shipping them out over 2 or 3 days, the decay of that data is occurring, control of that data is occurring, being able to do that in a centralized clean room on an identity that's anonymized with the reduced hops and as close to live data as possible, just creates a much better platform to enable things like AI, FastMetrics, like trying to do that on audiences that have been copied and pasted 2 or 3 times across different ecosystems. You've created this kind of codecs and translation layer that's going to hurt performance. So centralizing it makes perfect sense for privacy, and it makes great sense for media performance because we just have such faster access to the truth.

Excellent. And so obviously, I think you mentioned you were at CES this past week and now you're at NRF. You've been to a lot of kind of retail-focused conferences. What are you excited about? Like what's coming up in 2024, either for Albertsons media or just in general for the retail space that you're excited about?

Yes, there's 3 key pillars that we're excited about. One, is this evolution of media and merchandising. The reason that brand is talking to the retailer is, because they're looking to move units off a shelf, maybe grow their shelf space. And they really have leveraged that core merchant relationship long before I ever showed up. And so that's the core of why the retailer exists, and that's the core of why the shopper comes to the stores is to get that product and that quality and that price point. Bringing that relationship closer to the media side really is just an honor of what the brand is trying to do. They want to move units. We've required them to invest in media and start talking about things like impressions and clicks, that's not what they're here to push, right? Pepsi doesn't cash checks on clicks and impressions. They need to see product leaving shelves and ideally in an incremental way. And so merchandising plus media allows the retailer to show up with our best foot forward in that total brand relationship. It does require a little higher-level conversation. We call them joint business plans, but bringing in the top level execs from both sides, so you can plan out the whole year. Versus sometimes media is on this short run cycle every 6 weeks. The merchants run on 12-month, 18-month cycle. So a lot more strategic, a lot more thoughtful in their year-long plan. The media should just plug right into that and support any of the merchant decisions. So that's Pillar 1. Pillar 2 is channel expansion. Like I said, online versus off-platform is important but off-platform means many, many things, and so social is easy to understand, but there's a lot of social players. So we're going to grow into some of the social platforms that we're not in today. We'll grow into CTV. CTV has been a difficult channel, I think, for retailers that sell primarily grocery. The margins are tough, but we've got some creative inspirational ideas that are going to help push that forward. And then in-store would be the other channel expansion topic. The stores themselves are great places to have conversations with the shopper. If it's incremental and not disruptive, which we've probably all seen some of those experiences that feel a little distracting, our strategy has been one of, let's be thoughtful with how we treat our customers in our stores through our guests. So we should be only helping them or keeping things neutral. So things like you're in the avocados, they're on sale, great. Here's a video of maybe some different recipe options for Guacamole that you haven't thought of. You can engage in it or ignore it. If you want to engage, maybe there's a QR code, gets it into your basket. So channel expansion. And then the third one is really around data collaboration. So this concept of clean room has been around forever as well, but you've got to have it in secure, affordable, fast-moving systems, so that we can partner better with our social platforms for closed-loop measurement. We were the alpha partner with Pinterest on closed loop for social, a very much in-demand product for brands, who want to see their incrementality and we're continuing to push the envelope with Trade Desk, how we allow autonomous access to audience and measurement through that very popular platform. And then our big partnership with Meta and Google is still evolving around things like clean room identity, safe and secure identity mapping, all in service of what's coming in 2024, the cookie apocalypse. We think we'll shine a brighter than those reliant on cookies, most retail media networks will, because it's all dependent on first-party consented CRM systems tied to a reason for being, right? There's a lot of companies that have a full path on the United States consumer base. But if it's not tied to a system where they're converting our customers shop 2.6 times a week, then what does it tie to? Like a home address, a survey, credit score. This is tons and tons of records of SKUs tied to a human, tied to contact information in a fully anonymized secure system. And they're going to keep coming back, right? Because the reason for being is, oh, you're a grocery store or your convenience store or a gas station, whatever the retailer is, that's the magic, right? It's not just the identity and the ability to activate on the identity. It's the connection back to the conversion, which is what the brand cares about. So any hop between your identity and the conversion, the reason for being is going to be a tax and one that's going to be penalized because of cookie deprecation.

Well, great. Evan, thank you so much. I wish we had more time, and so much more I'd like to ask you. But if we can give a quick round of applause for Evan and his garage.

Thank you so much.

Thank you.

I'd now like to welcome up Dirk van Renesse from Nielsen IQ and -- I'm sorry, from RNDC and Troy Treangen from Nielsen IQ. So let's start with Troy. I'd love to just briefly introduce yourself and tell us a little bit about -- I mean, I think your title of CPO kind of explains itself and maybe a little bit about your scope of control and kind of what you're focused on within.

Sounds good. So I'm Troy Treangen. I'm the Chief Product Officer at Nielsen IQ, as you can probably imagine or you probably know. I know, we do -- we operate in about 90 markets all over the world, measurement analytics, price promotions, et cetera, et cetera. I'm accountable and my team is accountable for all the products that we make across the board. So we're going to talk about some of those here in a little bit.

Great. So maybe we can start with the power of data sharing and what the value has been to NIQ around data sharing?

Yes. So again, Nielsen IQ, our biggest business is actually measurement, right? So you probably know we collect data in many markets. We can equate in 2 ways. We have retail measurement data, which is a roll-up of stores, which is probably the most common that everybody knows. The other part of it is we have consumer panels or omnishopper panels in many markets as well. All of that data, we obviously collect, we create the products that we create and then we share that data with our various clients and multiple mechanisms. Obviously, our tools, so we have our own web interfaces to do those. That's one mechanism. The second mechanism is through our analytics capabilities. So sometimes somebody wants to do a -- like I said, a the price promo analysis or a study or something along those lines. The last option though, which is transforming pretty significantly is our customers need the data in their data lakes or their environment so they can merge it with other data sets, do other things with it that maybe are not use cases that we focus on. And historically, we would do that by just extracting all kinds of data in a flat file and send it across. That is not the best way to do it anymore, right? I mean the data is getting way too big. The data is changing way too fast and the cost to keep it up to date in a mechanism where you're actually creating a file and shipping it off is just very inefficient. So what data sharing brings, like in a Snowflake data share environment is our clients can now access their assets that they license from us in real time in our environments directly. So instead of having to say, "Hey, Troy, give us an extract of that data, and we'll process it and we'll do it a day later, 2 days later", they can actually change their processes or change their applications, their analytical tools to connect right to our environment, access the Snowflake data share, and then they can perform all of that, whatever their analytics or things they were doing way ahead of where they used to be able to do it time-wise? So that's where the value ultimately comes in with, again, Snowflake specifically and what we've developed with them.

And for those that are quite aware of how we do data sharing, the data never moves from your environment. It stays within the control of your 4 walls, stays within your governance and security model, but then it can be accessed by other Snowflake customers instantaneously. So you keep the control, but then you have the speed that you're looking for to make sure you can use that data effectively.

Correct.

And this leads me right into NIQ Connect. Maybe you could talk a little bit about the Connect product and we'll turn it to a mutual customer and talk more about it, but a little bit more about in NIQ connect in particular.

Yes. So we've been on a journey. We've acquired many companies over the last several years. We've also just recently merged with GfK, which is a tech and durable side of Nielsen IQ at its heart was FMCG based primarily, but then we just merged with GfK, which is tech and durables based for a lot of the same capabilities that NIQ has. We've been on a journey for the last 2 years to take our Connect platform is what we call it, which is our cloud-based capability and roll it out everywhere around the world. So now we're at a point where one platform is working everywhere. Now when I say everywhere, there's 2 caveats. One of those is China, and one those is Russia, but there's other limitations and issues of why that's the case, but I still say the phrase everywhere just because it sounds better. But in reality, we've rolled all that out. And one of the backbones that we have as far as our scaling capability, our data warehouse is Snowflake. So Snowflake is something that we do license to actually make that engine work. If you think about how much data we actually process, you guys would probably be pretty surprised. We collect, like I mentioned earlier, in 84 markets is where we collect retail measurement data. A lot of times, we get transaction log data for many of those retailers. And we process, on average, 16.7 trillion transactions a week to be able to -- globally in order to get their outputs or analytical outputs to the clients that we support. Now that number might sound maybe not that big to some -- but just for reference, like all of the 3 largest credit card companies process 6 billion transactions a year combined. We're processing 16.7 trillion transactions on a weekly basis to make this work. So scaling is a very, very important part of our ecosystem. And given that we moved all of our stuff to the cloud now and one platform everywhere in the world, we had to find an engine that could help deliver that. And that's where Snowflake is what we've chosen to do that execution and scaling. And that's what is -- again, it's one of our -- it's our core backbone of our product at the end of the day.

And building the product and scoping it and pulling that value is one aspect of it. But the next question is really when we actually put that into effect. What does that mean? So I'll turn it to Dirk and maybe you could quickly introduce yourself and talk a little bit about your organization. Let's sure everybody is aware of the RNDC.

Sure. Good morning. Glad to be here today. So I'm Dirk Van Renesse. I worked for a company called Republic National Distributing Company. We're one of the largest privately owned distributors of adult beverages in the country. So I got a great job. So sitting between these 2 guys, it's pretty fun to bring all of that together. My role in the companies, I head up all the category management processes I have a team of over 100 that we call on customers around the country, really consulting on their wine and spirits and beer portfolios in either the shelf to the consumers and a lot of that transaction that Troy talked about is we use that daily. So between the partnership with NIQ and Snowflake, it's all about speed. There's no question about it. We actually coined a phrase in our office don't care about insights anymore. We call it cross insights. Every UPC that we manage, we have over 16,000 brands and over 100,000 unique SKUs that we sell on a daily basis in over 40 states in the country today. When you think about that item with having over 450 unique attributes, there's a lot of fast things that happen with our data, and that's why we need the speed and the insights from that data. People ask me all the time, how do you really want to use that? And my job is really a business case. It's what's important for us and for those of you going on this journey, I highly recommend that you have a sponsor on the sales side. You need somebody to understand how the data is going to be used. We don't need another dashboard. We have thousands of those. We can't read pie charts anyways. So we need something that's executionable, something that we can get to the sales force and something we can actually measure back on what was -- what happened on that. I can give you a great idea. I mean I won't use New York because it's snowing here today, but [indiscernible] I live in Atlanta. So let's say, Atlanta Saturday, it's going to be beautiful. And let's say it's going to be 60 degrees. You know what? I have over 500 restaurants that have patio bars. So we want to go after those patio bars. It's going to be nice outside. We have aged inventory on Pinot Grigio and [indiscernible], and we want to get that out with a decent price, get it to the marketing, you get all the table tents made, have all this done by Friday and get it to the reps for execution and then be able to measure that on Monday morning on what we did. And then not only within those tools, but actually understanding who those customers are and where they live and what they shop for, so we can actually tweak what our assortment looks like. And on a high level, that's what we do. And we've actually found, at least for me, I think I turned into more of a governor. I mean, I spend more time lobbying my IT team teaching them about the business, because they really need to understand how we're going to use this in the workplace. What exactly are we trying to get to? You have to be very specific about your approach. I just can't go, yes, I need a chart or I need an Excel sheet. No, I need it. This is how I got to use it, and this is exactly how it's going to be presented and I have to be able to score card those results when they come back. And I find that through a sponsorship that we do about once a month, we literally present like we're presenting to a customer to the head of our IT departments that are doing on this business, because most of them, they're great, they're smart engineers, unlike me, I know [indiscernible] tequila, they don't. So we got to teach them how those brands work. But really in a very fast growth, that's what we do.