Event Recap

Event Recap: Reimagining Retail: Beyond Brick & Mortar

Aug 14
Aug 19
Alley Team
Event Recap

Event Recap: Reimagining Retail: Beyond Brick & Mortar

Aug 14
Aug 19
Alley Team
Event Recap

Event Recap: Reimagining Retail: Beyond Brick & Mortar

Aug 14
Aug 19
Alley Team
Community Over Everything

Event Recap: Reimagining Retail: Beyond Brick & Mortar

Event Recap: Reimagining Retail: Beyond Brick & MortarEvent Recap: Reimagining Retail: Beyond Brick & Mortar
Photo by Arturo Rey on Unsplash

Retail is the driving force of consumer culture, but the industry is long overdue for a refresh. This year’s circumstances have challenged retailers to reimagine the consumer journey, beyond brick & mortar. In this event, we’ dive into the future of retail, and explore how today’s technology can transform the traditional retail experience. Our panelists discuss what products are transforming the IRL experience, how e-commerce plays a role in the future of retail, how COVID-19 will change the course, and of course, the power of 5G—spoiler alert: it’s a tool you’ll want on your side.

Verizon 5G Labs:

Verizon's 5G Labs works with startups, academia and enterprise teams to build a 5G-powered world. We work on 5G trials, hackathons, industry partnerships, prototyping challenges and more.

Mentioned Resources:

  • Pathr™ | Real Time Spatial Intelligence. Applied - Pathr™ is a spatial AI platform that evaluates the way people and objects move through a physical environment. Real Time Spatial Intelligence.
  • Social Distance AI - Reopen & Protect Customers and Staff in the wake of Covid 19 | Social Distance Score™ from Pathr.ai - Introducing the Social Distance Score™ from Pathr.ai. An AI solution created to help your business safely reopen & protect customers and staff by evaluating foot traffic, layout, and establishing your social distancing options in the wake of a pandemic like Covid 19.
  • Pathr™ Demo Reel
Tiffany Stone
Verizon 5G Labs
Kevin Howard
George Shaw


Tiffany Stone  0:00  
We can get started here. All set.

Awesome. All right, welcome everyone, and thank you for joining today. My name is Tiffany Stone and I lead the exploration and incubation of 5G enabled retail solutions and businesses in Verizon's 5G Labs, and I will be your host for today's conversation. For those of you who are not familiar with the 5G Labs, we are Verizon's corporate innovation team, and we identify, build, and incubate next-generation technologies and businesses that are enabled by 5g. So to name a few, those include frictionless retail, immersive entertainment, remote education, and more. We believe that 5G will dramatically change how we work, live, and play. And so if you're working on something exciting that requires 5G we want to hear from you. I just want to give also a quick shout out to Alley. Thank you for helping to build a space to have these conversations.

Alley is a community agency that unites rich and diverse communities around the country with corporate partners to provide the resources and catalysts to drive positive change in technology and the broader world. So thank you for hosting us today. And lastly, if you just want to check out more upcoming events and love these type of talks feel free to check out Alley.com or Verizon5Glabs.com. So with that, I want to kick it over to our panelists. Kevin and George, I'd love for each of you to introduce yourself and tell us a little bit about your company as well. So why don't we go ahead and get started with Kevin from Smartshop.

Kevin Howard  1:38  
Great, thank you, Tiffany, and thank you for having us. My name's Kevin Howard. I'm the CEO at AWM Smart Shelf. We are just by way of background from a corporate standpoint an AICV machine learning organization drizzled with some deep learning as well. Two core missions from a corporate perspective. One, and really the focus for us is predominantly retail both front and back of house. But the core mission for us is to pull cost out of the business, first off. And secondarily, to create some streamlined communication with employees and customers, and it's frictionless. So corporate wise, we have a couple  key focuses or mandates really around creating autonomous storage both front and back of house. And then secondarily, frictionless shopping which most of you have probably heard of in the past. But really, is that what you reference is walk-in, walk-out shopping, so not having to deal with cashiers and registers and things of that nature. So thank you for having me. I'm really excited to join the panel and discussion.

Tiffany Stone  2:55  
All right, go ahead, George.

George Shaw 2:57  
Thanks, Tiffany. And thanks for having me. I'm George Shaw, CEO of Pathr. Pathr builds AI that understands how people move through physical spaces. One of those types of physical spaces is brick and mortar retail stores. We also work in industry where we look at how people move around factories, manufacturing plants, work in offices, we work in shopping malls, event venues. Through lots of different places where people are moving through those spaces our AI understands that movement. So basically location, data, we take that in, and we build machine learning to understand that. Lots of different use cases that we pursue in retailers whether it be customer experience, customer service, marketing, various operations, loss prevention, and some use cases like that, that our technology powers.

Tiffany Stone 3:46  
Awesome, thank you both. As you can all see, we have some pretty awesome panelists today. So you're definitely in luck for an exciting conversation. So with that, let's go ahead and get started. I'm going to be asking a few questions, but really this is a discussion. And for the rest of the audience, if you have questions of your own that you'd like for me to ask, feel free to just put it in the chat, and we will have some time at the end to address some questions.

All right, so before COVID approximately 90% of retail dollars were still spent offline despite rapid e-commerce growth. And digitally native brands like your Warby Parker's or Casper were also opening retail storefronts at an accelerated rate. In fact, there were 1700 stores in the US that were actually opened just by digitally native brands. COVID is changing retail. And so for my panelists to start, what structural retail trends do you believe are being accelerated by COVID? And what new retail trends have emerged and are here to stay?

Kevin Howard  4:52  
I'll jump in first George if that's okay?

George Shaw 4:55  

Kevin Howard 4:56  
Yeah, [LAUGH]. You know, I would say there's a couple of things. And what happened when COVID initially was announced is I had assumed, and I'm sure a lot of people in the industry that are very well versed would've thought the same thing, in that most retailers and storefronts really had to retrench and take a step back and figure out how and what to do to make sure they could supply the need and demand and XYZ. So our business at the time on the retail front because we do operate in other areas and venues and what have you, on the retail front slowed. And we noticed that retailers really were trying to figure out what they were going to do and what ultimately was going to happen. And you saw folks even like myself who traditionally wouldn't order online, you know, we had ordered some stuff online and things of that nature just so we could avoid having to go in and, you know, stand in line and things of that nature.

What has happened since, and this is all in the last let's say 6 weeks, is I've had at least a dozen times where retailers have come to me and said, we as an organization have to innovate in 2 months what would've been 2 years. Knowing that they have to iterate and change and adopt and adapt to the new environment. And that new environment incorporates several features and items. And a lot of them have to do with trying to ensure that customers feel comfortable when they're in space, meaning when they're in-store and what have you. And others are really around ensuring that it's easy of use and basically just getting in and out as quick as they can. And so, we started to see an accelerated adoption rate organizationally that is even greater and faster than pre-COVID. Which as you can imagine from our organization, you know when you're talking about creating something where people can get in and out and they're not interacting with humans like they normally would it obviously comes into play here.

So for us, interestingly enough, yeah there was a little bit of a slowdown and then now we've started to see it pick up. And all of the customers, whether they're retailers or what have you, are all looking to drive applications that will allow seamlessness inside of a retail environment. Incorporates, of course, you know, ordering online and what have you, but still we're not seeing the drastic shift away from brick and mortar that you would've thought or people certainly estimated. So, at least for me, that's the experience that I have. And, you know, we're really excited about where things go. And I believe that key comment that I've heard at least a dozen times of, we have to innovate what would've been 2 years in 2 months is really speaks to where the market is right now.

George Shaw  7:51  
Yeah, I think we've seen, you know, some of the same things just to build on what Kevin said there. You know there was a trend that was happening it was particularly prevalent in the US where we had more retail square footage per capita than anywhere else in the world. And what that trend was, was really just imagining what all that square footage is for. What do we have all these brick and mortar buildings for? What's their purpose, right? And that was, I see it as going in two different directions. There are two different real uses for those brick and mortar locations. One is as a distribution channel, and the other is as an experience, and those are pretty different uses. And I think different retailers in different segments of retail will go in one direction or the other. You know, even convenience stores you could think of as a distribution channel. You know, there are lots of stores that are really just there to give you the stuff and you're not trying to have an experience there. And then there are other stores where it's not about getting the thing it's about going and having an experience, learning about the product. I really like what Doug Steven says, that the store is media and media is a store. Here what we're talking more about is the store being media. And, you know, that's the store being this outlet for branding or having an experience and for helping the consumer to understand your products.

Those trends were happening already and then COVID has just accelerated that quite a bit. You know, we're moving at warp speed, you know, with what was going to take 5 or 10 years has now happened in 3 or 4 months. Because, you know, it's absolutely mission-critical that retailers figure out why people are going to come to their location so that they can better tune the location, you know, to those uses. So, you know, we've seen a lot of that, especially with shopping centers trying to reimagine what the shopping center is there for. Is it a distribution channel, right? Or we just heard about Simon possibly, I think it's still in the rumor phase, but giving up space to Amazon as a distribution channel to companies like Fillogic who help to turn shopping center space into distribution. I think those are really interesting. And even touchless retail, even autonomous stores you could think of as a really, you know, kind of forward-looking distribution channel as just a way to go get your stuff.

And then you see lots of other experiences. You see like the betas of the world and, you know, other experiences like that where the store is mainly to be an experience for you to touch the product. And then where you actually get the thing, how it's actually fulfilled is sort of a separate question. So we see those things happening quite a bit.

And then the other thing that I would, you know, kind of add to that is that one of the things that we've learned from being on lockdown and off lockdown and on lockdown and off lockdown for a long time is that people really want to go out and people really do want to go to brick and mortar stores. You know, I don't think anybody's sitting here comfortably saying, yeah, this is great. I just want to stay home and I don't ever want to go to a store again, good. Nobody says that right? And so, there's this huge drive to go out and actually be in the physical environment. And so, I think that's a pretty positive sign for brick and mortar retail is the fact that nobody's [LAUGH] enjoying lockdown, right?

Tiffany Stone  10:55  
I love both of those perspectives. And I think you guys both, you know, shared a lot of the takeaway so far, and it's that brick and mortar's not going away. There may be smaller footprints, but physical spaces are still very necessary in the shopping journey. And I think that's really interesting that the store themselves are being repurposed for a lot of different things. Whether it's, you know, warehousing, you know, a media center, which potentially could mean less inventory. As you guys think about reimagining retail are there kind of other experiences or innovations that come to mind for you that you guys, you know, haven't already been talking to customers about? And this is a little bit more just about your vision for retail overall.

George Shaw  11:44  
I can jump in first on that one because [LAUGH] I think one of the things that's important to me is that I know that I don't know what that future retail experience looks like. And so, I say that's important to me because as a technologist it's my job to build technology to empower that future. But that's a future that is going to be up to store designers and up to creative folks to figure out what are those experiences look like. So what we do is we create technology to help give them tools to figure that out, right? And, you know, I have an opinion about the kind of experience I want, but that's just one opinion and lots of other people have different opinions. And I think it's up to the creatives and the store designers and those folks to really, you know, kind of explore. And, you know [LAUGH] it's a really exciting time. Kind of how the internet was, you know, back a bunch of years ago when we didn't know what it was going to look like when people were exploring.

Kevin Howard  12:34  
Yeah, absolutely. And I would add, I'll give you two perspectives from my standpoint. One, immediate in how the market is changing and why from a functional standpoint. And two, longer-term kind of vision, kind of out there where we think that experience as George mentioned earlier will go. The first is we've developed a solution we call virtual sampler. And as all of us have been to a Costco or a Kroger or what have you, and you walked up and you sampled a product. In past, that was pretty standard practice. There'd be folks in the venue that you could go up to and you could try their product and if you liked it, you could buy it. Obviously, it's about promotion and getting people to try the product. Well, in today's world you're not going to be able to do that. And so, we've built this virtual sampler that allows us to deploy a display with technology that will communicate with folks from a remote perspective. So meeting a live person that would be talking like we're talking now on Zoom, or cam messaging based on proximity and things of that nature. And that comes out of humans or people not wanting to have someone handle food that's being prepared there locally just given the environment of where we're at.

So things like that where you're trying to create an experience that allows customers to try a new product. As an example, we have a customer Thelma's, and this is a little bit of a pitch for Thelma's. They make ice cream sandwiches, and they're an unbelievable brand, fairly new organization. These ice cream sandwiches are the best I've ever had, by the way, little bit of a plug for them. But they realized as a newer entity, you know, that has some scale but a lot of people haven't tried their product, they need a solution that they can get people to try. And once they try it, trust me you can tell our entire staff are hooked.

So there's in the short term, there's things like that, that COVID has done to change the environment from a physical perspective, really talking about digitizing this, or automating those processes I said earlier. And then longer-term, we have customers that are talking to us about entire experiences. So imagine, you know, you walk into an environment that is, you know, you're selling let's say whiskeys. And when you walk into the environment it's this holistic, immersive environment where you can smell the peat moss, you can hear the water flowing, and you see that experience simultaneously. So we have customers that are looking for that type of out there, hey, let's create that experience that George referenced earlier. That, yeah, you know, certainly you want them to buy whiskey while they're there but you also want to drive them to an experience that they won't forget and they tell their friends about and they have them come back. So you start to think about the two different, you know, contrast. One is, hey, we need something now. But the longer-term is how do I create these environments that people want to have fun in and they want to go experience it? And, you know, one day it might be the smell of peat moss and the next day, you know, it might be a different product and a different smell. That's incorporating sound, and obviously visual and, you know, all of your senses. And that's really what, you know, we talk to customers about day in and day out what they're looking for. And it speaks to what George was referencing earlier about the experience versus the, hey, how do I make something that's quick and easy? Versus how do I create this experience where it's something where I want to go in and have fun?

Tiffany Stone  16:23  
That's fascinating. And I guess on that note, let's talk a little bit more about customer experience. Customer experience has always been quarter retail and what really differentiates players in the space. And consumers themselves have really heightened their expectations and convenience is really important and personalization is definitely top of mind. So can you tell us a little bit about how your products are enabling retailers to meet today's consumer needs? And maybe also touch a little bit on how you're prioritizing some of these new customer needs that have come out of COVID, such as safety and social distancing, along with some of the kind of core capabilities you guys are supporting for retailers? And this question again is for both of you.

Kevin Howard  17:14  
Sure. George, since we're going back and forth, I'll take this one first, [UNKNOWN] you can jump in after. So the short answer from a COVID perspective is one, we're dealing with COVID-19 today. Every retailer that we work with and every customer we work with and it doesn't matter if it's a stadium or arena or a warehouse they all realize that there potentially is a COVID-20 and a COVID-21, and so on and so forth.

So the new norm is to ensure that we have the ability to understand what these customers are doing in real-time, which George certainly will speak to in a moment. In our system, we obviously track people because it's a frictionless or autonomous environment so we are tracking people as well. And you want to make sure that everybody's healthy first and foremost and safe. And then from there, most of what we're hearing today, of course, is around expediency. How quick can we get in and out? How can we ensure that our experience and what we want is curated as best as possible to the individual? So in our solution, a good example of what can be done, and what is being done in the field is customers may say, you know, I'm looking for a recipe. And, you know, it could be anything, let's just say it's for short ribs. And they want a recipe with short ribs with soda pop, and, or some sort of cola. They have the ability in our system to be able to say where is that in the store? And the app will guide them through the store in a frictionless way, so they can grab the products that they need and get in and out. And the idea is to make it less intimidating when they're going in to shop.

Many of our customers as you can imagine are our brands and those brands will tell us that the biggest issue that customers will find or people will end up doing from a behavioral perspective is they retreat to the norm, so what they know. Instead of well, you know, I might want to go and stretch my boundaries and go look for these specific products, but because I don't know, or I'm too intimidated to try to figure it out on-site they don't necessarily go out and expand their horizons.

So I think there's a couple of things here that are at play. One, these curated experiences will allow us to ensure that we can go out and buy products that we want, whether that's in a furniture store or a department store or a grocery store. The second thing that is unique about this is we start talking about waste in these stores. And you had mentioned earlier, smaller footprints and things of that nature. But the reality of this is as we start to look at spoilage in things that ultimately might move off the shelf as we get into a more personalized experience from a global perspective, you have the ability to understand what the consumer wants and what their behavioral patterns if you will, are in their lives and things of that nature. And so the goal long term would be if you know that I like salmon, and salmon is something that I eat once a week, and I have salmon that ultimately might spoil in 24-hours, maybe you drive a message to me from a personalized perspective to drive some value. Rather than throwing the salmon away, we have the ability to ultimately, it's a win-win for both sides. One from the retailer's perspective, two from the consumer's perspective, and ultimately, we're not wasting. So as we start to look at the experience and where we go I firmly believe that, you know, the personalized curated experience is where the market will really start to shine.

George Shaw  21:01  
Yeah, and, you know, for us I think it's all about measuring and it's all about understanding what's actually happening as opposed to, you know, backing any one horse in terms of what that experience might be. And I go back to the Internet, you know, late 90s, early 2000s when nobody knew what the Internet was supposed to look like. But one of the most important things and one of the technologies that emerged from that time was Google Analytics. The most important thing was to measure what people did on your website. So if I was a giant e-commerce retailer the way I would build my online store was by measuring what people clicked on. How long they spent, and just really understanding consumer behavior in that online environment. That's what we do at Pathr for physical environments. And we try to measure, you know, that's one thing that we need to do is to track the locations of people and understand exactly what they're doing. But then this sort of higher-level understanding what does that actually mean? So you're walking through this store, are you browsing, or are you looking for something specific? And then we can give that back to the retailer, either to the people manning the store or to the store itself, in the case of an autonomous store to take action on that. Can actually help you find the product that you're looking for. Empower an app that can help guide you, or products like Kevin's. Where we can actually go and provide some insights to different media channels and to different, you know, elements of the environment, so that those elements of the environment can react, you know, more intelligently with more context, and better understand sort of what's happening there on the ground. So that's one of the things that's really important to us, you know, in terms of our technology is really just understanding what people are doing and measuring so that we can power lots of different kinds of experiences. You know, I think as people come into different types of stores they're expecting different types of experiences. Those retailers are building those types of experiences and I think they're doing a really effective job, and we just want to play a role in that. And really that role is to better understand the consumer, better understand the operations of the environment, and so on.

An example would be understanding how staff interacts with customers. There's certain types of retail stores where I want to come in and the whole reason I went there is to talk to somebody. I want to have, I want to ask questions. I want to talk to somebody in person. I want to have that sort of an experience. If I'm that type of a retailer, I need some technology to help power that. I need to make that experience much, much better. We've all had the experience of going into a retail store with the hopes of talking to somebody and not being successful or not being as successful as we want, right? That's the kind of use that we hope people will put our technology to is to make those kinds of experiences better.

Tiffany Stone  23:49  
So you guys are both starting to talk about a few use cases that I think do require 5G and so I'd love to bring 5G into the discussion now. So you know the combination of 5G, computer vision, and machine learning is unlocking a multitude of new use cases. And some of you are, you've already mentioned, being able to kind of measure more accurately in real-time, being able to drive for personalization. So what are some other use cases that your company has been focused on? And what role does or will 5G play in enabling you to successfully deliver on those use cases?

Kevin Howard  24:32  
George, you're up.

George Shaw  24:34  
Yeah, well thanks. 5G, I've heard of that [LAUGH]. 5G is actually really exciting to us for a few different reasons. But really, you know, I kind of put my CTO hat on and say it's really about where the compute happens. And if you move the compute to the right location it enables new kind of pieces of functionality. For us, a lot of that is around computer vision. And I spent time at Intel where we were trying to understand how to move computer vision closer to the edge and do those kinds of, do that kind of functionality in an environment that was closer to where it actually happened. That means near the camera, right? Like the camera is collecting pixels and you want to do computer vision on those pixels, right? You want to do it as nearby as possible. I think 5G changes that equation a little bit where now you don't have to do all that compute right next to the camera because you can move video around. You know, there's more bandwidth available, the compute power is more flexible. Taking my CTO hat back off again, you know what that means to everybody else is we can just do more computer vision. We can do more tracking. We can understand better what's happening automatically using AI because of the 5G. So, you know, to us that's really exciting.

And again, back to the theme of I don't know exactly what use case is going to become the most prevalent. I don't know what the store designers and then the creatives that are thinking about these experiences are going to come up with. But what I do know is that it allows us to build technology that empowers more and more experiences. I've done tracking for a long time in a lot of different environments. And in every single one of those something like 5G opens up huge possibilities because of exactly what I said. Makes the computing of computer vision and other things a lot easier and a lot more powerful.

Kevin Howard  26:27  
Yeah. And I definitely would add to that and I'll give you actually some specific use cases that we're deploying too just to further add to what George just referenced. In our world, the goal is to drive ease of access and function, so you think about 5G for friction-free environments. You think through job sites. Today those job sites there's lots of issues in terms of not having connectivity. And 5G allows us to drop in mobile job trailers so that when workers need new supplies they can walk to these job trailers grab them in a manner where there's transparency and accountability.

Think about going into a hospital. We can't sit on a hospital network, but you'd need storeroom management. And that storeroom management could be for supplies like PPE or PPP, excuse me, or PPE, excuse me, or it could be medicines, things of that nature. And everything that is fulfilled within the hospital again you're looking to try to drive accountability and transparency in a manner that is, you know, friction-free. You can't do that without 5G because I'm not going to sit on the hospital's network.

You start to think about what you would end up doing, you know, in a, and I use my daughter often as a use case she plays youth soccer. And when you go to the soccer tournaments you're out there all day. It's hot, it's a disaster. It ends up being the longest day in the world. But wouldn't it be great if you had a mobile café that could sit out there that's not just a food truck but is a friction-free environment that you could go and grab refreshments and everybody could utilize this solution? Well, again, without 5G that's not practical and it's not reality.

So for us, as we start to look at this, and we start deploying into environments where, you know, I might be in a distribution center or warehouse. Without 5G it's just not practical because again, you're not gonna be able to sit on the network that the organization is embedding or implementing. And so, 5G just opens up so many possibilities for us as an organization and to ultimately consumers and employees, if you will, simply because of what it does from a true functional standpoint.

Tiffany Stone  28:50  
I'd love to dig in a little bit more just on the actual store experience that you guys are providing for retailers and, more importantly, the kind of the data that you guys are both collecting. Could you talk a little bit about the unique insights and also unique metrics? George, you speak a lot about measuring and tracking and Kevin's Smart Shelf does that similarly provides a lot of those insights as well through computer vision. So what are some of the unique data points and insights that you guys are able to provide to retailers that previously wasn't available?

Kevin Howard  29:30  
Yeah, taking my turn I'll jump in first again. It's very interesting. So if I were to simplify what we do, from a computer vision perspective we're tracking skeletal structures, so digits, limbs, and what humans are doing in space. What that allows us to do is understand everything someone would do in space, both from an anonymous standpoint as well as from a non anonymous. Meaning we know who that individual is and there are different use cases for both.

Within that, as you start to think about the environment, and I'll just use grocery because it's easy for me to pick on. In today's world, it's very difficult to track things like fraud. So someone comes in and you guys probably have seen videos where somebody said they slipped and fell and ultimately they poured water on the ground and laid down. We track that in real-time. So if someone does slip and fall we would know the system can track that individual and can send alerts immediately to get help for that individual. But also track as importantly, if somebody is actually not telling the truth and they're trying to take advantage of the retailer.

If somebody comes in and actually steals product or tries to steal product, those are the types of things from a use case perspective that we're tracking and ultimately eliminating. But beyond that, what it does is allows us to understand product movement as well as consumer engagement. And so as you start to think about new product launches in certain regions that are specific to that product we're able to track all of that in real-time, that has never been done before. In the previous life, we'd have people go out, they would interview folks and get feedback. And then they put together, you know, from an analog perspective, they'd put together some report that said, this is what the feedback was, and it would take 30, 60, 90, 180 days. Today, all that data lives in real-time and so you're actually reporting in real-time who's engaging. Who's actually buying? Who's not buying? What behavior was if they didn't like, you know, if they had some sort of, you know, feedback that from a facial perspective was negative? All of that is done in real-time down to again digits and limbs. So you're tracking every movement that consumers have, and you're ultimately reporting that back.

So if I have a store, and I said grocery earlier, where the tracking of what's going on from a heat mapping standpoint in the store tells us that a product is placed in the wrong location they know that now in real-time, it's that granular. And it can be based on weather and things of that nature that didn't live yesterday and now it does. And so, the idea about, and I had mentioned this earlier, about curated, personalized experiences. The technologies here today and the retailer that goes to adapt and adopt are the retailers that I firmly believe will grow in scale. And those that don't, that continue to live in the analog world, they will find it a little tougher. Because the consumer today is so much more savvy and sophisticated they're expecting that type of behavior.

Tiffany Stone  32:52  
I'll be sure to never misplace a product at the grocery store again now that I know I'm being tracked. [LAUGH] Because I tend to get lazy-

Kevin Howard  32:59  
No misplaced is not a problem. Misplaced is not a problem. That's-

Tiffany Stone  33:03  
I'll get a call from Kevin and say, hey-

Kevin Howard  33:05  
Yeah, that's not a problem. Misplaced is not actually trying to steal it's very different. Sometimes-

Tiffany Stone  33:13  

Kevin Howard  33:13  
Really that's part of when you talk about waste and things of that nature. If someone puts, you know, a product that would spoil in 1 minute or 2 minutes on the shelf that they didn't have to throw away in our world, you can send an alert to ensure that, you know, a clerk or someone goes over and puts the product back in the freezer. There's things like that, that can be done, and are being done that will one eliminate that waste which in turn saves money ultimately gets passed on to the consumer. So as you start to look at this smart store environment that I keep referencing, you get to a point where it will benefit the consumer in the short term. And ultimately, I believe that digitization or the full autonomous store concept will be a driver for reducing inflation and costs and things of that in stores and products moving forward. And so obviously, I've given a lot of information there but the reality is, it's designed for good, that's what AI should be done with and for.

I will say, just before I ramble on too far for George because I don't want to steal too much of his time. The reality is ourselves and Microsoft are very close partners. Microsoft and ourself see the world the same way and I know Verizon does as well in that any AI that's being implemented there needs to be some standardization around that AI to ensure that bad actors out there do not come into play. And so, that's our goal as an organization and with our partners to create standardization around AI so that theft and things of that nature aren't looked at. And the things that we're doing from an AI perspective in terms of tracking aren't looked at as a negative they're looked at as a positive. That we're trying to actually help humanity as a whole. And so, you know, I just I bring that up because it's really important to ensure that there is some standardization around AI and it's done for good and not for obviously bad.

Tiffany Stone  35:15  
Yeah, definitely. Great I-

George Shaw  35:17  
And AI being a force for good, I think I can get behind that, [LAUGH] you know. That's actually really, really important to us too. And, you know, the way we think about our AI that we're building, I think the interesting way to get perspective on what it is that we do and how it's a little bit different is to look at the human brain. We've modeled our AI pretty nerdy, and [LAUGH] we study the brain and we've modeled our AI on the human brain. And so if you think of, you know, your brain is attached to some eyeballs those are the cameras, right? Those eyes feed kind of information back into the beginning part of your brain that's called the visual cortex that's what does the tracking. And then beyond that, you have other parts of the brain that actually think about what that location means. Think that it's done the tracking, and it thinks about that, right? If you're some sort of predator you're doing, you're tracking your prey, and then you're thinking about, you're strategizing about how to go get that prey, right? That's the sort of higher reasoning.

And that's the kind of AI that we're building, is that higher reasoning to understand things like if 12 people walks down this aisle and didn't buy this product why? Were 10 of those people confused? Or was something wrong with the product? Or was that it was in the wrong location? You know, there's all sorts of different answers to that and so our AI tries to do that kind of thinking in order to understand that.

Building on Kevin's grocery store example, you know, things like fraud I think are interesting and shoplifting is really interesting to us because one of the other things that we've done very consciously is to limit the amount of information available to the AI and that's really for privacy protection and in order to eliminate any risk of any bias whatsoever. So every person walking through a store to us is just a moving dot on a floor plan. We don't know anything else about them. And so if we can identify instances of shoplifting or fraud based on that moving dot on the floor plan it becomes really powerful.

That's one of the uses but another one where there's a real direct benefit, a real sort of obvious benefit to the consumer, is an understanding why you showed up at the store that day. So in a grocery store, did you get there to buy your lunch? Or are you there to do your weekly shopping? Are you shopping for a large family? Are you shopping for a party? Or did you come to steal something, right? There's all these different reasons that you might've come to the store that day. And if we can figure that out from this very weak signal, we would call it, that just where you are that becomes really powerful. But it also can make your shopping experience a whole lot better, right? If the store itself or the people operating the store know why you're there they can give you a better experience because ultimately retailers are motivated to give you a better experience. You know, we're sort of all on the same page here, we want you to have a good experience when you're in the store. And so, you know, the AI can hopefully help to power those kinds of things using, again, using that weak signal of just where you are.

I think  another use case that we didn't touch on before, but one that is particularly timely now is around social distance. That's another thing that, another sort of way to understand where people are and what they're doing. Are you well spaced? You know, that's a that's a relatively easy problem to solve. But what can we as retailers do about that, right? How do we make sure that you have more space for social distance? We've all seen one-way aisles but do one-way aisles work? Is that the best thing? Are people actually adhering to that? These are just more examples of the kinds of behaviors that you need a sort of higher-level reasoning to figure out. But then once you figure those things out it becomes really powerful for consumers, for retailers, and so that's really our goal. [LAUGH] AI for the better good back to that.

Tiffany Stone  39:02  
Some really great major takeaways for those of you that are listening. You know, if you're still here, I'm glad you guys got to listen to that part of the [LAUGH] conversation. And I think, you know, for me three big things just from what you guys both said. I think, first, AI as a force of good very, very important and kind of the standardization around that is really necessary as this technology is just developing so quickly. I think, two is that it's not just about data or, you know, giving kind of information but really answering questions about why. And George, you talked a lot about that higher reasoning and, you know, when you can actually answer these questions about why and that's super powerful. And then I think that leads to three, which is that real-time component, and I like to think that 5G is a huge enabler of that. But by being able to give responses to the why behind what's going on in real-time customers like retailers are actually able to respond instantly that has an impact then on their bottom line. And that's where really solving for these use cases translate into immense financial impact. So those are, that was just really, really great for me to hear. And I think for our audience, you're lucky if you got to participate in that conversation just now.

So I'm looking at the time right now and it looks like we just have a little under 15 minutes, so I do want to make sure that I get some audience Q&A as well right now. So let me go ahead and just pull up some of the questions coming from the audience. So let's see, so this is from Ann Vroom. What are the customer data privacy concerns in the model outlined by Kevin? So collection, tracking, recordings, storing, potentially, you know, selling customer images. So, you know, if I had to kind of summarize that question, you know, like, what are some of the privacy concerns? And how are you guys addressing that given that, you know, computer vision is largely focused on tracking individuals?

Kevin Howard  41:19  
So I'm glad you started with Ann's question because it's a great question and certainly resonates today. So first off, we're, we operate in a global GDPR compliant standard. So if those that are not familiar with GDPR, it's the European Union's Facial Recognition and Data Privacy tracking standard. Within that is if you start to think about what we're trying to accomplish, and there was a reference in a question that I saw earlier about tracking children and things of that nature. We look at it as we always want to take the, I never want to be considered an organization, we never want to be considered an organization that is ever playing in any gray area. We want to be aboveboard in every scenario. And I'll give you a practical use case, an example, and then I'll talk about some of the specifics around GDPR and what have you.

So our customers as you start to understand them, they are predominantly adults but we do have, and I'll use my daughter again as an example. She's 14 years old, she has a debit card, and she shops as you can imagine. If she wants to walk into one of our stores we don't want to limit her from shopping in our store, but I also don't want to have her sign up and be tracked as an individual because she's a minor. And so there are ways to access stores like, you know, pre-authorization of a debit card that they can scan, walk-in and buy product. You know, there are things that you have to be careful with when you're utilizing minors. So when, if a minor came in and we knew that they were a minor in no way, shape, or form would we track their behavior, record their behavior, or report on their behavior, so that's the first thing. And the system was designed to be very user-friendly, so opt-out features and things of that nature. Those that want the ability for us to personalize and curate experiences the only way to do that, obviously, is to understand their behavior. So there's an opt-in feature where customers have the ability to opt-in and then we can personalize and curate those experiences. In the instance where they opt-out, it's really like an anonymous shopping experience each and every time.

So I wouldn't know if Tiffany, you came to shop at our store and you, at one of our stores that we power. I wouldn't know if you walked in 1 minute, turned around, and walked out and walked back 30 seconds later, I wouldn't know who you were. We don't track any of that and the goal isn't to track individuals beyond trying to create personalized and curated experiences. So we're not storing data if you don't want us to store data. We're ultimately just trying to create the best experience that we can. And again, what, you know, George and I have referenced several times, and I believe yourself, you know, AI for good is a great thing. Using it not for good is a very, very bad thing and we want to make sure that we root out as much of that as humanly possible.

So the bottom line is we operate in a global standard, that global standard is GDPR. We're in the process of trying to implement additional standards that are even a little more rigorous than even what GDPR is doing but also with some flexibility for opt-in and opt-out and things of that nature that are happening. So, bottom line is we want to put the power in the consumers' hands, or the employees' hands in terms of what they want and don't want and what they're comfortable with and, you know, we abide with that at every turn.

George Shaw  45:03  
Yeah, and just to, you know, kind of chime in on that, and to highlight what Kevin's saying about being GDPR compliant, worldwide GDPR compliant, you know, that's very important to us. I think we're both in agreement that, that's the right way forward and that's the right way for us to protect consumers' privacy. Our system, again, has nothing but location in it. And if you go back to the analogy of the web when websites are tracking what you do you can go into privacy mode, right? And so you're entirely anonymous. They're still capturing the clicks, but they have no idea who you are. They don't know where you are. They don't know anything else about you except what you clicked on. That's roughly the equivalent of like, you know, the electric iBEAM at the front of the store that's just counting how many people come in and it's completely blind. We're building a system that can do that sort of analytic and that sort of tracking and that sort of understanding but in a completely blind way. Has no idea who these people are that it's tracking. And so that's, you know, I think, you know, [LAUGH] same theme that AI for the greater good, right? I think that, that's really important is that we all as technologists understand that it's very foundational to protect people's privacy. And to understand that we're going in this direction where technology has a better understanding of what people are doing. And technology is increasingly a part of every experience we have in the physical world, too. And so, we have to build this foundation of protecting privacy and protecting individuals in that sort of environment.

Tiffany Stone  46:40  
All right, reading through a few more questions. A lot of questions for you guys. Great questions from everyone. I'm going to group a couple questions together here because I think some of them are hitting on the same things. But what are some of the biggest challenges, kind of now on the flip side, what are some of the biggest challenges that both of you guys, you know, have come across as you guys continue to build and deploy your technologies?

George Shaw  47:07  
I'll grab that one first Kevin if you don't mind? [LAUGH] I think, you know, for us the first challenges were around building the technology and proving that it was possible. You know, I mentioned, I've been working on this kind of technology for well over a decade [LAUGH] now. And it took that long to sort of build-up, you know, the technological understanding to be able to do this behavioral recognition and to be able to, you know, kind of understand consumer behavior and behavior in lots of different environments whether its factories or offices or whatever.

So there was this whole period of building that technology and now I think the period that we're in is more about making that technology practical, and scalable, and usable in a wide array of environments, right? Rather than just doing this in one or two kind of labs, you know, we've built a lot of labs over the years. Now it's time, and I think 5G is actually one of the things that's really empowering that and making that more and more possible, is to be able to do this kind of understanding and bring this kind of really powerful AI to bear on these problems in a practical way. In a way that people can do, you know, across an entire fleet of retail stores or in a very large factory or in environments like that where it was really difficult. So to me, it's really about we've kind of built the capability now we have to make the capability practical and make it able to scale really well. So that's really the biggest challenge that we're currently solving.

Kevin Howard  48:35  
Yeah, and Tiffany and George, I certainly would add to that the biggest practical challenge today is getting to a point where you can scale the environments. So my goal, imagine going to an amusement park with your family and it's a 12-hour experience. We'd like to enable a friction-free environment that is 3-hours. That you can get in and out and enjoy the rest of your day or do whatever you want. Where you're not waiting in lines, things of that nature, and that's part of that curated experience that I was referencing. Now to do that, the only way to get there is to reduce infrastructure and reduce costs. And what I mean by that is today there's a great deal of edge server compute, we would reference it as AI compute servers internally. That those servers, the offloading of some of the processing that we're doing from a technical standpoint, for these solutions to really grab hold and scale we need to do a couple of things. So we need to move some of that edge processing from servers to items like cameras and that won't be the end all be all, but it's certainly a good path down reduction in edge costs in infrastructure.

And then secondarily, moving some of the technical processing at the edge to a Cloud or in your guys' case, Tiffany, mobile edge compute, and where you're just offloading it. And we see this kind of as a hybrid model. As you start to scale, you're going to remove some of the costs that are at the edge from server perspective. With cameras, you're going to have some of it that will be processed in mobile edge computing, and some of it in Cloud. And you'll find a hybrid solution across the board for these massive environments where you start to think about, you know, again how you would take an entire amusement park and make that frictionless or an entire resort and make it friction-free and curate it, right? So that's where you start to think about how this occurs. And the only way to do that, as I said, is there's multiple participants, multiple companies that are able to power this, these types of solutions that allow for the economies of scale for that type of environment to take hold.

George Shaw  51:02  
And I think that 5G is really an enabler for moving that processing. Like Kevin was saying it's all about, you know, being able to move processing to wherever the most practical place is to do that processing, right? The shift to the Cloud opened up a bunch of capabilities because now there was more flexible computing power. Now this shift to ubiquitous computing where the computing processing power can be anywhere that's what's really exciting. And as we can think about engineering and how to build these systems in a practical way.

Tiffany Stone  51:34  
Awesome. So we only have 3 minutes left. So I actually love to finish with giving you each an opportunity to kind of give final remarks. A final takeaway, and maybe also mention where individuals can find more information about you and your company before we head out today. So since I started with Kevin with intros George we'll start with you just for final remarks.

George Shaw  52:03  
Yeah, I don't have a lot to add, really. And this was a fantastic discussion, we really appreciate it. But I think AI [LAUGH] for the greater good is a really great takeaway. And 5g helping to move compute power around I think is a really important takeaway. And then one of the things that I've mentioned a few times that I think is really important is that we don't know what the future holds in terms of the next experiences, and what are these brick and mortar locations really going to be used for? And so, we build a future proof stack of technology in order to kind of address that future, whatever it is. Yeah, thank you. If people want to reach out we're still a small startup so you can email me personally. George@Pathr.ai, Pathr.ai. Thanks.

Kevin Howard  52:47  
Great, George. So Tiffany, thank you for this and Melissa thank you for this, it was great, it was a time. I think there's one question that I saw that I'd like to address quickly. I know we don't have a lot of time. They'd asked about consumers altering their behavior with the, when they realize they're on camera. You can walk into any Walmart, you can walk into any Kroger, you walk into any Macy's, and there are hundreds or thousands of cameras, and it hasn't altered their behavior to date. We know because of our deployments that behavior doesn't change. People rarely recognize or notice the huge signage at the door saying you're on camera. And so I'm less concerned about behavioral patterns changing. I'm more concerned about as George mentioned a moment ago, you know, AI for good, and ensuring there's some standardization around AI long term. And, you know, I think for us, we're starting to see a massive increase as I started the call with in terms of adoption, and our goal is to be able to facilitate that adoption anywhere in the world in real-time. So I really thank you all for the time. It was great. The questions were fantastic. It's certainly good to see you again George it's been a laugh. And we really look forward to the next steps. If anybody would like additional information, you can go to www.smartshelf.com. There's all the different departments that we have if there's interest in reaching out you can see that on our website. Again, www.smartshelf.com. Thank you very much for the time.

Tiffany Stone  54:22  
Awesome. Thank you Kevin and George, this was such a great conversation. And thank you everyone for joining. If you guys would like to reach out to me as well you can reach me at Tiffany.Stone@Verizon.com or go to our 5H Labs website. And until then, you know, we will talk to you guys next time. Thank you.

Kevin Howard  54:42  
Thank you. Bye-bye.

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