Retail Technology and Innovation – a Conversation with Michael Guzzetta


Retail Technology and Innovation – A Conversation with Michael Guzzetta

We recently spent some time with Michael Guzzetta, a seasoned retail technology and innovation executive and consultant who has worked with brands such as The Walt Disney Company, Microsoft, See’s Candies, and H-E-B.

Tell me about your background. What brought you to retail?

Like many people, I launched my retail career in high school when I worked in the men’s department at Robinson’s May. I also worked for The Warehouse (music retailer) and was a CSR at Blockbuster video – strangely, I still miss the satisfaction of organizing tapes on shelves.

I ignited my tech career in 2001 when I started working in payment processing and cloud-based tech, and then I returned to retail in 2009 when I joined Disney Store North America, one of the world’s strongest retail brands.

During my tenure at Disney, I had the privilege of working at the intersection of creative, marketing, and mobile/digital innovation. And this is where the innovation bug bit me and kicked off my decades-long work on omnichannel innovation projects. I seek opportunities to test and deploy in-store technology to simplify experiences for customers and employees, increase sales, and drive demand. Since jump-starting this journey at Disney Store, I’ve also helped See’s Candies, Microsoft, and H-E-B to advance their digital transformation through retail innovation.

What are some of the retail technologies that got you started?

I’ve seen it all! I’ve re-platformed eCommerce sites, deployed beacons and push notifications, deployed in-store traffic counting, worked on warehouse efficiency, automated and integrated buyer journeys and omnichannel programs, and more. I recently built a 20k SF innovation lab space to run proofs-of-concept to validate tech, test, and deployment in live environments. Smart checkout, supply chain, inventory management, eCommerce… you name it.

What are the biggest innovation challenges in retail today?

Some questions that keep certain retailers up at night are, “How can we simplify the shopping experience for customers and make it easier for them to check out?”, “How can we optimize our supply chain and inventory operations?”, “How can we improve accuracy for customers shopping online and reduce substitutions and shorts in fulfillment?” and “How can we make it easier and more efficient for personal shoppers to shop curbside and home delivery orders?” Not to mention, “What is the future of retail, and which technologies can help us stay competitive?”

I see potential in several trends to address those challenges, but my top three are:

Artificial Intelligence/Machine Learning – AI will continue to revolutionize retail. It’s permeated most of the technology we use today, whether it’s SAAS or hardware, like smart self-checkout. You can use AI, computer vision, and machine learning to identify products and immediately put them in your basket. AI is embedded in our everyday lives – it powers the smart assistants we use daily, monitors our social media activity, helps us book our travel, and runs self-driving cars, among dozens of other applications. And as a subset of AI, Machine Learning allows models to continue learning and improving, further advancing AI capabilities. I could go on but suffice it to say that the retailer that nails AI first wins.

Computer vision. Computer vision has a sizable opportunity to solve inventory issues, especially for grocery brands. Today, there’s a gap between online inventory and what’s on the shelf since the inventory system can’t keep pace with what’s stocked and on the shelves for personal shoppers, which is frustrating for customers who don’t expect substitutions or out-of-stock deliveries. With the advent of computer vision cameras, you can combine those differences and see what is on the shelf in real-time to inform what is available online accurately. Computer vision-supported inventory management will be vital to creating a truly omnichannel experience. Computer vision also enables smart shopping carts, self-checkout kiosks, loss prevention, and theft prevention. Not to mention Amazon’s use of CV cameras with their Just Walk Out tech in Amazon Go, Amazon Fresh, and specific Whole Foods locations. It has endless applications for retail and gives you the eyes online that you can’t get in stores today.

Robotics. In the last five years, robotics has taken a seismic leap, and a shift has happened, which you can see in massive, automated fulfillment centers like those operated by Amazon, Kroger, and Walmart. A brand can deliver groceries in a region without having a physical store, thanks to robotic fulfillment centers and distribution centers. It’s a game-changer. Robotics has many functions beyond fulfillment in retail, but this application truly stands out.

What is a missed opportunity that more retail brands should take advantage of?

Data. Data is huge, and its importance can’t be understated. It’s a big, missed opportunity for retailers today. Improving data management, governance, and sanitation is a massive opportunity for retailers that want to innovate.

Key opportunity areas around data in retail include customer experience (know your customer), understanding trends related to customer buying habits, and innovation. You can’t innovate at any speed with dirty data.

There’s a massive digital transformation revolution underway among retailers, and they are trying to innovate with data, but they have so much data that it can be overwhelming. They are trying to create data lakes, a single source of truth, and sometimes they can’t work because of disparate data networks. I believe that some of the more prominent retailers will have their data act together in a few years.

“Dirty data” results from companies being around for a long time, so they’ve accrued multiple data sets and cloud providers, and their data hasn’t been merged and cleaned. If you don’t have the right data, you are making decisions based on bad or old data, which could hurt you strategically or literally.

What do you wish more people understood about retail technology and innovation?

Technology will not replace people. In my experience, technology is meant to enhance the human experience, which includes employees. If technology simplifies the process so much that the employees become idle, they are typically trained to manage the technology or cross-trained to grow their careers. Technology isn’t replacing the human experience any time soon, although it is undoubtedly changing the existing work experience – ideally for the better, both for the employees and the bottom line.

Technology doesn’t always lower costs for retailers. Hardware innovation requires significant capital expenses when it’s deployed chain-wide. Amazon’s “Just Walk Out” is impressive technology, but the infrastructure, cloud computing costs, and computer vision cameras are insanely expensive. In 5 years, that may be different, but today it is a loss leader. It’s worth it for Amazon because they can get positive press, demonstrate innovation, and show industry leadership. But Amazon has not lowered its operating costs with “Just Walk Out.” This is just one example, but there are many out there.

Online shopping will not eliminate brick-and-mortar shopping. If the pandemic has taught us anything, online shopping is here to stay – and convenience is extremely attractive to consumers. But I think people will never stop going to stores because people love shopping. The experience you get by tangibly picking something up and engaging with employees in a store location will always be around, even with the advent of the Metaverse.

Retail technology

What are some brands that excite you right now because of how they use technology?

Amazon. What they have been doing with Just Walk Out technology, dash carts, smart shelves, and other IoT technology puts Amazon at the front of the innovation pack. Let’s not forget that they’ve led the way in same or next-day delivery by innovating with their automated fulfillment centers! They have the desire, the resources, and the talent to be the frontrunner for years to come.

Alibaba. This Chinese company is another retailer that uses technology in incredible ways. Their HEMA retail grocery stores are packed with innovation and technology. They have IoT sensors across the stores, electronic shelf labels, facial recognition cameras so you can check out with your face, and robotic kitchens where your order is made and delivered on conveyor belts. They also have conveyors throughout the store, so a personal shopper can shop by zone, then hook bags to be carried to the wareroom for sortation and delivery prep – it’s impressive.

Walmart and Kroger. Both brands’ use of automated fulfillment centers (AFCs) and drone technology (among many others) are pushing the boundaries of grocery retail today. Their AFCs cast a much wider net and have expanded their existing markets, so, for example, we may see Kroger trucks in neighborhoods that don’t have a store in sight.

Home Depot. They have a smart app with 3D augmented reality and robust in-store mapping/wayfinding. Their use of machine learning is also impressive. For example, it helps them better understand what type of projects a customer might be working on based on their browsing and shopping habits.

Sephora. They use beacon technology to bring people with the Sephora app into the store and engage them. They have smart mirrors that help customers pick the right makeup for their skin tone and provide tutorials. Customers can shop directly through smart mirrors or work with an in-store makeup artist.

What advice do you have for retailers that want to invest in technology innovation?

My first piece of advice is to include change management in the project planning from the start.

There are inherent challenges in retail innovation, often due to change management issues. When a company has been around for decades or even more than a century, they operate with well-known, trusted, and often outdated infrastructure. While that infrastructure can’t uphold the company for the next several decades or centuries, there can be a fear of significant change and a deeply rooted preference for existing systems. There can be a fear of job loss because of the misconception that technology will replace people in retail.

Bring those change-resistant people into the innovation process early and often and invite them to be part of the idea generation. Any technology solution needs to be designed with the user’s needs in mind, and this audience is a core user group. Think “lean startup” approach.

My second piece of advice is to devote enough resources to innovation and give the innovation team the power to make decisions. The innovation team should still operate with lean resources, focusing on minimum viable products and proofs of concept, so failures aren’t cost-prohibitive. The innovation team performs best when it has the autonomy to test, learn, and fail as they explore innovative solutions. Then, it reports its findings and recommendations to higher-ups to calibrate and pivot where needed.

In closing, I’d say the key to innovation success is embracing the notion of failure. Failure has value! Put another way; failure is the fast track to learning. Learning what not to do and what to try next can help a retail company to accelerate faster than the competition. Think MVP, stay lean, get validated feedback quickly, and iterate until you have a breakthrough. And always maintain a growth mindset – never stop learning and growing.

Additional resources:


The Future of Retail — Trends From NRF

The Future of Retail — Trends From NRF

After a great week at NRF talking tech with industry leaders about the future of retail, experiencing cutting-edge demos, and learning about retail’s biggest challenges and opportunities, we’re back in the office with a heightened appreciation for the exciting possibilities ahead.

In my last post, I announced our Retail Innovation Accelerator, which is focused on harnessing emergent technologies to develop customer solutions in an agile way. This retail solutions incubator — which is powered by internal innovation projects and strategic partnerships across voice & chat, telemetry & insights, and modern supply chain — provides a framework for our customers to more easily identify the technologies best suited to digitally transform their businesses.

This week, I’d like to switch gears a bit and discuss some of the trends we saw at NRF. While by no means an exhaustive list, I hope this helps paint the picture of how retailers should think about digital transformation efforts over the next year and beyond.

1. The whole is greater than the sum of its parts. One thing that stood out compared to past NRF Big Show’s is how technology companies are thinking about the power of multi-platform solutions. To unpack that, it’s becoming more and more evident that there isn’t one technology that can truly transform your retail and brand experience. Rather, a suite of technologies must be integrated into a cohesive, omni-channel strategy to really move the needle. If you are considering RFID sensors to make your dressing room “smart”, pair this with digital signage powered by a recommendation engine to help complete your customers’ outfit. Or how about taking that a step further with an AR-powered selfie app that shows customers what those boots would look like with their new dress? Individual technologies may generate some buzz, but the right suite of technologies can truly transform a retail business.

2. The year of the edge: connected everything. The best brands react to their customers in real-time, and the only way to do that is by listening smartly. The collection — and more importantly analysis — of data will continue to be one of the primary differentiators between successful and unsuccessful retailers. But how do you capture the kind of meaningful data that yields actionable insights? At Valence, we’ve been working in the IoT space for many years. However it was still eye-opening to see such a strong focus on the “connected everything” store. Edge devices and sensors are seeing exponential advancements in on-board compute power, connectivity, and battery life, while AI-powered cloud services continue to evolve. With technologies like computer vision, it’s amazing how much you can learn about yourself and your customers.

3. Retail robotics is maturing, but not there yet. We all know robotics in the warehouse is already here, but when will robots be roaming the sales floor? Can a robot re-stock shelves? How about provide wayfinding to a lost customer? We saw some compelling “front-of-house” demos from hardware and software companies alike, but at this time robotics still resonate best when tackling “back-of-house” challenges. However — as with all promising technologies — it’s only a matter of time until the cost-benefit ratio leads retailers to use robotics for more purposes.

4. Your platform is your product. While we used to only think of your platform — whether web site or store front — as the place to showcase your product, today’s competitive landscape means that your platform might just be your most important product. There are so many ways to buy, it’s important that yours is the easiest, fastest, and has a little extra flavor than the competitor. Improving your platform can be as simple as re-writing your web site copy to better match your brand’s voice, or can be as complex as restructuring your inventory management system and releasing a “buy online, pick up in-store” app. Whatever the approach may be, it’s important to understand how vital your platforms are in differentiating your brand.

5. Amplify your voice with…voice! It seems obvious, but in order to stay relevant brands must operate at the pace of consumers. And with the exponential evolution cycle in consumer technology, this is getting harder and harder to do. Voice may one day usurp touch as the primary user interface, and it’s important to consider the user flow for customers interacting with your brand on services like Amazon Alexa. We didn’t see as many voice-based demos at NRF as we expected…all the more reason to start investing in this space before your competitors do.

Next week, I’ll be providing a recap of everything we’ve learned and announced throughout our month of retail. I’m excited to share the opportunities on the horizon for all retailers who are ready to adopt emergent technologies.

Humanizing the Un-Human: The Current State of Robotics

Humanizing the Un-Human: The State of Robotics

Waypoint Vector

I know what you’re thinking (insert 80’s pop culture movie with robots), I thought the same thing when I saw my company was digging its heels into robotics. But wouldn’t that take jobs away? Is there even demand for robots? What about robot attacks?

Well shame on me, I was completely wrong, across the board. Let’s talk about the state of robotics.

I recently drove roundtrip from New York City to Toronto, by way of Montreal and a little city in New Hampshire called Merrimack where I visited Waypoint Robotics, a company Valence is partnering with to bring digital innovation, and in this case, robotics innovation, to enterprise companies all over the world.

Upon entering Waypoint, you can tell these guys are serious about what they are working on and super (rightly) proud of it. After seeing Waypoint’s Vector, moving swiftly about the shop, I was pleased to spend time with Waypoint’s founder and CEO, Jason Walker, who let me take over the helm of the Vector.

Waypoint is something of an anomaly — they are a robotics company that is not even two years old, and they have already shipped dozens of robots. As everyone knows, hardware is hard, and getting a hardware product on the market within two years is pretty amazing; but with robotics, four years to market is more typical if it’s an exceptional team.

What really sets Waypoint apart is how easy the Vector is to use. That didn’t happen by accident and it’s more than just a product requirement — it’s Waypoint’s design philosophy. But the next layer of the onion, the “why” is what’s most interesting. Waypoint started with the workforce, and made their needs, their experience, the guiding light for designing the products; not just in terms of workflow and user experience, but from a cultural and sociological standpoint. Waypoint believes that the workforce is essential to the economy on the supply and demand side, but more importantly, the workforce is the fabric of our society. Waypoint recognizes, emphasizes, and utilizes that tremendous value.

Waypoints customers aren’t looking to eliminate their workforce; on the contrary, they typically have had a “for hire” sign in the window for years. But until Waypoint’s Vector came along, the only way to get a robot working was to hire a roboticist to go with it, and that’s just one more, even harder-to-hire person. Waypoint’s idea was to make a robot that is so easy to setup and use that the workforce that is on the job right now, can immediately take Vector and put it to work for them. There’s nobody better to setup a robot to help with moving materials than the person who’s been moving those same materials in that same factory for the last 15 years.

Over and over we see customers who have their most valuable people, their most skilled and rare tradespeople pushing carts for hours and hours each week. These workers know the value of their time and their talent, and they know what a waste it is to be pushing carts when they could be setting up CNC machines or rebuilding transmissions. It is frustrating to do work that underutilized your talents, and it’s ten times as frustrating when that work is physically exhausting or ergonomically stressful.

To sum it all up, the idea is to make a product that the workforce can take control of and use directly. The state of robotics is that we should empower the workforce with a new industry 4.0 tool. In doing so, we invest in our people as valuable teammates and add to their skill set. Simultaneously they are able to offload the most physically demanding, and essential but low-value tasks to the robot. And that in turn gives the workforce more genuinely productive and rewarding hours in the day. The state of robots is more productivity, less physical exhaustion, and a longer career all translate to a higher quality of life — and that’s the core of the onion; that’s the why.

At Valence, we take the latest technologies and apply them to the challenges faced by enterprise customers every day. Interested in hearing more? Contact us and we’ll start you off with a demo, to show how remarkable this technology can be!

Additional Resources: 

Robotics: Cue the Pizza Drones?

Robotics: Cue the Pizza Drones?

Drones and robots are going to solve all of our delivery woes!

Well…. not so fast. It was definitely fun to see Domino’s deliver its first pizza by autonomous drone in New Zealand a bit over a year ago. But the truth is we’re not going to see fleets of airborne delivery bots anytime soon, no matter how much Domino’s, Amazon, or UPS invest in drone technology (plus the critical AI needed to make the devices smarter than flying Tinkertoys).

First, let’s look at what was behind the scenes of that first pizza delivery. As Business Insider put it, “A team of drone experts and a pilot autonomously controlled Flirtey’s DRU Drone through GPS navigation to drop off the pizzas.” Even if it were a small team of drone experts, say three at most, that still requires four people to deliver a pizza. A great stunt. Something to spark the imagination. But not a realistic business model for getting hot pizza to the masses any time soon.

Part of the hold-up is FAA regulations protecting the public (and our collective airspace) from errant pies or inept drone operators, not to mention high-tech electronics falling out of the sky. At the moment there is a “line-of-sight” rule, generally requiring all drones to be directly visible to their operators. So for now, drone flight is all pretty manual and pretty complicated. The other part of the hold-up is technical. As in, there’s work to be done before drones are safe and reliable enough to deliver pizzas (or other packages, for that matter) in the real world. Once these barriers are resolved, we expect to see rapid adoption.

The field of robotics is actually fascinating right now. On the one hand, there’s a bunch of tech that’s exciting to watch but not quite ready for Prime Time. (Here’s where drone pizza delivery fits in.) And on the other hand, there’s old technology that’s been in widespread use since the ’80s. Massive industrial robots that perform repetitive tasks with perfect precision in automotive factories, for example. But those robots are extremely expensive, not adaptive, and they must be precisely programmed to perform incredibly specific tasks.

So, what’s in the middle? Are modern robots being deployed in the real world? Of course, there’s the famous example of the 45,000-strong workforce of Kiva robots powering Amazon’s warehouses around the world. And some retailers are currently conducting trials in big box stores. Lowes, for example, which is experimenting with a “Lowebot” to help people find products. Or Target, where a Simbe Robotics model called Tally monitors the stock on shelves, freeing up sales associates to focus on clients.

Plus watch out for anyone planning mischief at a mall or stadium parking lot. Robots are starting to supplement security guards to identify suspicious activity in public parks, at sporting events, and in enormous indoor shopping venues.

As it happens, the drone world is also an area of exciting innovation in robotics, despite the stunt with the pizza boxes. Already, advanced drones fitted with navigation systems, sensors, and AI are able to inspect thousands of miles of track for railroad companies; assess the safety of offshore oil rigs; fly over wind turbines to check for maintenance issues; and examine miles of overhead power lines searching for damage. When equipped with computer vision, navigation, and other AI capabilities, autonomous drones are cheaper, safer, and faster than humans conducting the same kind of industrial inspections.

Although this technology is not mainstream at the moment, it is developing rapidly and more cheaply than ever before. Where drones once cost millions and were affordable only to military forces and the like, today they are available for hundreds (at most thousands) of dollars. Plus, open source platforms that offer AI and other advanced functionality are cheaper and more widely available than ever before.

So while it’s not likely for your pizza to drop out of the sky thanks to drones and robots anytime soon, there are real applications for drones and robots at industrial scale that can transform your business. Particularly when paired with advanced sensors, AI, cloud computing, and IoT technology.

Wonder if drones or robots could advance your enterprise? At Valence we help our clients separate fact from fiction and incorporate leading-edge technology that drives real results. We’d love to show you the way. Interested? Contact us, and we’ll help you get started!

Chatbots: Much More Than A Novelty

Chatbots: Much More Than A Novelty

The promise of Artificial Intelligence and chatbots is here.

Sure, humanoid robots s aren’t yet roaming the earth, but AI-induced applications and AI-infused services are transforming the world around us into a more intelligent, interactive, and empowered domain. Looking for a good example? Ask Siri, Alexa, Cortana, or CleverBot. They, collectively, are the answer.

Apple’s Siri, Amazon’s Alexa, Microsoft’s Cortana, and Google’s Cleverbot are all examples of chatbots — “a computer program which conducts a conversation via auditory or textual methods.” Some chatbots use natural language processing ability to understand your speech and then respond verbally. Apple’s Siri is perhaps the most famous example of this type of chatbot, though Alexa and Cortana are also widely used. Other chatbots are text-based, responding to typed questions, commands, or observations. Microsoft’s Xiaoice, for example, was released in China in 2014 and, as of only a year later, had already been used by over 40 million smartphone owners (25% of whom had reportedly said “I love you” to their “virtual friend,” which is available on China’s two most prominent social media platforms — Weibo and WeChat).

Chatbots have been the subject of controversy — see Microsoft’s Tay — and frequent comic derision — see, e.g. Siri. More generally, many people see them as little more than a novelty — a fun way for consumers to interact with technology. But they are much much more than that. Simply put, chatbots are a powerful example of the proliferation of Artificial Intelligence into mainstream society. And we are just scratching the surface of their capabilities.

To-date, the landscape of chatbots available for consumers and enterprises has been dominated largely by the tech titans mentioned above. It is in the process, though, of getting significantly more diverse and dynamic, a phenomenon driven by the release of numerous chatbot frameworks for developers.

Chatbot frameworks are essentially software development kits (SDKs) for the AI-verse. They provide a platform — the technology infrastructure — for developers to build chatbots in a manner which meets their needs. The release of frameworks like Microsoft’s Bot Framework and Facebook’s Bot Engine (wit.ai) means that any developer, be they a hobbyist or professional service provider, can build a chatbot to improve their life or the lives of those around them.

Want to build a chatbot that speaks to you in Captain Hook lingo in time for the annual Talk Like a Pirate Day (September 19)? Have at it! Think your business can benefit from a chatbot designed to provide a more intuitive way to access and organize the data that fuels your success? Build it!

…or let us build it! Valence understands that chatbots are more than a novelty; they are a paradigm shifting technology that can digitally transform businesses in any sector. That’s why we’re putting them to work for our clients in ways that support both their strategic objectives and their day-to-day tactics. And that’s why we’re looking forward to learning how we can put them to work for you.

Additional Resources

Enterprise Robotics: More Promising Than Working for Elon Musk

Enterprise Robotics: More Promising Than Working for Elon Musk

The field of robotics is changing, and while the humanoid robotics of science fiction are still in development, but enterprise robotics are being rapidly adopted.

Elon Musk is one of the most innovative entrepreneurs in America, having been at the forefront of technology revolutions related to online payment systems (PayPal), space travel (SpaceX), automobiles (Tesla), solar power (SolarCity), high speed transportation (Hyperloop), and artificial intelligence (OpenAI). Those who work for Musk enjoy immense funding for some of the most interesting and challenging research projects being done in the world (and usually do okay on stock options, to boot!).

One can imagine, then, that it takes a pretty special opportunity to pry talent away from a Musk operation. For a few prominent researchers, that opportunity seems to be the promise of enterprise robotics.

Earlier this month, the New York Times reported that Pieter Abbeel, Peter Chen, and Rocky Duan were leaving Musk’s OpenAI to start a new company — Embodied Intelligence. Embodied Intelligence, or EI, will focus on artificial intelligence, or AI, for robots. More specifically, they will seek to advance “an algorithmic model called reinforcement learning — a way for machines to learn tasks by extreme trial and error.”

Abbeel et al are hardly alone in working at the nexus of AI and robotics. Rather, their “new company is part of a much wider effort to create A.I. that allows robots to learn. Researchers in places like Google, Brown University, and Carnegie Mellon are doing similar work, as are existing start-ups like Micropsi and Prowler.io.”

AI, though, is not the sole reason that enterprises perceive robotics to be rapidly increasing in value. Rather, many other recent technological breakthroughs are making the integration of robots of various shapes and sizes into traditional business processes more effective, for example:

  • New hardware designs enabling more processing power and larger amounts of storage to fit in smaller spaces (Moore’s Law in full effect!);
  • Cloud computing, which allows network-connected devices (IoT y’all!) to access specific sets of data in private or public cloud environments, or even the endless trove of data on the open Internet;
  • Advances in the durability and energy efficiency of batteries;
  • Etc etc etc.

In combination, these developments have propelled the functionality and reliability of robots to new heights.

Remember that big clunky toy robot you got as a kid for Christmas? It was so exciting! It walked! Maybe even spit out a few catchphrases! How quaint…

Today’s robots play a critical role in industries ranging from manufacturing to healthcare, and from food services to retail: “hospitals are using robots to assist in surgery, retail stores are testing robots to take inventory, and warehouses are using robots help sort packages.”

As crazy as it sounds, then, Abbeel and his colleagues may just be on to something in leaving a Musk-led organization to start a robotics firm. It’s a bit of a risk, but one that seems likely to reap significant rewards. What about you? Is your business ready to reap the rewards being generated by the rising value proposition of enterprise robotics? Let Valence help you with the answer. Enterprise robotic shipments are expected to nearly triple between 2015 and 2021, so now is the time to formulate a strategy for integrating these force maximizers into your operations…before your competitors take advantage of these new technologies themselves.

Additional Resources