Shopper Tech: Turning data into retailing gold

More than 30 years ago, after leaving school following Year 10, Max Valente did something unusual for a first year apprentice floor and wall tiler: with his first six pays he purchased a computer.

He’s been doing the unusual ever since.

Max is the founder of Thought Studio, a software development company he began in Sydney in 2011 as a think tank developing technology to solve business problems and create business opportunities.

Editorial of Max Valente from Thought Studio Photographer: Adam Yip
Max Valente from Thought Studio

It’s just the latest in a string of successful ventures the technology obsessed Max has been involved with since acquiring that first computer.

With credits which include using a dot matrix printer in his tiling days to become – he believes – the first Australian contractor to use a computer to price jobs and developing the world’s first virtual wardrobe – where a person stands in front of a screen and tries on virtual cloches – Thought Studio’s latest development is a retail intelligence system branded Shopper Tech.

“The opportunity to help retailers identify patterns in stores was too good to pass up,” says Max. “However, only a few years ago delivering the required tools and technologies at a reasonable cost would have been impossible.”

“Only a few years ago delivering the required tools and technologies at a reasonable cost would have been impossible”

“Our business model has always been to be at the forefront of technology. We love leveraging technology,” Max says.

“The cloud has given us the ability, if you use it correctly, to do some amazing things. With the Shopper Tech solution, if you go back three years, to build everything would have cost you a lot of money.

“Today you can basically use Machine Learning on Azure for a couple of bucks a weeks. You use it when you need it, you don’t need to build hardware; it’s just so easy to leverage the technology that’s out there now.”

So what is Shopper Tech all about?

Put simply, it is a way of gathering an extraordinary amount of data about consumer shopping behaviour and – vitally – turning that data into meaningful information.

The data starts with sensors that capture a person walking into the store and profiles that person as to age and sex by using face and gender recognition. Further sensors can be deployed under or around products to deliver information about how many time they are handled, and for how long.

Ultrasonic sensors tell how far the shopper is from a product, while Thought Studio is in the final stages of developing a key word microphone that can pick up words such as the names of a competitor’s product or “expensive” to deliver insight into a customer’s thoughts during a purchasing decision.

And it is all done through Azure, Windows 10 and the Cortana Analytics Suite.

“A store might have 100 sensors; they’re constantly pinging a machine we have in store – every second we’re getting a status update from one of these sensors. If you’ve got 100 sensors in store, you can get a lot of information coming through,” Max says.

“That gives the retailers an insight, instantly, to what’s happening in their store.”

“That information is sent up to Azure in the cloud where it gets instantly stored, so it’s in a data base straight away.

“From the data base we use Azure Stream Analytics to push it to Power BI, which is a business intelligence tool. That allows you to look at what’s happening live, on a dashboard.

“That gives the retailers an insight, instantly, to what’s happening in their store. That’s one store with say 100 sensors, but say you had 100 stores with 1000 sensors in each one – that amount of data starts to become amazing.”

Max gives the example of sensors picking up the audio levels and temperature levels in a store. “If you’ve got 100 stores in your franchise you could dedicate 5 or 6 stores to testing so you might change the temperature and change the audio levels and see if that affects sales. That’s where Azure Machine Learning comes in, it gives you that ability to look for patterns in behaviour.”

”The tool in the cloud allows you to analyse that.

“Power BI gives you the ability to look at real time data and also historical data,” he says. “You might say – speaking the instruction in English or typing it in; Power BI is an amazing tool – you might say: ‘show me which shoe is the most popular in NSW?’”

“Then you can start to analyse your data, and that’s when it gets interesting.”

Shopper Tech can also gather data via heat maps on how consumers move through the store; showing dwell time around products and whether women follow a different path to men or the young travel in a different pattern to older customers.

The product has already attracted domestic and international interest, with the first install underway with a company which specialise in women’s lingerie and adult products.

Shopper Tech is not limited to reporting and intelligence. The solution also comprises kiosks and digital signage for retailers, and Microsoft is using Shopper Tech to display marketing material on 700 screens across JB Hi Fi and Harvey Norman outlets.

Max points to the relationship with Microsoft as being crucial to success. “As we developed Shopper Tech, Microsoft involved us in a three day accelerator program where we gained direct access to Azure engineers and Power BI engineers,” he says. “The exercise not only accelerated development of the product but gave us the belief that we could use Microsoft technologies to pull the whole thing off.”

“Microsoft gives you the ability to develop technologies quickly, and this is important to us as a small company that needs to be dynamic and agile”

His experience makes him an unabashed fan of Microsoft technologies. “Microsoft gives you the ability to develop technologies quickly, and this is important to us as a small company that needs to be dynamic and agile,” he says. “In addition, they provide enterprise-grade solutions, which minimise our tech support demands.”

Max’s only gripe at the moment is “that I’m 50 years old and that a) I’m not going to get a jet pack, because that’s not going to happen in my lifetime, and b) it would be nice to be 20 now because I feel that some of the most amazing technology is just around the corner.”

Just don’t ask him to do the tiling.

“Absolutely not!” he says. “When I quit tiling I had a ceremony and I burnt my tools so I’m never going back to that.”

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