Automation using artificial intelligence. While online retailers were born in the IT paradigm, the traditional retail, that for a long time existed as a system of warehouses and shop windows, is just starting out with digitalization. For example, services have started to appear that allow digitizing how customers behave offline: whether they just look at or try on things. Thanks to these services, store employees can make decisions based on data rather than on their own experience or intuition, as they used to before. Today, almost any process in retail can be optimized using IT. Its applications include voice assistants that take over from call centers, Out of stock control using computer vision, improvements in the quality of staff work, security improvements, and many more. DetectoLabs, for example, offers several applications of computer vision in retail: out of stock control, personnel performance control and task management and antifraud.
As part of our series about the future of retail, I had the pleasure of interviewing Alex Kiiatkin, co-founder and CEO of DetectoLabs. He ended up in tech entrepreneurship in no ordinary way. He first worked as a journalist and then created advertising campaigns for retailers in Eastern Europe. Alex saw how the market was being transformed by technology. And together with his friend, Ilya Viksinin, Alex developed his own technology that solves a 1 trillion dollars problem by taking stock management and workforce management to a new level.
Thank you so much for joining us in this interview series! Can you tell us a story about what brought you to this specific career path?
I worked in journalism and B2B-marketing for more than 15 years and never thought I would become a technology entrepreneur, much less a tech entrepreneur. Of course, I dreamed of working not only on texts but also on products some day, but I had no idea what they would be like.
Everything started the day I interviewed Ilya Viksinin, a scientist, ITMO University associate professor, and my future co-founder. Ilya specialized in multi-agent systems and researched, in one of his studies, how people behave in a stressful situation — very much like ants and bees, as it turned out. We discussed this issue in the context of an article on risk management that I was doing for some magazine.
At some point after the interview I had an idea: what if we used knowledge about how people act in stressful situations to accomplish practical tasks? For example, to analyze emergency situations and reduce the resulting damage.
We started thinking of practical applications for Ilya’s research. But selling knowledge about multi-agent systems proved to be not an easy task. While we were studying the market and looking for opportunities, though, we learned to work with computer vision — to recognize people on video and to determine their behavior. Computer vision technology is useful in many areas: transportation, retail, and others. That’s how I went from being a journalist to being a startupper and, together with Ilya, founded DetectoLabs.
Our computer vision system is really innovative — algorithms, with the help of the swarm intelligence technology, analyze how a variety of objects interact with each other.
Can you share the most interesting story that happened to you since you started your career?
Working as a journalist taught me a lot. The very beginning of that career was an important experience which I remember until now and which I think of while creating a startup in the computer vision area.
I did odd jobs creating texts here and there. But I dreamed about working in big journalism. And one day I just wrote on social media to the deputy editor-in-chief of the most influential newspaper in my country. A shy boy with no experience whatsoever writes to a well-known editor who has never seen him before and asks to be hired. That’s about as good as fighting a losing battle. I realized it as soon as I clicked “Send”. And that idea got rooted in my mind when I did not get an answer either the next day or a month later.
The editor replied three months afterwards when I had already found a good enough job with another media outlet. And I traded the good job for the dream job that allowed me to work for a million people audience, to meet Barack Obama at some point, and to learn a lot about people in general and myself in particular. Conclusions? A few can be made.
– No doors can be considered closed
– Strangers will often be happy to help you
– What you consider a failure can turn into a triumph — you just have to keep working and be patient
It’s hard to overestimate those lessons now that I’m developing a startup of my own.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson or takeaway you learned from that?
As far back as about 10 years ago, I was already a nerd. So I definitely was among the second, if not the first, wave of those who got interested in bitcoins. Like any self-respecting nerd, I had a gaming computer. And I started mining, just for the sake of it. Because I liked the concept of money being completely digital. Quite quickly I totally forgot about it, although the mining software continued to run on my computer for a while. In those days, bitcoins were practically worthless.
A couple of years later, I decided to buy a new computer. And I donated the old one to an orphanage. The bitcoins I had mined were stored locally on my computer’s hard drive. I don’t even remember exactly how many of them there were. But what I do know for sure is that now each of them is worth more than 10,000 dollars.
That story, as well as a few more investment undertakings of mine, convinced me that I would never make fast and easy money — meaning I had to earn it persistently and consistently.
Are you working on any new exciting projects now? How do you think that might help people?
Our project, DetectoLabs, is a system of CCTV cameras inside the store which helps manage stocks in real time and organize the staff work.
And we designed our technology in such a way as to create a win-win-win-win situation. The product allows:
– store owners (retailers) to increase revenue, because we reduce out-of-stock rates.
– producers to get more profit, because we provide them with real-time analytics about sales and on-shelf availability of different goods.
– store employees to get less tired because we reduce the burden of shelf control.
– shoppers to always find the right product on the shelf on time.
Which tips do you have for the colleagues in your industry to help them to thrive and not “burn out”?
When one takes up studying sales, they are sure to hear the following: “Get your first 200 rejections for starters, and then it’ll get better”. This knowledge helps me. There will be many failures, but the more you lose, the more likely it is that the next step will bring success. Each attempt is something that narrows your focus and guides it in the right direction. When you launch a startup, at first you’re clueless about which way to go. Then you make the first step. If that step leads to a dead end, you turn a little and move in a different direction. In the end, a great deal of similar steps, both erroneous and successful, will lead to a certain result. There will be lots of attempts. But the more there are, the closer you get to your goal. This idea always supports me, especially during times when each of the many consecutive steps you make takes you literally nowhere.
None of us can achieve success without some help along the way. Is there a particular person who you are grateful to who helped get you to where you are? Can you share a story?
I’d like to tell the story of how I met Fyodor Ovchinnikov, a Russian entrepreneur. He once established a bookstore that failed. Fyodor didn’t give up and opened a pizzeria in a basement in Siberia. Today, Dodo Pizza is an international network of pizzerias that make active use of IT technologies.
At the beginning of our journey, Ilya, my cofounder, and I came to him to pitch our computer vision system. We were completely inexperienced. Fyodor welcomed us: we saw, for example, that he didn’t have a separate office and that he worked in an open space together with his team. He asked us some really stressful questions about our system and our product, many of which we weren’t able to answer at the time. But he asked them in a kind way. And the questions were asked from the perspective of the end user of the system, so they opened our eyes to many aspects of our product.
By the way, we ended up launching our pilot project in Dodo Pizza analyzing the traffic of pizzeria guests. Later on that pilot project was a huge help to us as far as talking to clients and investors was concerned. Fyodor’s assistance was immeasurable. The questions he asked and the pilot project we ran were equally useful.
How have you used your success to bring goodness to the world?
Most importantly, we help people save time. And saving time means a few more minutes and hours you can use to your advantage — for example, devote them to your family.
Ok super. Now let’s jump to the main question of our interview. Can you share 5 examples of how retail companies will be adjusting over the next five years to the new ways consumers like to shop?
1. Ecological compatibility
Modern generations are very proactive in environmental issues, and companies, retailers included, will have to take this trend into account when making their business plans. Here are some facts:
– A survey of ten thousand people aged 18–25 showed that 41% of them consider global warming to be the most important problem facing the world. Environmental pollution comes second (36%).
– A survey by Dell Technologies showed that 38% of Generation Z representatives want to work in socially and environmentally responsible organizations.
You can be environmentally friendly in different ways: for example, by opening Package Free stores or collecting unused things in shop corners.
2. DTC (direct-to-consumer)
Many shoppers, especially younger ones, crave different things than their predecessors, including active involvement with their favorite brands and a sense of authenticity from businesses. That’s manifested itself in the approach endorsed by many fresh-on-the-scene DTC brands which boost social media followings by interacting with shoppers and encouraging customers to give feedback that is frequently incorporated into future products. They’re fostering not just customers, but true fans. Such DTC-retail-startups as Away, Casper, Glossier, and Rent the Runway have also all earned the title of Unicorn companies.
3. Data-driven everything
Retail, both online and traditional, has many ways of using big data: marketing, merchandising (it’s faster and easier to describe tens of thousands of products with the help of machine learning technologies than manually), balance forecasts, logistics, and recommendation systems for customers. Moreover, even the launch of new products can be data-driven: based on the purchase history, you predict right away that this product will be acclaimed by customers. According to Mordor Intelligence, big data analytics on the retail market was estimated at 4.18 billion dollars in 2019. Its value is expected to reach 13.26 billion dollars at the end of 2025 registering a CAGR of 21.20%.
4. Online and offline blending
Amazon is opening offline outlets, and Walmart is actively developing online sales. Online market players are trying offline models to enrich customer experience. And traditional retailers are actively developing online channels in order not to miss out on this share of the market.
Blending of online and offline is also happening at different levels: you can order something online and pick it up offline at a nearby store. Another example: during the pandemic, many retailers started using their outlets as Dark Stores.
The challenge of this trend is to match what a person buys online to what stores he frequents offline. Computer vision could be an aid that recognizes a customer and, based on a variety of their online data, offers them personalized promotions while they are at an offline store. But the market is bound to face hot discussions on how not to cross the privacy line.
5. Automation using artificial intelligence
While online retailers were born in the IT paradigm, the traditional retail, that for a long time existed as a system of warehouses and shop windows, is just starting out with digitalization. For example, services have started to appear that allow digitizing how customers behave offline: whether they just look at or try on things. Thanks to these services, store employees can make decisions based on data rather than on their own experience or intuition, as they used to before. Today, almost any process in retail can be optimized using IT. Its applications include voice assistants that take over from call centers, Out of stock control using computer vision, improvements in the quality of staff work, security improvements, and many more. DetectoLabs, for example, offers several applications of computer vision in retail:
– out of stock control
– personnel performance control and task management
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
I would launch free philosophy courses around the world. And a variety of schools would be taught there — you would be able to study Stoicism along Hedonism. I believe that today many people often lack foothold, and namely some frame of reference, a reliable system that would indicate what’s good, what’s bad, and how to make better decisions. That’s really a source of anxiety, concern, and vacillations for many people. Philosophy does not force you to be religious or accept any dogmas, but it offers you a frame of reference. Or rather, many frames. Having one of them as the basis for your decisions is better than not having any. Philosophy would be a huge help in reducing anxiety across the world.
How can our readers follow you on social media?
This was very inspiring. Thank you so much for joining us!