On this week’s episode of the Full Stack Leader, we’re talking with Yuval Elshtein, the CTO at SpaceNK
SpaceNK is a premiere luxury cosmetics and beauty retail company. Yuval explains how their use of technology is focused on giving customers a luxury experience, including the ability for store colleagues to work one-on-one with customers. They discuss using data to tailor the selection of products in each store to suit the customers’ needs.
Yuval also predicts that AI, including large language models, will become prevalent in business, but the human element will always be critical. He predicts that the future of retail is in simulation, with AI being used to optimize store layouts and promotions, making business decisions significantly easier.
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You can also visit the SpaceNk website Here
Ryan: Hello everyone and welcome back to this week’s episode of the Full Stack Leader Podcast This week I am, of course, at South by Southwest 2023, talking to some great innovators and people who are helping take technology into the future. Today, I’m excited to be sitting with Yuval Elstein. He is the CTO of space nk.
Out of the. And they uh, do cosmetics and beauty, and I’m a bunch of amazing retail space stuff, and I’m excited to hear what his perspective on the future of retail
Yuval: looks like. Thanks. Happy to be here. Yeah, great
Ryan: to have you. So, retail has really been transitioning a lot over the last decade or two.
And, and really finding blends into the digital system, obviously, but there’s also a lot happening. In store as well. What are some of the biggest things that you see coming up over the next little bit that, that are going to help evolve retail and e-commerce to the next
Yuval: level specifically?
Right, so this, this is the thing we think about a lot because we try and give our customers a luxury experience. We try and make them feel like they’re warm and welcome, and a lot of the tech that we put in place is to free up our store colleagues so that they can work one-on-one with as many customers as possible.
We give them the tools to help them see what a customer’s past purchase was. Give them some recommendations based on what customers might have put put in online and a lot of the back of the house stuff that they need to do, like in inventory management, and putting things away. We, we try and make that as easy and as fast for them as possible so they can give a customers the right attention cuz there’s nothing like the human touch.
Ryan: That, that makes sense. Do you think that the, the customer and inventory relationship is going to get, Faster and more effective over the next little bit using that data?
Yuval: Absolutely. So one of the things we, we constantly look at is getting the right product into the right stores. We have 80 stores in the UK and we always wanna make sure that we have the right . Selection cuz you can’t have your entire range available online uh, available in that particular store.
So you try and understand who your potential customers would be. We have some huge stores in, in some central London locations where you pretty much. Stock everything. But in our smaller niche boutiques, we try and tailor what we have and make sure we have it at, at just the right quantity.
Ryan: Yeah, I’m sure.
I’m sure you see lots of applications for ai. Large models that you can work with. Probably large language models, but also some other models that are gonna be interesting as well. How do you see that impacting kind of in-store experience over the next little bit and maybe looking at 2030, is it gonna dramatically change things?
I think the
Yuval: whole store experience and the whole omnichannel. Currency is about to be revolutionized. Yeah, there’s a lot of great ideas here at South by Southwest on what people are experimenting with, how they use the app to supplement the customers in-store experience. There’s a lot of stuff there that we want to experiment with as well.
So I’ll break down your question into multiple categories. Yeah, yeah. Large language models chat, g P. At a fundamental level, I think by the end of the year, there’s not gonna be any business that isn’t using it in one way or another, whether formally or informally. Doesn’t have to be open AI chat g pt, but it will be a large language model of some sort.
Yeah. To short circuit old work that people just don’t want to be doing or spending a lot of time on. However, the human element is never gonna go away. It’s always going to be a combination of the two. So if you ask me about the future in 2030, I think that’s still gonna be prevalent. We will have maybe a general AI that can do a significant amount of things for you, but it’s, it’s the collaboration with the humans that’s always going to be critical.
Where I think everything is going though is this idea of simulation. I think that we are getting closer and closer to the point where AI is good enough, where you can ask what if, what if we did this, or what if we did that, and can you maximize and optimize what our store layout needs to be, what we need to do in terms of promotions across the.
So being able to run a variety of different scenarios based on your thoughts and getting those results quickly so you can effectively drive your business forward. By understanding what the alternatives are and finding the best path today, it’s a lot of gut instinct and, and creating very complex models.
In the future, I believe that’s going to become significantly easier.
Ryan: Yeah, that makes sense. Do you think that along with some of the, the challenges that you’re trying to solve within the, the omnichannel environment, you’re also looking at some innovations happening on the supply chain side and by the time it reaches you that there’s better optimization all the way through?
Yuval: Absolutely. So one of our biggest challenges last year, because. Everything was getting getting our products , in store online, just having the product. We, we have this metric of supply, our, the stock, which means we know there’s going to be demand for it, but we just can’t get it. And we look at supplier lead times, but there’s been so many issues with supply chain last year that we’ve had to be, become very creative in.
First of all, how do we plan for supplier shortages? One of the things we, we, we do to sort of encourage our suppliers to give their product is we give, for example, we, we sell a huge range of lipsticks. So we give you alternate brands that have the exact same shade as what you’re looking for. You can’t usually get that from the, the name of the product.
For example you know, Crimson, it can be 15 different shades. And you know, it color is important. So we scan each and every product and, and we use AI to come up with a suitable alternative depending on how it will feel on you and however reflect. So that’s one thing where we, we make it transparent to our brands that if you don’t get your most desired products into our.
We’re gonna tell our customers this is, this is an equipment. Yeah.
Ryan: That, that makes a huge difference as well. Absolutely. Do you think do you think that iot will become a, , bigger aspect of the shopping experience as well? Like that you will begin to start to see more smart devices throughout the store that people can interact with and engage
We’ve done a lot, a few experiments, yes. With iot in store, trying to see whether we can give you a suitability rating for a product. Trying to see whether we can highlight certain brands, certain products. We definitely, sometimes, For specific brand launches. We, we try and think about what would make this be a unique experience.
We’ve not really found any breakthroughs unfortunately, in that space, but it, it is a thing that we’re constantly thinking about more. Just as you would be thinking about RFIDs, nfcs smart tags in the store, maybe show some. User generated content that’s related to the product. So when you’re in the store you can see, oh, this per specific influencer that I like did a little video on it and linking them to that.
Yeah. So there’s a lot of things that we’re thinking about, but there’s no magic just yet. Yeah.
Ryan: I’ve been, I’ve been following some of the Amazon store developments. And like in-store experiences with you know, using really kind of automated checkouts and things like that. And it’s interesting to see how they’re coming together into this kind of seamless buying experience that ties in with the online experience.
Is that, is that something that you think you’ll really be pushing towards over the next little bit as well?
Yuval: Yes. We, we have experimented with a variety of, of experiences where the customer who just wants to come in and, and buy their stuff, they don’t need advice, they don’t need to work with a colleague.
We are experimenting with a variety of ways of just letting them get the stuff that they want without necessarily going to the till, but just checking out online even though they, they have the, Product in store and, and with a variety of different experiences in that way. What, what we tend to find, because we are, we’re more luxury product than customers that come into our store.
They want to experience the store. Yeah, that makes sense. So, so our general view is if it, if this, Takes you away from being in the moment in the store, from experiencing what you want to experience in the store. We, we, we don’t do a lot of it, and a lot of the time what we found is our customers don’t wanna take out their phone while they’re enjoying the experience that they have in the.
Storm. So we’ve done a few experiments there and we, we will continue to do it, but as long as it doesn’t take you away from the experience and enhances it, that’s our
Ryan: approach. Amazing. Well, it’s been awesome to get your insights on the future of retail and what’s happening, and I know the show has tons and tons of ideas built into it, and I can’t wait to see what you take away from it.
Hopefully we get a chance to catch up soon and, and talk a little bit more about engineering leadership itself. Well, thanks so
Yuval: much, Ryan. It’s great to be here. Pleasure. Yeah. Thank you so much.