Sramana Mitra: Sounds like your customer base is largely in retail and consumer packaged goods. Is that accurate?
Joe Shamir: Yes, we are also in other verticals but this is the first verticals where you have this phenomena happening by nature of things.
Sramana Mitra: At a large scale.
Joe Shamir: Yes, at a large scale. You can see the Big Data forming earlier. We are also operating in MRO [maintenance, repair and operations]. There is a similar phenomenon in the after-market parts but typically, through the retail structure that goes down to the consumer. This is another example that you will see omni-channel that will also generate after-market parts of Big Data very rapidly, if it’s not already there.
Sramana Mitra: You have very good visibility of a lot of customers in retail and consumer packaged goods. You are deeply involved in how those supply chains are shaping and how the supply and demand are being correlated using this machine learning algorithm. If you were starting a company today, what kind of problems in those domains would look like interesting problems for you to start a new company around? Where do you see open opportunities?
Joe Shamir: The demand analytics today, with the ability of leveraging larger amount of data closer to your end customer, provides you an opportunity to immediately reach for a higher level of automation. We see it in our e-commerce customers compared to brick-and-mortar customers. The brick-and-mortar has a tradition and it’s very hard to change their tendency to override automatic processes. We can clearly see in the e-commerce customers that they are looking for automation and they are able to implement it right from the start.
For example, if we are talking about e-tailers, they’re in a position to implement immediately a highly automated replenishment process that would put them at a huge advantage compared to other larger organizations that still have traditional supply chain processes. I definitely see a major opportunity if more number of young companies are willing to embrace this – not to replicate traditional processes but go to a higher level of automation. There are a lot of benefits and competitive operational advantages that they can gain.
Sramana Mitra: So what you’re saying is basically instead of physical marketers deciding on what promotions to run – where and how to correlate that with inventory planning – all that is going to become automated in due course?
Joe Shamir: You need a longer horizon for that, but today, if you’re able to have a good ROI with your promotions or you’re able to have a better understanding of your customer base, it would be a huge advantage compared to those who are doing pure intuitional bracketing.
Sramana Mitra: Right, approximation.
Joe Shamir: That is very inefficient. Just to give you an idea, the official numbers that a company presented regarding the promotional modeling that I mentioned increased their ROI on their investment by 8%. This goes directly to the bottom line. There is no working capital. This is a very big advantage. If you’re starting a company with 8% advantage in the bottom line, that is a big advantage.