Monday 25 June 2018

The Corkman behind technology set to consign shop checkouts to history

Alan O'Herlihy's Everseen brings artificial intelligence to global retailers, writes

Alan O’Herlihy is making waves with investors both here and in the US with his technology company Everseen. Photo: Malcolm McGettigan
Alan O’Herlihy is making waves with investors both here and in the US with his technology company Everseen. Photo: Malcolm McGettigan

Gabrielle Monaghan

For four days in November, Alan O'Herlihy left his normally constantly-pinging phone switched off as he immersed himself in a retreat for chief executives in Florida led by Tony Robbins, motivational guru to the jet-set - from Hugh Jackman to Kanye West - and star of Netflix documentary I Am Not Your Guru.

Alan, the founder and chief executive of Cork-based retail technology firm Everseen and a long-time fan of Robbins, says "people spend up to $11,000 each on attending these events and there were thousands of them there, so he must have made at least $16m over that weekend alone".

The setting was a far cry from the 43-year-old's roots in Glenville, a tiny village 12 miles northeast of Cork city where Alan still lives. At the age of seven, he cut his teeth in the retail business by working at the counter of the now-defunct grocery shop in the village that was owned by his "workaholic" parents and founded by his grandfather.

By the time Alan was studying at University College Cork, he was spending his free time selling coal, turf, meat, milk and butter off his father's mobile grocery truck to customers living in the remote areas of the county. "My grandfather started that delivery business with a horse and cart," he says. "He would often use the barter system - some customers paid with turnips. We also had a hardware shop and back in the day, we were making nearly IR£1m.

"As my daughter reminded me recently, retail has come full circle, with Tesco now doing home deliveries. Retail hasn't really evolved much from those old days."

During the heady days of the Celtic Tiger, Alan set up his own retail business, a fast-food franchise with three outlets in Cork city. He was forced to shut down the franchise a decade ago, when the recession struck.

"It was a terrible experience and people would frown upon you here, but in the US, failure is a badge of honour and I think investors love that I had that experience," Alan says.

"The US clients I work with know that Everseen has retail in its DNA."

Alan credits Robbins's techniques, as well as Thai boxing and meditation, for helping him get back on his feet. As he did so, he became fixated with solving an age-old problem in the industry that had dominated his life: point-of-sale shrinkage, the retail industry's term for losses at the checkout caused by theft, carelessness, or customer scanning errors.

He set up Everseen in 2008 and hired an operation in India, where he had previously subcontracted work during a former job as an SAP consultant, to track how retail revenue goes missing. But the process was so cumbersome that Alan, a qualified software engineer, set out to identify and solve the problem himself. Two years later, with a grant of €100,000 from Science Foundation Ireland and €25,000 of his own money under his belt, the entrepreneur visited Dublin City University's performance engineering laboratory.

There, he sponsored a Romanian postdoctoral researcher who would become his chief technical officer. Together, they established a research hub for artificial intelligence and computer vision systems in the Romanian city of Timisoara.

The scientists were successfully tasked with developing software that could detect when, where and why supermarket inventory was not scanned and send an alert - as well as an image of the non-scanned product - to staff within three seconds.

In recent decades, non-scans at a checkout have been typically detected by retail staff monitoring CCTV footage of a terminal or by manually sifting through video recordings. But, as Alan points out, the human eye can only process one image at a time, or just 5pc of all non-scans at a checkout. Everseen's digital eye, a combination of video analytics and AI, has been trained to detect almost all non-scans. The software was trialled at 100 retail outlets in Ireland and is now used by five of the world's top 10 grocery retailers. But, never one to sit still, Alan moved onto his next challenge: vying with the world's largest online retailer to become the first to roll out checkout-free technology in shops.

In November, Everseen revealed that it was testing technology it calls 0line (pronounced "zero line"), which eliminates the need for customers to queue at checkouts, at a convenience store on French Church Street in Cork city centre.

After opening the concept shop to the public for two weeks, Everseen learnt from the operation and will open another full-service convenience shop - likely to be operated by Musgraves - in Cork and Dublin later in the spring.

Shoppers will be able to make purchases without encountering any tills, instead approving payment via an app. The checkout-free shops will use a network of smart devices on shelves to detect when customers take or return items and use facial recognition to check if customers are registered to pay with the app.

Amazon unveiled its first checkout-free shop to the public in Seattle in January. Called Amazon Go, the online shopping giant's first physical - albeit till-free - store had been beset by technical glitches and its rollout encountered a series of delays. Alan says Everseen is in a better position to rollout checkout-free technology because it has been working on the solution for longer and can do so at a lower cost.

The opening of Amazon Go "is positive news for our business because they've created a market in which there's no supply," Alan says.

"They built something that cost a fortune and is not scalable but we reached the scalable stage last year. We are the only ones in the market who can supply this technology and all the retailers are looking at us. It's like Uber coming after the taxi world."

Everseen is also on the brink of launching yet another product: a supply chain management system that "can think for itself", Alan says.

The automated system, which is being trialled at Irish retailers, involves cameras that monitor stock that comes into and leaves the back of shops and enables smaller suppliers to check in stock themselves.

Everseen's geographical and product expansion has paid off: revenue at the company rose by about 12-fold last year and is set to grow 20-fold in 2018. It employs some 150 people, including those who work at an office Everseen opened in New York last year. Alan plans to open a second office in the US, where he currently spends one week out of every four.

The 10-year-old company's innovations have not gone unnoticed: since its inception, Everseen has raised some €16m from investors, including from heavy-hitting entrepreneurs such as Total Produce chairman Carl McCann, Trintech founder Cyril McGuire, and former Tayto crisps owner Ray Coyle. One publication recently dubbed Everseen as "one of the buzziest things to come out of Cork since the Sultans of Ping FC".

The technology company may be making waves with investors both sides of the Atlantic, but Alan is determined that Everseen doesn't lose sight of its Cork heritage.

"When a group of investment bankers came over from New York to see us, we brought them to a pub in Watergrasshill," he says. "This place has an open fireplace and hasn't changed in 50 years."

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