INTERVIEW WITH FABRIZIO FANTINI - Radio Flash 97.6
“Off the air - stories and real-time rumours” by Gianluca Gobbi
Italy, May 31, 2017
Gianluca: "Before the Popular TGR Network at 10.30 A.M. we broadcast an interview made in the Toolbox locals with Fabrizio Fantini, CEO and founder of Evo Pricing. In particular, we will talk about an application that allows users to combine artificial intelligence and human intelligence as a source of help. Here’s Fabrizio Fantini of Evo Pricing. Happy listening!"
Fabrizio: "First, let's talk about decision support systems. I always like to compare our system to a satellite navigator. Certainly, for this job a driver is needed, but let’s skip the directions from the auto-pilot.
The satellite navigator is a help to the person to process a great deal of information because traffic, one-way streets, roadworks, and so on, are impossible for a person to synthesize in real time. However, the ultimate responsibility for the decisions remains with the driver. With managers, we work on the same principle.
Pricing, in particular, is a very complex issue and, with every company having unique challenges it would be impossible to replace the intuition and the market knowledge that the manager on the ground has. Of course, it is also true that, with ever-changing markets, with the explosion of available data and with the acceleration of competitive dynamics, without decision support tools, it is very difficult to remain competitive."
Gianluca: "So the concept of continuous improvement is fundamental. Evo Pricing was born with an immediate link to a university, which is also central to the theme we are going to talk about today."
Fabrizio: "Yes, indeed. 4 years ago, we were lucky to meet illustrious professors who were creating the course in Stochastics and Data Science, which is the first master’s degree exclusively devoted to these themes in Italy: a course fully taught in English with an international breadth.
From the first day, we saw the opportunity to join with the University of Turin. We work with them both for research, where we find truly world class academic excellence (we produce publications with Harvard and with other prestigious universities), and in the area of recruiting. We have candidates in continuous development thanks to the university and I have to say that all those we see, even those we don’t hire, they always find a job, so it is a symbiotic relationship that works for both sides."
Gianluca: "A lot has been said about the first graduate who, in fact, has already shown how the relationship between academia and work really is concrete. She found a very stimulating and very difficult business, (we could say ‘complex’ from the point of view of studies) which, however, allows her immediately to be younger yet ahead of other graduates."
Fabrizio: "Yes, and I must say that work is always a mutual fit so what we see is people who like the kind of work that contains intrinsic intellectual curiosity, abstract and theoretical complexity.
Those who like this type of job have a lot of exciting opportunities from the first day, indeed from three months previously because, typically, there is a three-month internship course in the context of the thesis in order to get instant access to the decisions that influence the profits of companies. This is because, while we talk about pricing and promotions - decisions that really have an impact on the business - typically, on the other side, they are dealing with very senior interlocutors like the CEO or the chief of marketing. So, you have, from the first day, not only a job that is very important today, but also impactful work, a complex job and stimulating work where you have access to people. Definitely many interesting aspects involved."
Gianluca: "This application is named ‘borsino’ because it creates a real relationship within the clothing chain between the shopkeepers and the managers of many shops that is hard to be controlled at central level. Thanks to this application, it is possible to reach the typical goal of all traders; that is, the customer comes to a place to look for exactly what she or he needs and, from the seller’s side, it is important to have the item already available. All this is based on data analysis, weather and past sales, but it also allows dialogue between the various companies belonging to the same group.
In this case, we return to the topic we started with: shopkeepers are people who are in direct contact with customers, they receive a proposal that comes from data processing but, in the end, they will make the final decision."
Fabrizio: "Yes, congratulations, because your understanding of the phenomenon is absolutely spot on. Thematically we started from presuppositions at the level of fashion: so we’re talking about fashion. Clothing in Italy is still world-renowned for excellence and it's not a coincidence that this application that we have developed in Italy, together with the University of Turin, for an Italian customer, is definitely an innovative application on the world stage.
What is the underlying problem? The issue is that, in the fashion industry, the product life cycles are very short. So, let's talk about five, maybe seven weeks for seasons, and the distribution of articles and sizes is pretty much capillary so, in a single store, maybe we can find only two pieces of a certain size. So, you understand it's absolutely impossible for a predictive model to wait enough time to give an accurate estimate. That is to say, when you have the data, even if you have it, it's too late because the life cycle is over.
So, we asked ourselves what to do in addition to aggregate analysis, that is to say, the store-level forecasts, to give a more accurate forecast, a more granular, more specific forecast of product and size, and from this was born the idea of testing the intuition of shops.
We definitely took a chance - it wasn’t absolutely certain on the first day - and we have shown (which fact I am personally very proud of) that human intuition under certain processes and constraints can win against artificial intelligence and also the physical store. Even in the online world, towards which we are going, it still has an important role to play as information, as knowledge of the customer distribution. It happens trivially that every week, the shopkeeper has the opportunity to vary a proposal for the assignment of goods and this is a simple way to create an incentive to optimize the goods that s/he receives compared with their understanding of customer’s tastes.
This creates a dynamic demand and supply because, obviously, the shopkeepers’ requests are a snapshot of what are the most and the least popular articles and, according to this, the retailer can decide what to order, what to send and we can understand prices and promotions even 6-8 weeks ahead of the actual sale, so this gives us a very strong signal."
Gianluca: "Data that involves various elements: sales, logistics, warehousing and storage - that is often a real nightmare for a company's management. Can this application can be used in various industrial sectors and not only in the clothing area?"
Fabrizio: "In fact, we have customers today from four countries: Italy, England, the United States (in particular, California), and Mexico.
For different reasons (for example, England and Mexico have had major changes in currency over the last year, with the pound and Mexican peso losing value), there have been strong pushes for innovation, and yet our general theme is that we work in various countries, in various product sectors. In Italy, of course fashion, because it is a sector of great importance to our economy, but we have customers in fresh products, accessories, electronics and even taxi companies, that is, the problems that we solve are universal even if our customers are unique."
Gianluca: "We always pay very close attention to those who studied abroad and then decide to return to Turin to invest, to push the accelerator on the theme of innovation. More because the ecosystem is attractive, more the whole big picture, which is now reasoned in terms of metropolitan area, has benefits."
Fabrizio: "Yes, it is absolutely so. Indeed, personally I have a path that summarizes this a bit. I’m Italian. I lived abroad for 10 years - 3 years in the United States and seven years in England - and I decided to bet on Turin, and more generally on Italy, because I believe that there is great undeveloped potential. Moreover, I think the brain drain idea is nonsense because the problem is not the people who go away. The problem is the ability to attract both those who left to come back and even new people who may have, in spite of the language, an interest in coming here.
And I have to say, for example, that the Master's Degree in Data Science has attracted American students from the first day, so it is not true that it is difficult for linguistic reasons; certainly, in that case, English helps but it is not true that it is difficult to attract people.
From my point of view, Turin has a great potential because of what I already pointed out, but it also has an untapped potential because it is a livable city, a city where there is a great culture, a great ability to do research and bring new ideas. It also provides geographically and logistically a proximity to Europe and a proximity to Milan and other major cities in Italy. Accordingly, I believe strategically it is a fantastic starting point for new activities like mine or even for large companies such as Amazon, which has announced that they want make a big opening investment here. Because of this, I think for the next few years, there are definitely some great opportunities."
Gianluca: "What advice can we give to those who already have proven math skills, who are interested in computer systems? We are talking about jobs, really interesting jobs."
Fabrizio: "Today the truth is that these are areas where employers are struggling to find people. It is true that one side complains about unemployment and the difficulty of finding work and certainly this is true for certain types of professions. However, the world has changed and therefore, inevitably, the jobs that our parents - and still my mom, by the way - would like us to do are in the public sector, which is considered the most secure employment available. Despite my no longer being so young, I have not yet surrendered to this underlying idea. But the truth is that, today, we compete in a global market where basic jobs are done in China and India at low cost and therefore, inevitably, we need to train for different professions. In the IT field, in the mathematical field and, more generally in the scientific sector, there is certainly more demand than job supply."
Gianluca: "Last May 16th, Fabrizio Fantini was one of the speakers at the conference titled "Managing Decisions in the Big Data World", linked in particular to fashion at SDA Bocconi.
On June 8th, he will be a speaker at the Chamber of Deputies in Rome on the panel "Traveling in Italy working and innovating: Barcamp with stories of excellence in the new trends of work".
We wanted to give important pointers to those who have strengths in the field of science and want to get involved because there are really areas in which the vistas to explore are huge. So, really take into account what we have discussed because, even at the university level, and then at the work level, there are some great opportunities! From Gianluca Gobbi, see you next time."