EPISODE 008 : 04/29/2021

SnowShoe CEO Ned Hayes on Launching the Spark Tap, a New Retail Innovation

Ned Hayes

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Ned Hayes, CEO of SnowShoe and long-time identity and retail innovator, describes the current retail scenarios that led SnowShoe to create the Spark Tap, a revolutionary new hands-free device that can securely and safely log retail loyalty events. Joined by market researcher Ashley Coates, they discuss the arduous path towards innovation. Engineering hurdles included scaling a prototype, sourcing electrically-conductive plastics and lighting a 3D printer on fire!

Host: Ashley Coates
Guest: Ned Hayes

Topics Discussed in this Episode

  • Detailed small business insights from Olympia, Washington
  • Small business resiliency and adaptation during COVID
  • Doubling community outreach during the pandemic
  • Opportunities for small business loyalty programs

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Audio Transcript

Ned Hayes [00:00:06] Welcome to SparkPlug, where we talk to smart people working at the intersection of business and technology. Brought to you by SnowShoe making mobile locations smarter. Well, today we have a special treat at SparkPlug, we’re introducing Ashley Coates as guest co-host today.

Ashley Coates [00:00:24] I am so glad to be here Ned, thanks so much.

Ned Hayes [00:00:27] It’s fantastic to have you as a member of the SparkPlug team because we’re learning so much about retail and so much about technology, and I think you’re actually going to be turning the tables on me, right? 

Ashley Coates [00:00:38] Yes, I have the privilege of interviewing you today. You can do so many wonderful guests in the past, so now you’re in the hot seat. 

Ned Hayes [00:00:46] I hope I’ll be able to ask about some of your research as well. 

Ashley Coates [00:00:50] Yes, absolutely. I have actually some great conversations recently with SnowShoes engineers and very excited to share what I’ve been learning from them. So yes, let’s get going. Ned, what are the things I wanted to ask you about? Is the retail market right now? I understand you’ve been doing a lot of research around the retail market, and I’m just curious what you’ve been finding. 

Ned Hayes [00:01:14] Well, retail right now is in a really interesting place because we’re at a kind of sea change, a transformation of the whole industry. I talked to all these leaders in the retail space, and they’ve said that trends that they saw coming for the past 10 years have just been accelerated overnight in the past past 12 months during COVID. Everything that they saw happening 2025 have now really come to fruition in good ways and in bad ways that trends that have had larger, like big-box stores decline. Those have really accelerated, and trends that have hit small retailers hard have accelerated. But by the same token, things that retailers have been doing to reengage customers. Those have also changed in a positive direction. The momentum has shifted for retail in massive ways. 

Ashley Coates [00:02:06] That’s wonderful to hear that 2021 is looking a little bit different. Can you tell us about what you’re seeing in the way of technology in retail right now? 

Ned Hayes [00:02:16] Right? So in the past, we had basically three kinds of retail. We had what we call brick and mortar retail, and we had online e-commerce retail and then we had omnichannel, which is, you know, a story that could do both simultaneously and could do them both well and communicate to customers. What’s fascinating about our current moment in time is that omnichannel has shifted direction where every single store has to be online because when people can go to brick and mortar stores, they still wanted to shop at many of those stores. So that was a positive development for many stores. They found that their customers were loyal, that their customers had to engage in a different mode. So that really accelerated or is going online in store without a website, rapidly got a website or got a Facebook page, at least. So this kind of omnichannel experience became very real. It reminds me of the early 90s where people said, Well, you know, I don’t really need to be online as a business. And now if you aren’t online or as a business, you aren’t in business. That’s true for retail today that if you are not online, you are no longer a retailer. So everybody is online. The other fascinating thing I mentioned the acceleration of technology changes that happen, especially with biometrics and with touchless technologies that if you’re able to actually do a transaction without having to use your card without having to pull cash out of your wallet. This makes a huge difference. And it’s made the biometric authentication factors really preeminent. So back to two, two or three years ago, Amazon was experimenting with their Amazon Go stores, where you could just walk in and buy something and walk out. And the way they did that was by doing facial scanning, which is one biometric way of authenticating behavior and by by analyzing what customers picked up and walked out of the store with. You’d actually be billed for what you walked out of the store with. And of course, you know you could use your fingers you could use to your palms and other methods to authenticate a transaction. So these are these biometric factors have become a preeminent because people want to be able to use their face to purchase instead of having to touch something or instead of having to interact directly with a cashier. 

Ashley Coates [00:04:38] Right. 

Ned Hayes [00:04:39] I do think this has implications for transaction security. So if you go in in the Amazon Go store can walk in and with your face and with your actions, pick something up and walk out with it and be billed for it. Does this have implications for shrinkage? And as we all know, shrinkage is a term of art in the retail industry to describe shoplifting when people have goods on the. Ourselves and those goods are gradually disappearing. That’s called shrinkage. So if you’re able to have cameras in your store and you’re not only just seeing somebody who’s a shoplifter and sending security after them, but what if you can see somebody who walked out with something they didn’t actually pay for? What if you just build them for it? What if you knew who they were? So maybe the Amazon Go model becomes applied in a different way than Amazon thought about it. So maybe that this has an implication for fraud and how to identify fraudulent activity in the retail storefront? 

Ashley Coates [00:05:40] Do you think after last year, the pace of introducing these new technologies into the retail market will increase? 

Ned Hayes [00:05:48] Absolutely, they will increase. I think that the retail market has really been transformed by a kind of shock to the system. This has been an earthquake that has upended retail, and I don’t think retail will ever be the same. I think it will be so much better for so many people that I can actually get almost anything I need, even from my local retail store, because now local retailers know that delivery matters and they have different ways of reaching their customers. And if I’m somebody who who is disabled or I’m somebody who has social anxiety, this has been a real boon. The drawback is that I think the the necessity of getting people downtown or getting somebody to a small specialty retail district has been diminished that people won’t just go out as much. So I think getting people back in retail districts, it will be a big push for local chambers of commerce for small retail stores who really have an experience to offer not just goods to purchase. 

Ashley Coates [00:06:54] It sounds like you’re speaking with a long perspective on the retail market. Can you tell us a little bit about your history with retail? 

Ned Hayes [00:07:02] Sure. I worked as part of the team that created the Intel retail system that is now deployed. It’s worth billions of dollars for a number of companies worldwide. So a whole system that can help retailers be smarter about their customers, understand customer behavior and then assist customers in getting what they need very quickly. I also contributed to technical innovations used today by Dell, Asus and Amazon to better enable retail experiences in storefronts and online. Before that, I’ve worked in a number of startups that have worked with major retail customers, including consulting work for Target and Fred Meyer, to help them understand the retail experience and how to reduce shrinkage and prevent fraud. I really care about retail technology and making that world better for our customers. 

Ashley Coates [00:07:57] Now it sounds like you really care about small retailers in particular. Can you share more with us about what small businesses in brick and mortar stores are experiencing right now? 

Ned Hayes [00:08:11] Well, e-commerce has done great. They’ve had a kind of perpetual Christmas peak during the past year. Right. And so that’s been great, and there’s actually a phrase in that industry keep the peak. But the peak has come at the expense of small retailers like mom and pop stores, specialty gift stores, stores that sell that sell things that are not just for convenience sake, not just a meal. But, as I said, an experience. Those retailers have been hit hard and I have a passion for them because I believe in building community and in building a sense of place, and I believe this is better for the human race generally. And so being able to build that community means that people need to go to third places, a place that does not work, a place that is not home, a place where people can congregate, whether that’s a bookstore or an art gallery or a theater or even a specialty retail shop. Those third places are absolutely essential for the human experience. And if we lose those places, we really lose something that brings our communities to life. 

Ashley Coates [00:09:20] Absolutely. I couldn’t agree more. They really helped create neighborhoods and the communities that we live in. It sounds like small retailers are really struggling right now. How do you think they’ve been surviving this past year? 

Ned Hayes [00:09:34] Well, we’ve done research with small retailers. I’m so glad you asked. And we’ve done a lot of research with small retailers this year. It’s fascinating to hear how innovative they are. So they’ve been able to survive a number of them by being really resilient and responsive to their customer base. They’ve been able to find new ways to reach their customers. They’ve been able to be really inventive. I talked to a woman named Sophie at  Sophie Scoops that it’s a gelato store, and she actually quickly pivoted and began to deliver gelato. And then she was able to add a gelato food truck. And now that they have in-person purchases again, she now has three revenue streams where previously she had one. So super inventive and her average ARR went up, so she was able to be really resilient. Now. Retailers who are not as nimble, who can’t move as quickly are, of course, suffering, but the ones who have really paid attention to their market are building these special experiences. They’ve actually been able to thrive because they’ve seen customer loyalty as a key. 

Ashley Coates [00:10:43] That’s really great to hear. 

Ned Hayes [00:10:46] And that actually brings me to something that we’re bringing out this month, which is the SparkTap. And so the Spark business, this new product that is really responsive to those types of retailers, retailers who care about customer loyalty, who care about this special experiences and want something that feels safe for their customers but isn’t too technologically heavy? 

Ashley Coates [00:11:09] Yes, it’s been so exciting seeing the development of the SparkTap. Can you tell us a little bit more about this new solution? 

Ned Hayes [00:11:16] Sure. So the SparkTap is a very easy to use loyalty solution that can sit right beside the register, doesn’t require batteries, doesn’t need to be plugged in, doesn’t require integration with other systems. It works with any smartphone so a customer can just come in and tap their smartphone on top of this little thing. This SparkTap and they can immediately register that they were there in the store, so it’s easy to use loyalty. It’s not complex. It’s COVID safe because you aren’t actually having to hand a card to the salesperson behind the counter and get it stamped and get it back. And because you’re just tapping your phone to it, you can wipe off your phone. They can spray off the SparkTap, and it’s very simple. It’s been really fascinating to see that we’ve used existing technologies that SnowShoe had and putting it together in a unique COVID safe way. That’s super simple for retailers two years, and we’ve already received a lot of interest in the product 

Ashley Coates [00:12:19] That is so exciting and so great to hear that retailers are excited about this. 

Ned Hayes [00:12:24] Absolutely. Well, now I think I’m going to turn to you. You’ve actually talked to some of the engineers in the SnowShoe labs that are bringing this to life, right? 

Ashley Coates [00:12:32] Yeah. So I spoke with SnowShoes engineers and got kind of the behind the scenes of the design and creation and development of this solution. It was great to understand their process from start to finish. And really what I learned is that the the whole process is it’s all about problem solving. The fun part of the process is trying to find the simplest solution to the problem at hand, and that only happens through iteration and testing. So I spoke with our lead engineer, Alan, and chatted with him about how he approached this. SnowShoe has been receiving feedback from our current clients regarding our checking devices and the need for a mounted check in device, which is what the tap is. This would allow businesses to have a standalone kiosk with a Check-In station that customers can use by themselves, and it doesn’t require a staff person to hold a check in device. So we’ve been receiving this feedback, so Allen went to look for a solution for a mounted check-in device. So Alan went about starting to create a design for this, and I learned a lot about capacitive technology and how it works. 

Ned Hayes [00:13:53] Well, tell us. Tell us more What is capacitive technology? 

Ashley Coates [00:13:57] I was so excited to learn about this because I did not know how this technology works. So this is the technology that’s used in all of our mobile devices and in touch screens. And what I learned is that capacitive technology needs a charge and that charge doesn’t come from a battery or another form of electricity like that, the charge. And when we use our smartphones comes from our fingers touching the smart screen. When we touch our smartphone screens, it’s sensing the charge from our fingers. And Alan explained that when we use a stylus and we hold a stylus in our hands and touch it to a smart screen, the screens actually sensing the charge from our hands through the stylus and that’s how it was able to work. 

Ned Hayes [00:14:45] So essentially, we’re the electrical charge that is making this work. 

Ashley Coates [00:14:49] That’s what I learned. 

Ned Hayes [00:14:51] We’re marketing right now, but the product, the spark type product is not made of metal. So what’s he doing there? 

Ashley Coates [00:14:59] Yes. So Allen explained that they are using a carbon filled plastic to engineer this this product. 

Ned Hayes [00:15:06] So did the labs team run into any issues in designing this technology? 

Ashley Coates [00:15:11] They did. They were working on their design possibilities, the use of three 3D printer to produce the prototypes for all the design options. And at one point, Allen was working the way on a project, and all of a sudden he started to smell that very familiar odor of burning plastic and down at his 3D printer, and it was smoking. And then all of a sudden, the printer lit on fire. So this was during one of his, I think, 15 different design options. He was trying out it was because he was using plastic that had absorbed some water over time, and somehow all of this together caused the printer to light on fire. But that’s just one of the things that happens, that happens as engineers are working on creating a new solution. 

Ned Hayes [00:16:05] Right? Sometimes sometimes things light on fire. 

Ashley Coates [00:16:08] Sometimes things light on in quite literally. 

Ned Hayes [00:16:11] Right. So they’ve come up with a final design, and this is now being manufactured for retailers. So what’s the outcome going to be? 

Ashley Coates [00:16:20] So during the design phase, they’re printing all of these prototypes by 3-D printers and now to make this more scalable effort. They’ll be using injection molding to produce these devices. And these devices are really ready to go out into the retail market and help retailers encourage in-person shopping, bringing customers back into their stores or their locations, and be able to participate in loyalty programs, check in programs while still maintaining a very safe environment for both customers and staff. And I’ll say the other outcome is Alan got a new printer out of the deal. 

Ned Hayes [00:17:03] Oh, fantastic. Yeah. Well, thank you so much Ashley, I really appreciate the insight that you provided to us on the lab’s experience and the innovation that that came to pass with the team. I’m really glad that we have a great product out there in the market. 

Ashley Coates [00:17:19] Thank you so much, Ned, for bringing me on the podcast. I’ve enjoyed all of your episodes so far and really honored to be a guest host. And and thanks so much for bringing all of these topics to the forefront. It’s really wonderful to be having these conversations as we go into the next stage of retail innovation. 

Ned Hayes [00:17:38] Thanks for listening today to the SparkPlug podcast hosted by me Ned Hayes and brought to you by SnowShoe Snow.sh for smarter mobile location. Spark Plug is a wholly owned property of SnowShoe All Content and copyright 2021 SparkPlug Media.