Verneek’s Deep Technology Tackles Retail Issues

Retailers have a problem — they’re technologically “siloed.”

So says Dr. Nasrin Mostafazadeh, chief executive officer of Verneek, a “deep” technology firm she cofounded with her husband Dr. Omid Bakhshandeh five years ago.

“Every business function would have its own dedicated software,” said Mostafazadeh. “There’s software for point-of-sale devices, software for human resources, for ticketing systems, for managing customer data, for search, the chatbot handling customer service, for powering dot.com.

“We knew that AI would be absolutely perfect for being that element of unification that enterprises historically lacked,” she said. “If you have business functions that don’t talk to each other, opportunities are lost.” At Verneek, “We have this overarching centralized brain providing an end-to-end view of your business, so retailers or brands can make optimal decisions running their businesses.”

The New York-based Verneek is AI-native and domain specific, meaning it’s not a firm migrating to AI, and not a large language model. It’s focused on retail and transforming enterprise data into vertically integrated custom solutions for front- and back-office operations. It breaks down, as Mostafazadeh said, the silos that retailers have been living with. She and her husband both have PhDs in “dialogue agents,” AI software that simulates human conversation through text or voice.

Verneek aims to boost efficiencies, raise profitability, reduce manual labor and enhance the consumer experience. The company has many clients, including Nordstrom, though Verneek declined to mention others. Saks Global seems a possible fit in the future, considering the luxury retailer’s CEO, Geoffroy van Raemdonck, invested in Verneek before joining the retailer in January. He’s among Verneek’s many minority shareholders; Mostafazadeh and her husband are the majority owners.

“We’re all about improving the consumer journey in an end-to-end way,” said Mostafazadeh, during an interview at her Fifth Avenue office where there’s a team of scientists and engineers creating AI technologies for retailers.

She emphasized that different functions within a company should be coordinated and consistent with the information they gather or share. “Say a customer has an inquiry about the return policy for a package. The answer I get from a chat box could be different from the answer I get from a call center because they each use their own software,” Mostafazadeh said. “There’s different software that retailers use for inventory management in the back office, another one for supply chain management, another for merchandise planning or buying, another for pricing decisions and so on. All of these split brains being used is literally a setup for stress.”

Retailers can be selective adopting Verneek’s suite of AI tools. “Our technology is fully capable of any degree of automation, and it’s very customizable,” Mostafazadeh said.

Asked what solutions retailers most often seek, “Number one, it’s a way to automatically enrich product information so buyers or sellers can better understand what they are making a bet on and ultimately selling in their digital or physical stores,” Mostafazadeh said.

“Number two, also for the back office, it’s ‘Vera,’ Verneek’s AI solution that supports executives. It could be a CEO looking in an end-to-end way to understand basically where their business is going, to predict whether or not there’s a problem down the road. It could be for a merchant to decide if they should buy 1,000 units of a dress or 10 units of this dress. It’s decision recommendation, not something that’s fully automated. We just want to be your augmented intelligence partner to help you with better and faster decisions.

“On the consumer facing side,” the CEO said, “the hottest thing we have in the market everyone seems to want is the AI stylist. It’s about understanding the taste of a given consumer along with what they’ve historically purchased and their budget constraints, to put a look together. A woman who could never afford a high-end stylist can actually look glamorous within the ballpark of the opportunities they have. So our AI helps augment either a human stylist or a direct-to-you stylist that you can talk out loud with to get look recommendations. Our AI replaces the search bars and those dumb chat boxes.”

Verneek’s technology solves problems, Mostafazadeh said. “If a store associate sees broken glass in a men’s aisle, just by talking to our AI, they’re opening an incident ticket that triggers a whole sequence of events, sending help, sending a notification on your phone, and even anticipating the level of urgency of the situation,” like if it’s happening at a busy time at a flagship. “It’s a fully automated process. You don’t even need to fill out a form.”

Verneek’s technology ingests the data, in any given form an enterprise might have, including from CRM information or HR documents, creating an “intelligence layer that sits on top of everything without needing to dismantle anything,” Mostafazadeh said. “Over time, you can move out of your legacy software providers. We have department store partners thinking to reduce or completely let go of some of their existing legacy subscriptions. As they grow with us, we enable them to slash the heavy costs from these legacy software providers.”

Asked if major tech providers such as Salesforce and Google could duplicate what Verneek offers, Mostafazadeh said: “It’s hard to turn a big ship. Start-ups, time and time again, have been innovators against big technology companies. And Hyatt didn’t launch Airbnb. A start-up did, not a hotel chain.”

Mention of AI often sparks concerns that the technology will quickly lead to job losses.

But Mostafazadeh sees a longer-term evolution in the workforce and companies looking to do more with the employees they already have.

“Anything we do for [retailers] is ultimately going to save them a lot of money because manual work that was slow and inaccurate ends up being faster and more accurate with AI. What they seem to do is restructure their organizations, perhaps a merch team or a supply chain team. There are retailers who are struggling that may go bankrupt unless they cut costs. And I’m sure in a knee-jerk reaction, they would look at AI as a way to basically lay people off. But the long-term impact is that finally retail would be more profitable, able to grow faster, because with the same number of people, they can do so much more. It’s very important for us as a society to make it right by people at companies that leverage AI to re-skill them, to up-skill them. And I think retail, inherently, is good at that.”

Looking toward the future, Mostafazadeh said: “My dream is for stores to be completely augmented with our AI in a way that it knows everything. It knows the return policy. It knows how to get the attention of a shoe salesperson the second a shopper walks in.” Or if a customer wants to know the hottest fashion items, or perhaps how to wash a cashmere sweater, and the associate has no clue, AI, Mostafazadeh said, could provide an answer for the associate discretely and quickly through an earpiece.

She said many people have offered to buy Verneek. “We are not interested. The mission of the company is to build the most helpful AI, and I’ve spent 21 years of my life obsessively working on AI. All I want as my life’s legacy to have a genuine impact on society. And we saw retail as the place where you can make the most impact through consumers and the employees. So I do not want to sell the company.”

Verneek is a play on the word “Wernicke,” which Mostafazadeh said “is the name of the area of brain that is responsible for language development and understanding. Verneek is a compound noun, with ‘ver’ being the root word for truth in Latin and ‘neek’ meaning nerd plus geek, which hints at some ‘neeks’ getting to the bottom of truth.”