Omni Talk Retail’s Chris Walton and Anne Mezzenga sit down with Rafael Pires, Head of Tech Experimentation at MC Sonae, live from the VusionGroup’s podcast studio at NRF Europe in Paris. In this fascinating conversation, Raphael shares insights from nine years of leading retail technology experimentation at Portugal’s leading retailer, revealing how they balance breakthrough technologies with incremental innovations and why sometimes “gut feeling” trumps complex matrices.
MC Sonae: Portugal’s Retail Innovation Leader
MC Sonae stands as Portugal’s leading retailer with a comprehensive ecosystem spanning food retail across multiple formats (hypermarkets, supermarkets, convenience stores), online commerce, health and wellness, beauty, cafeterias, and pet care. The company’s 40-year evolution reflects a strategic shift from large hypermarkets to formats emphasizing convenience and proximity as customer needs changed.
Rafael leads the IT Labs team, which has been driving technological experimentation across MC Sonae’s entire value chain for nine years—a remarkably long commitment to innovation in the retail technology space.
The Experimentation Framework: When Gut Feeling Beats Matrices
When asked about his framework for evaluating emerging technologies, Rafael’s honest response reveals the complexity of innovation decision-making: “In the end, to be honest, it’s been gut feeling.” However, this intuition doesn’t exist in a vacuum—it’s informed by market research, customer behavior analysis, and continuous interaction with business units.
MC Sonae has experimented with sophisticated evaluation matrices considering technology push versus business pull, potential impact, required effort and resources. They’ve tried simple effort-impact criteria. But ultimately, Rafael acknowledges that successful technology selection often comes down to informed instinct developed through years of market engagement.
This approach allows for calculated risks. When discussing the metaverse exploration, Rafael notes: “Even if we bet on a hype that’s fine because in the end we learn… It was a lesson for us and fortunately the company allows the culture where you can try, experiment, and in the end if it’s not worth it at least we know what it is, what it takes, and we move on.”
The Innovation Funnel: Scale and Pragmatism
MC Sonae’s experimentation operates at impressive scale with rigorous filtering. Their pipeline includes more than 100 initiatives annually, with over half pushed to deeper exploration and approximately one-third ultimately executed. This funnel approach ensures resources focus on the most promising opportunities while maintaining experimental breadth.
The company takes a pragmatic approach to technology validation, starting with technical perspective: “Does it work? Does the hypothesis that we are considering make sense?” Only after proving technical viability do they advance to business evaluation, preventing resource waste on fundamentally flawed technologies.
Balancing Breakthrough vs. Incremental Innovation
Rafael reveals MC Sonae’s multi-layered innovation structure that naturally balances breakthrough and incremental technologies. IT Labs explores both radical innovations (like metaverse applications) and incremental improvements to existing business operations. This dual approach is supported by:
- Delivery teams that regularly engage with business units on immediate solutions and improvements
- Dedicated innovation teams that pursue breakthrough projects through grants and additional financial investment
- Company-wide innovation responsibility rather than siloing innovation within a single department
This structure allows MC Sonae to pursue transformational technologies while continuously improving current operations.
ROI and Timing: The Art of Technology Adoption
The ROI discussion reveals MC Sonae’s sophisticated approach to technology investment. Rafael explains their two-stage process: first proving technology viability from a technical perspective, then evaluating business applications. This separation prevents premature business case development for unproven technologies.
Critical factors in their ROI evaluation include:
- Timing considerations: Technology may work but market timing might be wrong
- Business commitment: Without business unit buy-in, even successful pilots may pause
- Resource allocation: Current priorities may delay promising technologies
- Partner evaluation: Successful technology pilots may trigger procurement processes to find optimal implementation partners
Rafael emphasizes respect for startup partners’ time constraints: “If I know that it’s not going to be moving forward in the short term, I’m the first one telling them just go prioritize other retailers and then we speak afterwards.” This transparency builds stronger long-term partnerships.
Current Focus: In-Store Analytics Revolution
Beyond the expected AI implementations, Rafael highlights their current pilot of in-store analytics technology that brings e-commerce-style tracking to physical retail environments. This “really light approach” captures visitor numbers, journey mapping, and behavioral insights while securing customer data and privacy.
The technology tracks phone sensors even in flight mode, using in-store hardware to map customer movements and generate insights for layout optimization, marketing, and hyperpersonalization. When combined with opt-in loyalty program integration, the system enables real-time, location-based personalization and retail media targeting.
This represents MC Sonae’s pursuit of the long-hypothesized goal: “We’ve always hypothesized about the day when we can analyze a store like an e-commerce browser. We haven’t seen it yet done, but it’s getting closer and closer every year.”
The 10-Year Vision: AI-Powered Autonomous Retail
When asked about retail’s biggest technological transformation over the next decade, Raphael points beyond traditional AI to the convergence of artificial intelligence with autonomous robotics. While acknowledging AI’s obvious importance, he emphasizes that “retail is still a very physical business” requiring movement of products from warehouses to stores to customer homes.
His vision encompasses autonomous robots with human-level dexterity: “One thing is a robot that just pushes a box from point A to point B but a robot that can pick up a specific product and even a fragile product and place it on a shelf. It’s completely different thing and completely different potential.”
This automation potential spans warehousing, in-store replenishment, and customer delivery, addressing retail’s ongoing labor cost and availability challenges.
Key Strategic Insights
- Cultural Foundation: Nine years of experimentation requires organizational culture that tolerates failure and learns from unsuccessful initiatives
- Informed Intuition: Successful technology selection combines data analysis with experienced judgment
- Funnel Discipline: Managing 100+ annual initiatives requires systematic filtering while maintaining experimental breadth
- Multi-layer Innovation: Balance breakthrough exploration with incremental improvement through distributed innovation responsibility
- Timing Sensitivity: Even proven technologies may require patience for proper market timing and business readiness
- Physical-Digital Convergence: The future lies in bringing digital analytics precision to physical retail environments
Looking Forward
Rafael’s insights reveal a mature approach to retail innovation that balances ambitious experimentation with practical implementation. MC Sonae’s nine-year journey demonstrates that successful retail technology adoption requires not just identifying promising innovations, but building organizational capabilities to evaluate, pilot, and scale technologies effectively.
As the industry moves toward AI-powered autonomous systems and comprehensive in-store analytics, retailers like MC Sonae are positioning themselves at the forefront by combining experimental culture with pragmatic execution—proving that sometimes the best innovation framework starts with educated gut feeling backed by rigorous testing.
🔑 Topics covered:
- Nine-year evolution of retail technology experimentation at Portugal’s leading retailer
- Framework for evaluating emerging technologies: when gut feeling beats complex matrices
- Innovation funnel management: processing 100+ initiatives annually with systematic filtering
- Balancing breakthrough technologies with incremental improvements through multi-layer innovation
- In-store analytics pilot: bringing e-commerce tracking to physical retail environments
- Future vision: AI-powered autonomous robotics transforming retail operations
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Omni Talk® is the retail blog for retailers, written by retailers. Chris Walton and Anne Mezzenga founded Omni Talk® in 2017 and have quickly turned it into one of the fastest growing blogs in retail.