The Future of Retail Marketing is Digital

Key Takeaways from CA Retail Startup Pitch Event

A Retail Startup Pitch Event was recently held at Plug and Play Tech Center in Sunnyvale, California. In attendance were digital retail marketing experts from Target, AT&T, Unilever, Panasonic, Coca-Cola and Anheuser-Busch.

The moderator of the event was Steve Katz – creator of ShopTouch – who said the roadmap to success for startups pitching would be to partner with one of these big retail companies or to be acquired by them. That is by and large the exit strategy for any startup.

It was noted at the introduction of the event that there is expected to be an enormous amount of disruption coming in the retail sector due to the changing spending habits of consumers and the amount of digital innovation circled around retail sales.

Guiding Consumers to New Behavior

The first startup company to pitch was Envizio, which provides a digital marketing solution for mobile offers at the point-of-sale (POS). Prasad K.R., the CEO of Envizio, pitched a QR Code driver-based technology with custom coupons, micro-offers, punch cards, rebates, sweepstakes offers, etcetera… all in real-time transaction exchange with minimal driver installation. Their pilot was at BevMo California, focusing on the wine industry and working with key wineries in the area to offer targeted offers to BevMo customers. Envizio is also developing an ecosystem with PayPal, NCR, and Yowza. They hold several patents on their fraud detection and driver-based code reader which is more stable than the current QR code readers on the market. The app itself is backend/white label and can be branded for each retailer making it an extension of existing marketing and web portals.

The biggest concern from the panel around what Envizio had to offer is this: how do you transition consumer behavior? A jump from coupon clipping to digital scanning offers significant barriers. Consumers will need to have a smart phone, excellent data service, and recognize the value in spending a few minutes setting up an account for each retailer plus remembering to actually scan the QR Code at the retail location and at check out. This was an interesting point, as within the test area for Envizio’s app the adoption rate for digital marketing is significantly higher than it is in the rest of the world, or indeed even the rest of the state of California.

Offering Consumers Customization Options

Another interesting concern is whether the apps could be customized to proactively offer consumers choices when they were geographically near the retailer. Since the app clearly demonstrates its usefulness at time of purchase, could features be added to enhance before, arrival, browsing and after they leave? The sales cycle for a retailer never ends. A clever offer after a purchase is an excellent reminder to return again someday soon, and the purchase cycle itself is of much higher value than a single transaction.

More Responsive and Personal Customer Service

The second startup to pitch was Dropifi, which is ‘putting intelligent human touch back into online customer service’. Dropifi is a 500 startups Plug and Play portfolio company, which is a significant honor and vote of confidence from this startup accelerator giant who has launched or helped launch companies such as Skype, Evernote, PayPal, and Facebook. Dropifi is the number one app/plug-in on Shopify and creates saved keyword searches that tag the emotion or tone of a customer message and assigns the case and automatically escalates the case according to the length, time, keyword tone, and background information associated with the customer profile. This smart inbox method allows for agile response without canned messaging.

The main questions from the panel included:

How much money are you trying to raise? and What kind of partnerships are you looking for?

CNN called Dropifi one of the ten most promising startups of 2012. The panel thought so, too, and didn’t have much to say during the pitch which is a signal for “let the feeding frenzy begin!” with probably Coca-Cola and Unilever at the lead.

Every startup can only hope to be so lucky! Go Dropifi!

Marketing Opportunities with Indoor Mapping

The third and final company to pitch was Micello, who is ‘Mapping the Great Indoors’. Their goal is to detailedly map every interesting building on the planet, i.e. airports, shopping malls. Their products are really a platform API plus a maps and data package. Their best use case:  Wal-Mart on Black Friday last year. Their custom Wal-Mart application showed shoppers where to find their favorite sale bargains throughout the store. Micello beat out Google for this honor!

New indoor marketing with Micello can be customized per client to target special offers/promotions through Bluetooth proximity and GPS-locator technology. The barrier to entry here is not as high as with Envizio, but still requires customers to have some cellular technology with smart phone capability and good data connection. So, it’s perfect for developed urban areas with metropolitan hubs and as smartphone technology becomes more ubiquitous, both Micello and Envizio will have a much broader market at their fingertips. Until then, Micello is solving some of this problem by digitizing indoor environments and building custom printout kiosks for customers in low-technology areas to help them target store offerings and exclusive deals or coupons.

All three startups were showcased to launch the new retail startup partnership required to make Plug and Play Tech Center’s Retail Initiative successful. Within the next year, Plug and Play plans to identify 100 startups in the retail sector and 100 retail companies looking for the next big thing and bring them together in successful partnerships. Three down! Ninety-seven to go! The numbers from the first quarter should be very inspiring, as the conversations are non-stop both in the Plug and Play Tech Center and all across the internet.

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Interested in learning more about the world of digital marketing and how your business can benefit? Contact Dream Local Digital today. 

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