|1||Pilots with the largest retailers in Europe, US & Canada|
|2||Best Hardware Startup At TechCrunch Disrupt|
As online shopping becomes more ubiquitous, consumers know that loading up your “cart” no longer has to be a backbreaking task, and checking out doesn't have to involve tapping your foot impatiently standing in line. But with the deals found online, how can brick-and-mortar stores compete?
The answer is "bricks-and-clicks." Jakub Krzych and Lukasz Kostka, co-founders of Estimote based in Poland are offering this very solution with their Bluetooth-powered retail system that reports store traffic and habits to companies, lets users pay with a tap on their screen, and sends shoppers location-specific notifications on their phone about deals based on nuances as specific as which aisle they are in.
For many of these shoppers, their modus operandi is and will continue to be showrooming – seeking the tactile experience of going to the store to feel the leather of a pair of shoes or handle electronics to test its durability.
“This is where we are heading,” Krzych said. “Shoppers don't want to go through this showrooming process because they like it. They just want to touch or feel it. So we offer them and retailers a solution.”
Estimote is launching with the largest retailers in Europe, US an Canada. The startup has documented 40 million interactions during pilot deployments with top international brands.
How It Works:
The system replicates exactly what people are already doing online and saves stores money by taking all of the administrative work out of sales, allowing retailers to focus on their products.
Originally launched in Krakow, Poland in 2012, the Estimote system’s hub is a gem-shaped beacon that's attached to store walls and connects to users' iPhones. It offers handheld proximity marketing by pointing out specific products and offering retailers in-store analytics. Data is available from smartphones as far away as 160 feet and as close as two inches.
Krzych used Google Analytics as a baseline comparison for what Estimote offers. His system provides not just analytics but also compelling data and the necessary tech vehicle.
“Theres no reason to build Google Analytics without the tech to deliver the content,” he said.
Ahead Of The Curve
More than 94 percent of transactions worldwide still happen in physical stores today, Krzych points out. And now with Estimote, a store owner can focus on the product and consumer experience and skip the logistics, invoicing, payments and shipping -- basically anything extraneous that detracts from focusing on his or her passion: the product.
"This is where we are heading," Krzych said. "We see the transition with small stores being able to compete with large chains on passion, but don't have to compete on cost because of Amazon or eBay.”
Online technology knows exactly how many people visited, how they behave, what they put in their cart and why they decided to leave. It's time for physical stores to compete, he said.
“It could be renaissance for mom-and-pop shops. All the inventory is handled by someone else and you get to focus on the product.”
Krzych said a moment of clarity for him occurred when was meeting with the biggest retailer in Europe and asked if they knew how many people came into the store. "’We can count the number of receipts, and that's how we estimate,’ they said. Well that is lacking this fundamental data to run a business.”
Moving Online To Real Life
Krzych worked backwards to arrive where he is. Previously, he had founded AdTaily, a self-service advertising network. He soon realized that everything he had learned about e-commerce, advertising, geo-tagging and analytics could be applied to the physical world, and there was a much bigger opportunity.
"I'm a huge believer in the idea that nothing interesting happens in the office,” he said.
Krzych told the story of being in the park with his kids and realizing all these parents were gathered in the same place every day on their smart phones, and he wondered how he could measure analytics on this very targeted group of people.
A master of markets and audiences, he knew he was on the cusp of a solution.
“As a person coming from the advertising industry, I knew these parents were a super targeted audience. And that is incredibly valuable in the ad industry. So I thought, ‘How could I could measure the potential; how could I count how many people came to the park, how often they arrived and left. How could I engage?’’”
Once his idea became a reality and he proved it could work, he hired an industrial designer who made sketches of the design, built a prototype and then presented to investors who saw potential. Once the team secured money, they started hiring people and joined Y Combinator.
In early 2013, the Estimote team took off, running into both successes and setbacks.They worked quickly to solve their tech problems, encountering issues with their attempt to use WiFi initially.
One of the greatest lessons Kryzch said they learned was understanding that analytics can be just a byproduct of engagement.
"It's much more important to engage with customers, and the analytics is just the kind of data generated from that."
Estimote, Inc. is conducting a Regulation D offering via Wefunder Advisors LLC. CRD Number: #167803.
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