Allowing retailers to engage customers with data driven offers while in store
Estimote turns smartphones into a vehicle for brick and mortar retailers to message customers at key moments in the purchase process, and track their behavior over time. Soon customers will be able to purchase items in store on their phones and have items shipped directly to their homes. Retailers will no longer need to worry about managing inventory, just providing a great customer experience.
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."
Why did you pick this idea to work on?
95% of all transactions in US still happen in brick-and-mortar retail stores. Almost 70% of US citizens have smartphones and it is the right moment to transfer all we have learned about online analytics, advertising, targeting to the physical world.
Who are your competitors? How are you different?
There are plenty of retail analytics companies, but our technology is truly unique. We don't use wifi scanners and don't track people without their permission. We offer consumers a better in-store experience by providing contextual messages, actions and navigation. Data is just the by-product of it.
How will you make money?
We are building a digital platform that delivers context and micro-location to consumers' phones in the real-world.
There are plenty of ways to monetize it.
Estimote, Inc. is conducting a Regulation D offering via Wefunder Advisors LLC. CRD Number: #167803.
Estimote, whose Bluetooth Smart Beacons can broadcast context and micro-location data to any devices in range that support BLE. Applications aren’t limited to shopping — the Beacons could be used to provide indoor mapping data, for instance — but being able to beam discounts to customers while they’re eyeing your merchandise would be an immediate draw for retailers. In terms of maintenance, Estimote says one of its Beacons will last for two years on one watch battery, putting the devices in smoke detector territory.
Estimote, a Polish company with an outpost in Mountain View, California, that just graduated from Y Combinator is about to ship it’s first beacons (3 for $99). It’s co-founder, Jakub Krzych, talks about creating “an OS for the physical world.”
Estimote was one of the hot new companies to come out of the latest batch of Y Combinator, the famous Silicon Valley incubator.
Here you see its new product, Estimote Beacons, which is a small, wireless device, sometimes also called a 'mote.' When placed in a physical space, it broadcasts tiny radio signals around itself.
Estimote is an attempt to build an operating system for the physical world. Instead of continuing to focus on the nebulous, everywhere-and-nowhere concept of the cloud, Krzych and Kostka envision a new class of interactions and experiences that are tightly integrated with real places, from parks to parking lots.
"We developed what we like to call an operating system for physical locations—one that will change how people run businesses in the physical world and how consumers interact with real-world products and venues."
July 16, 2013
Jakub applied to
Thanks for vouching for Jakub!
If you'd like to invest in Jakub, please open an account. We'll waive your fees if you do it now.
We help promising founders get off the ground with $20,000 and world-class mentors.
Wefunder supports three different federal laws that allow startups to raise money legally. To comply with the law, Wefunder Advisors LLC and Wefunder Portal LLC (both owned by Wefunder Inc) also list startups depending on the regulation used.
Legal May 16th 2016
Wefunder Portal LLC
for 223 startups
Wefunder Advisors LLC
for 98 startups
for 1 startup
Curious how well the companies have done? Or how many raised follow-on financing?
Some fine print: 1) These numbers include startups currently live on Wefunder if they pass their minimum target. 2) Some startups use two different laws at the same time (i.e., Regulation D and Regulation Crowdfunding).
Join 298,524 investors who funded 309 startups with over $110.5 million1
Wefunder Inc. runs wefunder.com and is the parent company of Wefunder Advisors LLC and Wefunder Portal LLC. Wefunder Advisors is an exempt reporting adviser that advises SPVs used in Reg D offerings. Wefunder Portal is a funding portal (CRD #283503) that operates sections of wefunder.com where some Reg Crowdfunding offerings are made.
Wefunder, Inc. operates sections of wefunder.com where some Reg A offerings are made. Wefunder, Inc. is not regulated as either a broker-dealer or funding portal and is not a member of FINRA.
You may also view our Privacy Notice.
Wefunder, Inc., Wefunder Advisors LLC, and Wefunder Portal
LLC do not review user-generated content beyond what's
required by US law. Some user-generated content, including investor
biographical information, may not be accurate.