Retailers would like to know you better, and plenty of them have loyalty programmes that target their customers' habits in exchange for rewards. All of that loyalty data and customer behaviour can then be mined for gold. But Jesse Green, a Cape-based entrepreneur, is unimpressed with how much waste there is in loyalty programmes.
"It's strange how few retailers really use the loyalty data they have. I'm working with a top-notch statistician to analyse data and he can come up with nuggets such as, 'This product only sells in Sandton'. Another example: if a man buys Pampers, there's an 85% chance he either has a baby at home or he's buying for someone else. If he buys it twice, then there's a 99.9% chance he has a baby at home. That's just statistics."
Green's answer to the loyalty problem is Perk, a technology solution for retailers that uses accurate in-store positioning of customers.
"Perk is a mobile loyalty programme. As a customer, you will have an app on your phone and it will immediately recognise that you're really there: not FourSquare or 'coffee shop next door'-type accuracy, but real accuracy.
"I don't like buzzwords, but the buzzword in this case is nanopositioning. There's a piece of hardware installed that recognises you're there. There are no privacy issues. You need to sign up and decide you want the app. You will get points for scanning bar codes and making purchases.
"The tough part of the idea is that retailers don't just plonk down pieces of hardware in their stores."
But Green is no stranger to tough sells. A former recruitment specialist, he founded and sold UbuntuDeal to BidOrBuy last year and, in his own words, he has always preferred founding and running his own businesses. He's realistic about Perk's chances.
Funding fun
"With UbuntuDeal, success was quick. I see Perk taking two years, although, obviously, if it takes off immediately, I certainly won't complain! We've talked to Spar and it has owner-managed stores, and a lot of them have wanted to test it. There's still a bit of development to be done but I think it will launch in test stores in December. There's also the issue of putting in new systems right before the Christmas rush. But the idea is a way to enjoy shopping, whether you love or hate doing it. Whether you need something specific or just want to browse or window-shop, you can download the Perk app to your cellphone and you'll earn points - called perks - simply for walking into a shop. When retailers know you're really there, they're much more likely to give you loyalty points and reward you."
He also sees wider applications than just retailers.
"When you know someone is in an enclosed space, like in an aircraft or cinema, then it has applications as well. I'm not thinking too much about competitors at the moment. It's a difficult system to sell because it's difficult to set up, big companies are involved, and the decisions can drag on because of that. The board has to approve it and they often have other priorities, so your proposal gets bumped down the To Do list. Then they talk about it three months later. The other problem is that mobile app developers are like hen's teeth, and ones who want to work for equity are even rarer."
Another obstacle is that there isn't a viable mobile payment solution in SA.
"It has to work with your mobile phone. Carrying around another piece of technology just won't work," he notes.
Jesse Green, Perk, says it's vital to have money in your bank account if you want angel investors or seed funders to take you seriously.
And then there's funding. Green has struggled with getting funding for his ideas before: UbuntuDeal was funded by a loan from an investor in Kazakhstan after he came up empty locally. Green, who speaks Russian as well as German and Afrikaans to go with his English, says he wasn't quite at the stage of wondering whether his kneecaps were going to be broken but did come close several times.
"One of my Russian contacts had a rich Kazakh friend in Cape Town, and he lent me a sizable sum of cash. But this was a loan, and after a lot of hard work, and a lot of luck, and a hell of a lot of wondering what would happen to my kneecaps if I couldn't pay it back, I managed to sell UbuntuDeal.co.za to bidorbuy.co.za."
His advice for local entrepreneurs? Have revenue.
"Seriously, you need paying customers if you're going to get funding in this country. Get money into your bank account if you want angel investors or seed funders to take you seriously."
First published in the November 2012 issue of ITWeb Brainstorm magazine.
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