Ever since Apple launched the iBeacon in 2013, the market has become flooded with beacon technology providers who all claim to offer something unique to disrupt the sector for which the technology has the most obvious applications - retail.
Indeed, UK high street stalwart John Lewis declared its interest in the technology when it accepted Localz, a beacon tech startup founded in Melbourne, Australia, onto its JLAB incubator programme last year. The privately-backed startup was eventually crowned the ‘winner’ in the scheme’s inaugural year.
Swiftly after in September 2014, Localz won a place in the PayPal and Braintree-backed incubator Start Tank, with stints in both programmes giving the company a total of nearly 10 months (15 weeks in JLAB and six months in Start Tank) in UK offices in which to develop its technology and business model.
“We’ve only been around for 15 months. We originated in Australia, with a banking and retail background,” Martijn Verbree, Localz’ European director, who used to work as a KPMG consultant, tells Techworld.
“In the first six months, we spoke to retailers in Australia. We have moved away from having our own app, to enabling retailers to have their own.”
Localz uses beacons, geofencing and NFC technologies, and integrates them with retailers’ systems, including Point-of-Sale (PoS), CRM and inventory, usually via APIs.
While at JLAB, Localz worked on a specific use case for its beacon technology especially for John Lewis around the retailer’s click and collect service. John Lewis now has a small equity share in the business, which it gained in return for investment, mentoring and office space.
Using a combination of the beacon technology and John Lewis’ own mobile app, Localz has developed a system that enables the retailer to identify those customers entering its stores who have click and collect orders to pick up. Customers receive a notification on their phones through the John Lewis app, and if they say they want to pick up an item, Localz’ system notifies the staff in the basement to have the order ready so that the customer does not have to queue. The technology is currently being trialled at John Lewis’ Peter Jones store in London’s Sloane Square and in its Cambridge and Watford shops.
Meanwhile, half a year at Start Tank has helped the startup to refine its business model further, as well as given it ideas for how to improve its technology offering.
Verbree explains: “Start Tank allowed us to define the customer lifecycle around the use cases. We had these fantastic platforms and built all this stuff on top of it, but we couldn’t articulate [their business case].”
New features it developed while at Start Tank include what Verbree calls an “endless aisle”.
“We have an experience where you want to know more about a product or service, so you put your phone next to the beacon, and we can show you the video [which provides more information] that goes with it.
“PayPal suggested adding a ‘buy now’ button to go with the experience. So rather than you being pushed messages, you can use your own device to pull the information. Everything is streamed to your device, and you can buy it [directly]. You can click and collect or choose home delivery,” says Verbree.
This allows retailers to have fewer versions of products in their stores, as customers can browse different options of a single product on their phone, which also frees up space for a greater variety of products to be stocked on shelves. In addition to checking out on their phone, Localz can also link its system to a retailer’s PoS system, so that customers also have the choice of paying in-store.
Not just for retail
Although the retail applications for beacon technology are the most obvious, Verbree says that Localz doesn’t want to be limited to just that sector.
“I don’t want us to be locked in retail, but retail is leading the pack, ahead of hospitality and banks,” he admits.
Localz is therefore working with companies in other sectors, like logistics firm DPD, helping it with the development of a delivery manager app. It has also helped develop a technology with the property sector in Australia, called Homepass, which puts beacons on a ‘for sale’ board. Interested passers-by can pull information about a house onto their phone, look at pictures of the interior and apply to view the property.
Enabling consumers to choose if and when they want to pull information using beacons is something Localz feels quite strongly about. The firm prefers it to pushing out notifications and offers to consumers, which is what many of Localz’ competitors are doing.
“We’ve been trialling a little in supermarket chains, where you send customised offers to people based on where they are in the store. But we’re not a huge fan [of that] because it’s very hard to make that relevant to people,” says Verbree.
“It can be seen as spam. You want the customer to initiate. If people turn it off [because they see it as spam], it’s not going to do anything for us.”
Faster expansion is now on the cards for Localz, which currently has around 15 members of staff, mainly based in Melbourne. It has reapplied for Start Tank, and hopes to stay for another six months, but if that does not work out, it plans to find another office space in the UK.
In addition to this, the startup wants to open another office in another country, adding more sales staff.
“We’ve got seed funding to take us to the end of the year. We will be preparing for series A funding by the the end of the summer,” says Verbree.
“We want to expand a lot quicker in the European markets and in other markets in the world. It’s still to be determined whether it’s Asia or North America.”