EP #509: How mobile will help retailers combat showrooming – with Yan Simard of ZapTap

We are turning a corner in the rocky relationship between retail and mobile.

At first there was disdain as retailers looked at mobile as the web’s ugly little child. Not worth the effort to invest in, not worthy of the brand stamp, not a threat. Just. Simply. Not.

Then the fear and confusion arose as upstarts and digital-only retailers promptly handed traditional retail a world of pain and discomfort. Showrooming emerged as a term at the expense of those that ignored the threat so prominently displayed by early mobile adopters.

Now, a somewhat calmer world where retailers, scared, scarred and clinging to life from the first three rounds of this fight, are slowly understanding what the mobile world means to their business (incidentally, for those that don’t know, it means pretty much everything).

A large part of this transformation is as a result of the emergence of real-life-to-digital connectors with the mobile phone being (for now) the center. One such company is Canadian-based ZapTap who are focused on deepening the relationship with customers and driving more sales while they are in the store.

Founder Yan Simard has been waiting for almost a decade for the technology to emerge to allow him to build ZapTap. In this episode you will see the depth of knowledge he has as his company helps the struggling retailer to make the right mobile decisions. You will also get a glimpse into the complexity mobile has brought to retail but with that complexity comes incredible (and I mean INCREDIBLE) opportunity.

Enjoy!



Key takeaways from this episode. Click on the link and the video will take you to that clip

1. What is the problem that ZapTap solves 3:55
2. What does ZapTap do? 5:45
3. Why get into this area of business? 7:00
4. Does being in Canada make it challenging when it comes to competing with other countries? 8:40
5. What countries does ZapTap sell into? 10:40
6. Who do you sell to? 11:15
7. How do you sell to the manufacturers? 12:10
8. How does the ZapTap platform work? 15:20
9. What is the typical ZapTap experience? 17:20
10. How to use this technology to differentiate between casual and loyal customers 19:50
11. How do you create customer loyalty? 21:30
12. The Shazam/Toyota/SuperBowl disaster example 23:15
13. The misunderstood nature of the QR code 25:00
14. The WORST QR code example…ever 28:45
15. What has worked in-store with big brands? 30:00
16. Does this combat showrooming? 32:35
17. Is there a sequence to connecting with customers in-store? 34:35
18. What does the future hold for in-store experience? 37:45
19. What happens when customers go direct to manufacturers/brands? 40:25
20. Why aren’t companies doing this? 44:45

Raw Transcript

Rob: Hello everybody, and welcome to untether.tv, I’m your host and founder, Rob Woodbridge. I get the great opportunity to bring to you another amazing another Canadian company, doing some amazing things. Aside from crappy winters, we do have some great talent up here in this country and I’m going to showcase one in one moment. But before I do that, hey listen, if you’ve ever thought about how you can support this site, this service, these videos; I would appreciate if you went to patreon.com/untether, you can contribute. All I’m asking for is a dollar a month, at a minimum and you can actually make sure that what I’m doing here continues on. Patreon is an amazing service. It’s kind of like a kick-starter for independent content creators. And what that allows you to do is; basically it allows guys like me to do this and do it full time. So I’m asking for you guys to go up there to patreon.com and throw a buck my way. I do four of these episodes a week, or a month. I do five mobile minutes a week and a podcast called, This Week in Location Based Marketing.
So I push out seven pieces of content a week and all I’m asking for is quarter; 25 cents a week gives you a buck a month. If you sponsor us for $25 a month, you get one of these beautiful mugs, untether.tv mug. So go to patreon.com/untether. I’m not the only one up there. Go and take a look at some of the independent content producers and support them because we’ll be bringing this kind of content to you all the time. I appreciate those who have done it. And I’d appreciate it if you could do it as well. patrion.com/untether. All right enough, enough of the begging. I’m going to bring in my guest. I have Yan Simard who is from Fredericton, New Brunswick. He is the founder of a company called Zap Tap. And we are going to be talking about today, the in store. We’ve talked about this on many episodes of all of these shows, is that how important to the in-store activity is. We’re talking about leveraging people’s proximity to product, using some of the latest technologies like Beacon, and iBeacon, low-energy Bluetooth, NFC, QR Codes. Whatever it might be, we’ve got to figure out a way to trigger an action, trigger a buy. And Yan is one of those guys that can actually walk us through this. So Yan, thank you so much for coming on and sharing your story on untether.tv.

Yan: Thank you Rob, for the invite. I look forward to it.

Rob: Wow, yeah, Canadian company Fredericton in New Brunswick! I think you were the first person from Fredericton that I’ve had on the show so, I got to send you something like a badge or something like that.

Yan: Yeah, I’d appreciate that. We actually have a pretty healthy start-up community here, so I’d be the first one to have such badge; so that would be a great badge of honor.

Rob: It would be. I don’t know, I don’t know, it’s only untether.tv, a small little, little web channel. Fredericton, for those of you that don’t know the landscape, the geography of Canada, if you’re looking at the map, it is towards the east. It is one province shy of the Atlantic Ocean. But I got to tell you, it is also one of the most connected provinces in Canada, right. I mean, you guys are built basically under [lick] fiber. Because the government built that up a number of years ago and it started to build up this healthy ecosystem. Am I wrong on any of that?

Yan: No, that’s true. We even have the National Research Council, the Institute for Information Technologies here. Fredericton is also home to two major IT companies. Beacon acquired one, it’s called Union Six; and the other one is Q-1 Labs, so Radiant Six was bought by Sales Force a few years back and Q-1 Labs was acquired by IBM. So we do have some nice jobs here.

Rob: Yes, absolutely. And we’re going to talk a little bit about what Zap Tap is doing in a minute or two. But I got to ask this kind of an important question. For the company, what problem are you trying to solve? A lot of people that I talk to, don’t really understand the problem; or don’t understand the opportunity that In Store brings. But, it’s emerging, obviously. What is the problem you’re actually trying to solve?

Yan: Well, the original intent, or the original problem we were trying to solve was the fact that consumers when they go and shop in retail stores, they usually don’t have easy access to quality product information. If you think about where the information or product is located, it’s either on web; it can be Instruction Manuals, it can be marketing brochures or what have you. It’s a bunch of things that are not necessarily in the format or hasn’t necessarily been put together for an in-store experience. So people show up in the store, they see a product that they hadn’t thought about when they were home googling about given options. And then they realize, oh I would like to learn more. What they end up doing is that they end up on the phone googling for information. So that is a problem for consumers. It’s also a problem for brands. So if you happen to be a brand that has a great product that is in front of a consumer and the consumer looks at the product, the information that they would typically have. Let’s say you go to a future shop and it’s a consumer electronics product, it’s going to be a price card and the two or three lines that are on the price card and that’s typically it; and sometimes some information on the packaging itself. So for brands, it’s a major problem. You want to make sure that people who are in that point of decision which is when they’re inside the store in front of a product, you want to have a chance to give your best shot at convincing a person that this is the right product.

Rob: So what do you guys do to help that?

Yan: So the Zaptap platform essentially creates a bridge between consumers and brands at the point of decision which is, as I said when people are inside the store. So if I look from a more practical perspective, if I’m a consumer and I show up at the store and I see a product that is supported by Zaptap, I scan that product and then I get access to a phone based product experience. So when I say scan, at Zaptap, we use three types of triggers. We use a ?? Bluetooth or what people refer to as beacons. We use NFC tags and we use QR codes as well. But that’s only the entry point so the focus is not there, the focus is on what happens after people have scanned using one of these three technologies.

Rob: All right and we’re going to dive into that. I’m just going to make a note that we’re going to talk about after the scan because I agree. We’ve all had some terrible experiences and I’ll lace them on you in a few minutes about some of the experiences that I’ve had when I’ve gone through the effort of scanning something and been totally, utterly disappointed in the results because people are lazy. They don’t understand that’s just, as you said, the opening not the end. Your end game is not to get them to scan it, it’s the following. You think about what you guys are doing. How’d you get into this business? How old is Zaptap and what was the reasoning behind opening the company?

Yan: Well the original spark I guess, is an idea that I got probably eight or nine years ago. I was a researcher in the eLearning field back then and I was trying to figure out how to link the knowledge related to product to the product itself and that’s when I realized that there was a big gap in market. You have to remember though, at the time, the best phone on the market was probably the black and white Blackberry and there just was no device on the market to provide a good experience so I kind of forgot about the idea. And then I just woke up one day with the idea again in my head and that was in January of 2010 so what I did back then, I build some proof of concepts, build a business case and I got some investment money. So we started for real in 2011.

Rob: And so did you raise money? Like angel money, VC, government?

Yan: Yeah, well, all of the above I guess

Rob: You’re Canadian. You go everywhere, right?

Yan: Yes, that’s right. So we started with the Angel investors community in New Brunswick. We got some institutional VCs as well and of course, we leveraged programs like the NRC rap program for R and D support and so on.

Rob: I mean, it’s a typical story for the Canadians. Unfortunately, most Canadian company startups are underfunded. There’s a lack of that real series A and then lack of series B even more when it comes to Canadian companies so we’re a little bit more resourceful.

Yan: And it’s not necessarily a bad thing. Having a tougher time to get the money sometimes forces you to be better.

Rob: You think that? There’s got to be competition that you’re looking at in the states and elsewhere because you might not be the first guy to come up with this idea and I think that that’s the thing. And I think often times with this, it’s about getting to market as quickly as you possibly can. And sometimes I look around and I think ‘we’re starving the companies. We’re making it so hard for great technology to get to market.’ Or to fail quickly and with great teams and kind of pivot and change direction and we see this a lot in Silicon Valley and other major tech sectors in the States, but do you think that this is a good thing that it’s so hard? Or, like once in a while, it’d be great just to be able to get good money into good companies so that Canadian companies can dominate for once?

Yan: Well, unfortunately some good companies die and they shouldn’t. The other side of the metal is that those who survive tend to be stronger I think and in some other places.

Rob: Do you think that it, I mean, this was totally not on the agenda and I’m high-jacking this and I’m so sorry. But I’m interested in this as well. Do you think that those companies that emerge have a different mindset? That maybe their growth, or their growth plans, are more conservative than say an American company with a little bit more money, and an aggressive nature?

Yan: Well, I think, in general, people have the habit of trying to start and sell in their own backyard.

Rob: Right.

Yan: And the backyard, in Chatham, in terms of market size, is smaller.

Rob: Yes.

Yan: So in that sense, that’s probably true. I think one common mistake that we see, is that Canadian based companies don’t see that sort of big market opportunities right away. They try and validate, internally, and sometimes, the internal market is just not big enough to fuel a group.

Rob: Yeah, and I think that’s the big thing, is that we rely, obviously, on our export markets. United States is our best, and most amazing trade partner. And of course, as we’ve emerged, we see China, we see India as opportunities. But where are you guys selling to, everywhere?

Yan: Well, we were open for business everywhere, I think. But we focus our efforts on the US market, also Canada, of course. We realize that there’s a strong pull for our services from Europe. And eventually, we hope to go there, in a more structured way. [inaudible 00:015:09] the same, but I’d say that the UK market, and [inaudible 00:015:11] is falling very slowly.

Rob: Yeah. You’re looking for structured commerce entities. That’s a terrible way to describe it, but four walls, product on the shelves. You’re looking for that kind of . . . is that your ideal customer? The guys who are actually in, like, the Best Buys who are hemorrhaging or trying to learn how to leverage this technology?

Yan: Yeah, there’s no clear rule. But we tend to sell more to the manufacturer. So the brand itself . . .

Rob: Oh, okay.

Yan: There’s a stronger incentive for them to differentiate their product versus the other options inside the store. So develop proposition is stronger there, but increasingly, distributors and retailers, also want to provide a better experience. But because, guess what? People have a bunch of options nowadays. I know I’ve done your show, Rob, we talk quite often about show rooming, and so on. So there’s a transit, are not there to disappear. Retailers just need to adapt to it.

Rob: Right. So tell me, how do you sell to the manufacturers? They’re your target customer. What’s a typical sales process for you?

Yan: Well, we usually connect to them directly. So we talk to them by e- mail, and phone, and web, and so on. We talk often to the marketing brands that they work with, as well.

Rob: Okay.

Yan: And I guess that our sweet spot is probably brands that have, what is called, “mid-luxury products.” So products, where they’re trying to differentiate, not based on pricing, but based on quality. So our service is a very trusting one, when it comes to communicating the quality value of their product, the brand name value, and so on. Instead of just couponing and the scanning options, that are play in the market.

Rob: And will bankrupt companies, if that’s what they’re relying on, for word of mouth and marketing, and awareness making, right?

Yan: Well, yeah. Those brands, you often want to tell people why sometimes it’s worth paying a bit more, than just looking for the price.

Rob: Yeah.

Yan: And we live a little bit in a culture of discounts. So I’ve seen mobile apps in the retail sector are, essentially, all focused on pricing and discounts, and so on. And brands, especially in the mid-luxury segment, are just tired of it.

Rob: Yeah.

Yan: They want to explain why are they good. Why they are investing that kind of money, and developing good quality products.

Rob: And this leads into our big discussion, here, which is, there’s got to be practices, that you’ve seen, working with some of these big brands, that you’ve learned all of these lessons from. So that we can impart a little bit of this, on folks that are listening to this, trying to figure out how they can leverage this kind of technology. We’ve heard a lot about Beacons, and low-energy Bluetooth. And we’ve heard about iBeacon, which is Apple’s implementation. And there’s Beacon, which is PayPal’s implementation, in a retail landscape. One is in your phone. The other one is, obviously, a plug-in device. So there’s a lot of confusion around this industry that is out there. So there’s that.
And then there’s also that, “Okay. Now, you’ve got me to do something. Now, what is the thing that I should be doing? What is the next step that we should be taking here?” So why don’t we de-mystify the technology that’s out there? And you guys handle Beacon, which is low-energy Bluetooth. As you said, NFC and QR codes. Where are we? What’s the state of these things, at this moment in time? Which, we’re doing this early 2014.

Yan: Yeah, the market, in general, is still early. And you were mentioning, a bit earlier, about competitors.

Rob: Yeah.

Yan: So if we look at our typical competitors, it’s guys that will sell NFC tags or iBeacons or BLE Beacons, in general or even QR. Then what happens, is that the brands or stores, will build a microsite that goes with it. So there’s a very static kind of experience. Where I think we really hit the mark with our approach is that we always thought that the in-store trigger was the beginning of the journey. What happens after that, it’s all about building a relationship and trying to learn about each other a bit more. If I go very quickly over what our platform does. One thing we do really well is content management, of course, but I would say some competitors do some of that as well. We’re very good at allowing brands to create content on the fly, updating the content any time you want, and so on. Where we really put ourselves apart is when it comes to metrics and what we do with the metrics. We focus a lot on measuring what’s going on inside the store, which products are popular, which store locations. We can even track in a very privacy respectful way where people are and so on, and based on the other brands, can customize the experience.
As an example, if a brand wants to provide a different experience for a guy who regularly scans consumer electronics and then scans a T.V. set in a given store, we could use our system to pre-cater to that person with content that another person would not [inaudible 00:01:24] get. It’s all about measuring, understanding the other part of the equation, and trying to adapt the content so that it builds value on both sides. That is where our platform is different. It’s about managing and monitoring that in-store experience, as opposed to just providing one-time type of content.

Rob: I think that’s a huge difference. So it’s a learning system ultimately? This is not static information.

Yan: Yeah, it’s a learning system. It’s learning in some automated way, but also we sell the fact that people at brands or marketing agencies will use the system, will try and test different approaches, will be able to measure what works better or what doesn’t work so well, and then keep improving. It’s really about learning how to conduct business inside a store and creating a product experience.

Rob: Walk through a customer’s experience using your product from the customer’s side. What happens? How do they interact, what do they do?

Yan: Let’s take the example where someone uses an NFC tag. That person would show up in the store, see a product that they like. They will see some special physical [signage] in front of that product, and if they go and tap the NFC tag, that triggers the experience, and that brings the Zaptap platform, if you will, so that person, depending on the product, may get access to technical specs. It could be videos showing how to use a product at home, it could be checking out on social media what people are saying about this product. It might be as well promos and special offers, if that’s what the brand wants to do. It can be a bunch of things, and I would say the sky is the limit. Our platform has been built to be as flexible as possible in that sense. I think the most important part is that we can recognize and cater to that person. We’re trying to make sure our brands navigate towards building customized experiences that are highly relevant and are going to provide value to the consumer.

Rob: Do they need an application when they’re using this, or do they need the store’s app in order to be able to enable it?

Yan: It depends on the trigger that we’re using. If it’s Q1 or NFC, we don’t need an app. It bings our platform, and it’s a web app in that case. When it comes to low-energy Bluetooth, because of the way the technology’s built, we need an app on the phone. With some clients, we are going to work with the ZapTap app, which simply offers people to download the app there. Someone could also access the contents via NFC, and then be offered to download the apps so that they have the low-energy Bluetooth experience. We do all that. The app of course has its advantages and disadvantages. The disadvantage is that you need to download it. Sometimes you lose some people there, so we try to be as flexible as possible. We typically don’t go with one type of trigger, we go with two or three inside a store, so that if you’re a one-time user, you [inaudible 00:01:25] our code and be fine with it. If you’re a heavy user, you may want to go with a low-energy Bluetooth and have the app installed on your phone. So we can use the ZapTap app in some cases. We can also integrate our A.P.I. with a third-party app. It could be a retailer’s app, it could be a brand’s app. If they already have that and they want to integrate with our systems for low-energy Bluetooth, we can do that as well.

Rob: It’s fascinating. You do two or three of these things, QR codes, NFC and a Beacon for low-energy Bluetooth. It also mirrors the customer loyalty chain. A QR code and maybe an NFC tag to me don’t really mean loyal customer. But if I’m using a brands app, say if we’ve gone through that effort in order to integrate, then all of a sudden you know that I’m a loyal customer, because I downloaded your app, and you want to treat me a little differently than somebody who might be casually scanning it through our code. Do you think about that kind of stuff where- listen if we’re doing a Beacon play and it’s in the store’s app the offers could be different than what would be on a QR code or an NFC tag?

Yan: Well, obviously if a brand wants you to provide special offers and content to people who have the app, the platform is built for that. You can even say a promo is going to be available only to enjoyed users, but it will not be available for less.

Rob: I love it. I love it. I just had this massive brain [fart]. Wow. This is awesome. Obviously. Obviously that’s what they’re going to do.

Yan: I’ve been at it for awhile so-

Rob: It’s like a revelation. You can do this. Obviously. Obviously you can do that Rob. Oh God. OK. It’s OK. Oh, it’s all right. You brought up the- we’re talking about loyalty, I’m actually blushing. We’re talking about loyalty here for a second. How does this create loyalty? How do you generate loyalty within a customer who’s going through this process of either tapping, scanning or being in proximity to a product? I mean, are there any keys that you guys have learned about creating loyalty with a customer base?

Yan: Well, I think there’s a golden rule; if someone inside your store takes the extra step of scanning the QR or NFC or downloading an app, you have to provide value right away. So they’re building loyalty starts by providing value to the user. So if it’s just a copy/paste of some marketing brochure that’s already available inside their store, obviously a person will be probably upset and will not scan again so loyalty starts by being very conscious that you need to provide value every step of the way. Then if you keep doing that on a regular basis, loyalty will be built upon itself. As a brand, of course, if you have a consumer who uses the app on a regular basis and is in your store all the time, you probably want to know about it, and you may want to cater especially to that person. I think it’s like any kind of relationship if it’s a win/lose scenario eventually it breaks. If it’s a win/win, you can keep going for a while, and you can have a happy marriage for years.

Rob: Yeah you hope. I believe it the mid tier brands are kind of flailing. There’s the high end brand, and then there’s cheap. Right? The mid tier guys are suffering. You got to create that consumer connection, I suppose in this way. You got to nurture that relationship. I see so many brands that are doing so terribly. I use it as an example a couple of times, because it was just horrific. I’m a Shazam user, I believe Shazam is another way of doing this. So you’ve got QR codes, you’ve NFC, you’ve got Blue Tooth, and that’s proximity. But then you’ve also got this thing called audio layer that’s around you or the ad layer that’s on television. During the Super Bowl I Shazamed a Toyota ad here in Canada, I went through the process of madly scrambling for my phone, hitting the Shazam button, Shazaming the damn thing, and then it said “yes” because it gave me the indication. I’m like, this is awesome. And it took me to the Toyota Canada twitter feed.

Yan: Yeah.

Rob: So, you must see that kind of stuff all over the place where it’s like, for me. So I have to put my wings down. I had to stand away from the couch, sit up, do a little bit of exercise; that is a Herculean effort. What they brought me to was something that pissed me off, because I made that effort. You must see that where the outcome is absolutely not what it should be. Are there any recommendations on- when people land on a page, what should they be seeing, what should they be doing?

Yan: Well, it’s really my opinion, but I believe that branding is moved from a one way type of conversation to a two way kind of conversation. Social media got people to think this way, but the product itself was not necessarily part of the conversation. So where we’re trying to go with the branding, and that’s what are platform is about, it’s not about creating the back and forth exercise and not the product in the middle of it. That’s a huge shift in thinking. In terms of the bad experience I think it was experiences that were focused on building content on one side and pushing it to as many people as you can on the other side. I think that QRs are probably the worst example. There’s nothing wrong with QR per se. I know that you’ve probably mentioned that quite a few times on your show. There are so many bad examples of how QR have been used. Things like having a QR in the [airplane] magazine. Obviously it’s not very useful. Or seeing an ad in a magazine where you have a QR and when you scan it, you get the customer loyalty chain. A QR code and maybe an NFC tag to me don’t really mean loyal customer. But if I’m using a brands app, say if we’ve gone through that effort in order to integrate, then all of a sudden you know that I’m a loyal customer, because I downloaded your app, and you want to treat me a little differently than somebody who might be casually scanning it through our code. Do you think about that kind of stuff where- listen if we’re doing a Beacon play and it’s in the store’s app the offers could be different than what would be on a QR code or an NFC tag?

Yan: Well, obviously if a brand wants you to provide special offers and content to people who have the app, the platform is built for that. You can even say a promo is going to be available only to enjoyed users, but it will not be available for less.

Rob: I love it. I love it. I just had this massive brain [fart]. Wow. This is awesome. Obviously. Obviously that’s what they’re going to do.

Yan: I’ve been at it for awhile so-

Rob: It’s like a revelation. You can do this. Obviously. Obviously you can do that Rob. Oh God. OK. It’s OK. Oh, it’s all right. You brought up the- we’re talking about loyalty, I’m actually blushing. We’re talking about loyalty here for a second. How does this create loyalty? How do you generate loyalty within a customer who’s going through this process of either tapping, scanning or being in proximity to a product? I mean, are there any keys that you guys have learned about creating loyalty with a customer base?

Yan: Well, I think there’s a golden rule; if someone inside your store takes the extra step of scanning the QR or NFC or downloading an app, you have to provide value right away. So they’re building loyalty starts by providing value to the user. So if it’s just a copy/paste of some marketing brochure that’s already available inside their store, obviously a person will be probably upset and will not scan again so loyalty starts by being very conscious that you need to provide value every step of the way. Then if you keep doing that on a regular basis, loyalty will be built upon itself. As a brand, of course, if you have a consumer who uses the app on a regular basis and is in your store all the time, you probably want to know about it, and you may want to cater especially to that person. I think it’s like any kind of relationship if it’s a win/lose scenario eventually it breaks. If it’s a win/win, you can keep going for a while, and you can have a happy marriage for years.

Rob: Yeah you hope. I believe it the mid tier brands are kind of flailing. There’s the high end brand, and then there’s cheap. Right? The mid tier guys are suffering. You got to create that consumer connection, I suppose in this way. You got to nurture that relationship. I see so many brands that are doing so terribly. I use it as an example a couple of times, because it was just horrific. I’m a Shazam user, I believe Shazam is another way of doing this. So you’ve got QR codes, you’ve NFC, you’ve got Blue Tooth, and that’s proximity. But then you’ve also got this thing called audio layer that’s around you or the ad layer that’s on television. During the Super Bowl I Shazamed a Toyota ad here in Canada, I went through the process of madly scrambling for my phone, hitting the Shazam button, Shazaming the damn thing, and then it said “yes” because it gave me the indication. I’m like, this is awesome. And it took me to the Toyota Canada twitter feed.

Yan: Yeah.

Rob: So, you must see that kind of stuff all over the place where it’s like, for me. So I have to put my wings down. I had to stand away from the couch, sit up, do a little bit of exercise; that is a Herculean effort. What they brought me to was something that pissed me off, because I made that effort. You must see that where the outcome is absolutely not what it should be. Are there any recommendations on- when people land on a page, what should they be seeing, what should they be doing?

Yan: Well, it’s really my opinion, but I believe that branding is moved from a one way type of conversation to a two way kind of conversation. Social media got people to think this way, but the product itself was not necessarily part of the conversation. So where we’re trying to go with the branding, and that’s what are platform is about, it’s not about creating the back and forth exercise and not the product in the middle of it. That’s a huge shift in thinking. In terms of the bad experience I think it was experiences that were focused on building content on one side.. an exact copy of the ad that you have in the magazine. These are all things that people have seen. We tend to remember those for a long time. We tend to use that as an example of just stupid product placement. I think you have to respect that people are smarter than that. You have to cater to the fact that they are smarter.

Rob: I think that early on, people thought of QR codes as just an easy way to get to a URL. You had, like, hey here’s my Facebook page, here’s my Twitter page, here’s my YouTube page, here’s my Instagram page, here’s my website. Scan this and I’ll take you to one of them. I think this was supposed to be the bridge between print and digital or physical and digital. Whatever we want to call it. Something like that. I think that that’s what was wrong. Is that I’ve scanned QR codes in magazines that take me to a blank page except for a link. Click here to go to this web page. I think that we didn’t know what we had in a QR code. Now we may have bludgeoned it to death, I believe, because nobody scans these things anymore, because all of a sudden there’s malicious links that pop up. You don’t know the origin of those links. There’s a whole bunch of stuff. Have we killed the QR code because of our ignorance?

Yan: The QR code has a bad [rating]right now because of those stupid use cases. One thing that we try to make sure when we do signage inside our store, is that we always put on the signage what are people going to get after they scan whatever tag we have there. After they scan, we make sure that that value is actually given to the people. If we do that, what we found out was that the [conversion rates] good. In some cases, we have inside store situations where 25% of people scan the QR code. If you look at the numbers on the market for QR in general, it’s anywhere from 0.5% I think to 5%. We’re doing well. The QR is the same. It’s just that the value proposition have to be communicated made sense.

Rob: Being in store in context, when you walk into a store, there’s a certain element of trust that you have. If the store is going to push out a QR code next to a product for example, there’s a certain element of trust that that QR code is not going to do something nefarious. It can account for some of that kind of stuff. Those numbers are ridiculous. As everybody does, if you relate the QR code activation rate to a banner I click through, everybody’s like, ‘My god, we’re doing 40 times the banner activity.’ It’s not the same. People always try to jam it into that context. I think that we should be having a strategically placed 90% click through rate or engagement rate from a QR code, if you’re doing it right. Is that possible?

Yan: Yeah, I think so. The conversation rate is bad when the use case is bad.

Rob: That’s a better way of saying it.

Yan: If you fix it, people will spend the time and do it. No matter if it’s a QR and an NFC or [ID code]. People will just do it. I actually have a good example. It’s probably the worst QR I’ve ever seen. I was driving in Montreal on the Carey [SP] Highway. For people who don’t know Montreal, it’s a very busy section of highway, many curves and so on. You need to be really focused on your car. You have that car company that has a big ad telling people how their car was safe. You had a big, big QR code on it.

Rob: This is on a billboard?

Yan: Yeah, on a big billboard by the highway. What they were saying about safety was totally ruined by that QR being there, because anyone who had scanned that QR would have put their lives in danger.

Rob: But you don’t put that there. The Quebec police put it there. So they can nab you for using your phone while you’re driving.

Yan: Oh, that wouldn’t be beyond them, that’s probably right.

Rob: That is exactly what it was. It wasn’t even a car company. It was like, hey listen, we’re going to use your name. We’ll give you a little bit of free branding, sure. Then right below that, there’s a cop. Everybody’s scanning those QR codes and it’s like that’s a $180 fine, thank you. I’m just joking. As long as they use that money to bring the Montreal Expos back into Montreal, I’d be a happy guy. Whatever it takes, QR codes.

Yan: That’s going to take many tickets I think.

Rob: What are some of the things? You worked with some of the big brands. So, what are some of the things that have worked for those guys and I’m really talking about the in-store experience in converting a casual customer to somebody who might be a little bit more loyal or somebody who you’re beginning a relationship with?

Yan: Yeah, so one thing that we’ve discovered talking to these big brands is that they all want to do something inside a store. They usually don’t know what. So, even the most sophisticated global brands you can think of, very smart people in there, they want to create an in-store experience, they usually don’t know what it is. Among the use cases that we find are quite popular, they’re going to want to focus on the top 5 or the top 10 main product highlights for a given product. And one of the things that they’re saying is that usually the sales people on the floor, they rotate every six months, it’s very hard for the brand to make sure that the message you’re going to get as a consumer is consistent. So, they want consistency and to make sure that that value proposition is delivered every time. So, that is one use case.
Another one that we see all the time, and it goes in the same direction, they want to make sure that they guide the person to the right product. So, for brands that may have, I don’t know, 20 different SKU’s inside a store, they want to make sure that they guide you to the product that is going to make the most sense for you. And in some cases, they want to guide you to the product that has bigger margins, but we try to make sure that they go with the first scenario. So, that’s another one.
We also find that the brands want to create a branding experience that goes beyond the product itself. So, as an example if we sell to a luxury apparel kind of brand, that brand may decide that they want to invite all females age 25 to 45 that go in front of a given product or a given weekend and invite them to a fashion show there 2 weeks later. SO, they want to extend the branding experience of the branding experience beyond the store. So, the changes in nature of the store a bit if you think about it as well. So, stores are still currently distribution centers so temporary stockage areas for products. Eventually, they are going to focus more, in my view, on the show-rooming and the experience side of things instead of just being at a place where you start products before people pick them up.

Rob: Does this combat show-rooming? A lot of retail companies looked at this as instead of creating open Wi-fi areas and helping customers do matching and finding products that are better for them, which is what we hope. We found companies basically clamping down on internet access, limiting cellular activity inside the store so that they kept you captive in there so that they couldn’t find another product or a better price. So, does what you guys do help open up show-rooming in a good way and help them combat that?

Yan: Well, I would hope so. The experience of the store that you mentioned where they kill the Wi-fi connection or they make sure that the walls are so thick that you will not get cell reception, it’s a bit like Microsoft in the 90’s trying to pretend that the internet didn’t exist or wouldn’t fly. So, they will just, lose customers in the long run, I think. We’re providing now inside the store makes a lot of sense. You find show-rooming. Show- rooming is typically when the store is only a place where you shop for price. So, if you shop for price, you will shop online and you find that you have sometimes cheaper options online. And then the store loses every time. The store has the advantage that

Rob: They’re in there.

Yan: You can touch and feel, you can talk to people around it. You can experience a product in a much, much richer way than online. Of course, pricing wise you still need to be competitive. And maybe the value proposition for the store changes but in terms of having an experienced center, if you will, that’s the best place. That’s the best place to do it. So, stores should move away from just stocking shelves and just trying to get the products out of the stores as soon as possible to providing a communication point that customer experience point that will make people forget about pricing.

Rob: Is there a sequence for that? You know, I’m in the store and I see a product that I want to buy or I’m interested in and I do something. I interact with it, I scan it, I tap it, I walk close to it for beacon, for Bluetooth, is there a sequence to get my attention that you found work? Like, “Hey, we’re here,” “Hey, it’s 10% off,” “Hey, sign up for the mailing list,” “Hey, do this.”? How do you gradually create that relationship with people?

Yan: Well, we found that he typically needs some candy, that’s for sure. But the candy can be a guess what the questions you have about my product. I have the right answers to it. So, we need that value proposition. It doesn’t need to be a promo, a discount, or something of the kind as long as you provide something that people want and makes sense and you make sure you deliver on that promise, people are going to use it. We’ve seen that countless times.

Rob: Yeah, you know I had this great interview a couple years ago with a Vancouver based coffee roasting company. It was Ethical Bean Coffee. It’s a roasting house in Vancouver, and you get them now in Loblaws up in Canada in the organic section. It’s amazing. It’s basically a fair trade coffee company, and they wanted to kind of take away the myth of fair trade or explain what they meant by fair trade, so they put QR codes right on the packages. When you scanned, it told the story of the bean, of the make-up of the bean that was in that bag. It also talked about they went down to Guatemala and did some video around where the plantation was where the coffee roaster coffees was grown on at the coffee plantation, and they talked to the owner of the coffee plantation. They created this immersive experience. Is that what we’re talking about as a great example of this?

Yan: Well absolutely, that’s part of the value proposition. That’s part of the branding. That might justify why they are a bit more expensive than some other options. If I’m a consumer and fair trade is important to me that might be enough for me to go and pick up the coffee, so that’s where we differentiate based on quality as opposed to just pure pricing. We see that all the time. We have a big client in the United States, and we’re going to employ with them in a few months. They have a high end line of products that tend to be about twice as expensive as their closest competitors, and usually their products sit side-by-side with the competitor’s inside Home Depots. You can think of how much a problem it is for them. If you look at the product itself, it looks almost exactly the same. So as a consumer, if you want to buy that premium product and then you see the other one half-priced, you start to have a moment of doubt inside the store. That’s terrible. That’s when they make sure they explain to people why their product is better than the next one.

Rob: And they’ve been able to increase their conversion rate as a result?

Yan: Well, we’re deploying with them in a couple of months, but I think it’s going to make a lot of sense.

Rob: It sounds like a follow-up episode right there. We’ll see how this goes, right?

Yan: Sounds good.

Rob: Let’s talk about this a little bit into the future because in-store activity…You know, there are people on one side who say there’s a store for everyone who has been changed as a result of this. You know the statistics. It’s crazy. The adoption of mobile, not only in-store, but out-of-store and in-home, and the adoption of as a first screen, and the way it’s kind of turning everything on its head. So, what does this do for the store of the future? My vision is very clear. It’s very simple, and you’re going to laugh at me again and say it’s very obvious.

Yan: Maybe not.

Rob: Maybe. The next big thing that’s going to happen is unlimited inventory, right? So I’m the store, any store, and I can buy any product from within that store, and that store will benefit from me being in that…Ultimately get credit for the purchase as a result of me being in that store. So, here’s an example. I walk into a Best Buy or I walk into, I don’t know, a marketplace, and I see a product that I’m interested in. I scan the product and I like, “Oh, look there are 14 variations of that and I want the 13th, but it’s not in store.” I buy it there, proximity, because I’m in the store. The store gets credit. The product gets shipped. I’m a happy guy. I’ve had a great brand experience. I see at some point like the retail footprint shrinking, but the inventory being endless. And the retailers still in existence but getting benefit, and all through this kind of technology, through low energy Blue Tooth, through NFC, through QR codes, or whatever happens. That’s my Utopian view in the short term. What do you see as the future of this?

Yan: Well, I think I agree with your insights. I would probably bring it even further. So, we see some experiments around stores where you cannot actually pick up a product. You can buy it and then it gets shipped to your place later. So, I think we’ll see more and more of those small square footage kind of places where you have very rich product experience and then the product gets shipped to your place later. Where I think it’s fantastic and there’s a huge potential is that there’s a way to change a business model. So, maybe the retail store will not be the place where you get compensated for selling the product, for giving you the physical product. You might be compensated each time you complete a sale with a given brand, so they then become an experience center and even if you end up buying online later on when you get home they may still get compensated because the experience you actually got it when you visited physical store.

Rob: Right. So they get credit for it?

Yan: We get credit for it. So there are obviously some technical challenges as part of that but I think it’s unavoidable. We’ll eventually get there.

Rob: What about you know also this theory I love it is like you were working with some of the brands. So you know you’ve got the roof which houses the product but more and more we’re seeing consumers create direct relationships with the brands and so listen I’m an Apple, oh it’s a bad example because they have their own stores, but say I’m a GE guy. I like my GE you know oven. I like my GE washer and dryer. I like my GE you know lawn mower, whatever it might be. Now I have a brand affinity. So I don’t care about home depot anymore. I care about the GE brand right? So now all of a sudden are you enabling that consumer to brand relationship which you are and what does that do to that retailer who is kind of like hey whoa what about me? Hey I’ve got the shelf right? You are facilitating that relationship. So how does that play out?

Yan: Great questions. I think there’s a lot of unknown on how it’s going to play out for all those different components. But I think what your question is raising as another question is what’s the central point of an understanding between a brand and a consumer. It used to be the store all the time.

Rob: Yes.

Yan: Now we have a multi-channel approach and with data being generated in all these different points. So there’s the challenge to integrate the customers view into something that is going to make sense all the time and it is going to be standardized from one channel to the next. But then the value proposition of each of the components inside that ecosystem changes. I mean that’s why I was mentioning earlier about the fact that the nature of the retail store is changing. They are probably on the path to disruption unless they find a better value proposition. I think in my view it should be around the product experience.

Rob: Yes. I agree with that. Doug Stevens who is known as the Retail Prophet talks about this as well. He said you really have to create. He is a Toronto based guy, very, very, very smart guy. You have to create that retail engagement at the place of business right? So it is the experience when they walk in the door and it’s not about you know just having a big open warehouse full of stuff. It is about engaging you know displays of the product or experience inside of the retail store. I’m fascinated by this whole you know disillusion of the store because of the one to one relationship with a brand because I see a point where I’ve gone into say a home depot. We’ve mentioned it a couple of times here.
I bought a barbecue, a good expensive barbecue and then you know I take it home and I’m ecstatic. I put it all together and then a year later you know a part breaks alright. So I go back into the place where I bought it and they’re like oh no you have to contact the manufacturer for that and so I end up inadvertently now I’ve got a direct path to the manufacturer just simply because I needed a product and then of course the next time I’m going to buy a barbecue I’m just going to buy it from the manufacturer right because I’m doing it anyways. I’ve got that relationship and now the manufacturer is talking directly to me and home depot is sitting like whoa hey Woodbridge why aren’t you buying from us anymore right? And they do it to themselves. It’s kind of frustrating. It must be frustrating but that’s what happens when you have to stock a billion products to drive people into the store to hitch your numbers. Now I might be way off on that but these are my experiences.

Yan: Well not only is it true but the fact that each of those components have a different role to play in the consumer journey it creates usually the integration problems. So the only way you can have a full picture of the consumer is to have some kind of integration with all of these components. I mean in theory it works well but in practice you have something called privacy that you need to take care of. So it’s very challenging to do it in the privacy ware way that is going to provide value for all the players in the ecosystem including the consumer. So there is tremendous potential for innovation there. I’m hoping that my company is going to play a small role in that but there are tons of opportunities for data integration and creating insights that will make sense for the consumer as well.

Rob: Alright so why aren’t companies doing this? There’s got to be a reason that people are not engaged like you know what is the head space, what is the knowledge level? Why should they be doing this? Why aren’t they doing this? Give me a summary of what’s going on in the industry the customers are talking to?

Yan: Well I think it’s essentially a conflict of business models. It’s probably the old innovators dilemma; in the sense that it is very hard to disrupt your own business model when it’s paying for the electricity of your place. So, that’s probably why those things take time to happen. It’s much easier to try and protect your data than try and integrate what third-party sources of data create value for them as much as you do for you. So, that’s my own explanation. But it’s going to happen anyway. There will just be more casualties on the wait problem.

Rob: Do you think that they’re afraid and they jump into things too quickly? What’s their motivator to get involved right now? Because if they don’t understand, yet they’re worried about disrupting their own business…is it fear that keeps them from it?

Yan: Well, it tends to start with greed. But then, greed, when you realize how complicate it is and they don’t move. And then fear comes in because you think “If I’m not doing it, I’m going to get in trouble.” And then you rush into it and do it badly. So, I think that’s one of the reasons why the buzzword sells so well. Like in retail, these days, big data is a big one. So, you mentioned big data. People just say “Well, we’ve got to do it.” They have no clue what should be the use case or the end result. But if you want to buy big data software these days, it’s a pretty hot topic. And then people realize “Oh, I never thought about what I would be doing with that.” That’s another problem. But we’ve seen that all the time. It’s not the first time in history it happens. It’s going to happen again.

Rob: Well, it’s going to keep repeating itself as we go through these innovation spurts and disruption spurts. And have you looked at any of the statistics in the mobile space, but how we use these devices and where we use these devices and how we use them in- store, and the impact of mobile on the entire shopping cycle. And it used to be a pretty simple process but now, it’s very complicated because we get interrupted with these devices wherever we are. If I’m a retailer, this is a big hill to climb. And you have to be open to some new suggestions or else, you’re going to wake up one day locked out of your own store. And that’s going to be a terrible thing and we’re starting to see that in the retail space. Do you have something to add to that?

Yan: I agree with you without a doubt; we’ll see many experiments. Probably, we’ll see many fail. And probably, we’ll also see a few winners and hopefully, we’ll be able to learn from them.

Rob: Well, I’ve learned a ton here. Thank you so much for doing this. Where should we send people?

Yan: To your website, obviously. Zaptap.com. You can contact us quickly. We like to think that we’re not only providers of software and retail, but I think we have a very smart group of people that can help solve the real retail problems. Of course, I’ll be happy to work with anyone; email address as well is fine.

Rob: Amazing. So, go to Zaptap.com. We’ve been speaking with Yan Simard, who is the founder of Zaptap, located in Fredericton, New Brunswick, Canada, yes. And if you’ve found value, please reach out to Yan and let him know what you thought of this episode, and I’d appreciate a little bit as well. Reach out to me, Rob@untether.tv. And of course, you could always show your love and your support by going to patreon.com/untether and flipping me a buck a month. That is the best way that you can show your love, really. I appreciate that very much. Yan, thank you for doing this, I appreciate your time.

Yan: Thanks, Rob. That was lots of fun.

Rob: It was a blast. And you guys who are listening, watching, wherever you are, whatever you are doing, thank you for tuning for another episode of untether.tv. We’ll be back next week.


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About Yan Simard
Yan Simard ZapTapZaptap was born when founder and CEO, Yan Simard, realized that information for retail items is often not readily available when it’s needed most; when consumers are in-store or using the item. As a result, Zaptap became the solution and is quickly becoming the global leader of Augmented Consumer Experience.

Before he was offering Augmented Retail Experiences to retailers and creating social in-store experiences, Yan spent his career in IT Management working for companies such as Bell Canada and Irving Oil. But it was his entrepreneurial spirit and passion for startups that led him to become the founder of a startup he could call his own. Always a visionary, Yan has a definite taste for disruptive innovations.

Yan originally hails from Quebec City but he now calls New Brunswick home. A proud (and busy!) father of four great kids who remain his driving inspiration, Yan is also an enthusiastic martial artist and traveler, who never misses a chance to play outdoors.

About the author

Rob Woodbridge

I'm Rob, the founder of UNTETHER.tv and I've spent 14 years immersed in the mobile and pervasive computing world. During this great time I've helped some of the most innovative companies grow their business through mobile. If you are in need of a mobile business advisor or coach, connect with me here to get things rolling.

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