june 7, 2016 new concept: the four quadrant disruptors … four... · 2016-09-06 · service (saas)...

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DEBORAHWEINSWIG,MANAGINGDIRECTOR,FUNGGLOBALRETAIL&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2016TheFungGroup.Allrightsreserved.

NEW CONCEPT: the four quadrant

disruptors framework

Finding Four Quadrants of

Opportunity in “Retail

Destruction” • The Four-Quadrant Disruptors Framework is a newmodel of thinking that identifies four areas ofopportunity for retailers and startups that serve theretail industry: 1.) new retail models; 2.) all-channel;3.)experientialretail;and4.)customerengagement.

• Fung Global Retail & Technology Managing DirectorDeborahWeinswig invented this concept in responseto the “retail destruction” seen in the most recentquarterandtherisinginfluenceofstartupsintheretailspace.

• This framework is the newest in Weinswig'scharacterization of shifts within the retail industry,which include her Consumer Hourglass Theory,illustratingretailers’performanceasareflectionofthesqueezedmiddleclassintheUS.

D E B O R A H W E I N S W I G

M a n a g i n g D i r e c t o r , F u n g G l o b a l R e t a i l & T e c h n o l o g y d e b o r a h w e i n s w i g @ f u n g 1 9 3 7 . c o m

U S : 6 4 6 . 8 3 9 . 7 0 1 7 H K : 8 5 2 . 6 1 1 9 . 1 7 7 9

C H N : 8 6 . 1 8 6 . 1 4 2 0 . 3 0 1 6

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NEW CONCEPT: the four quadrant disruptors framework Finding Four Quadrants of Opportunity in “Retail Destruction”FOUR-QUADRANTDISTRUPTORSFRAMEWORK

This is the latest in our occasional series on frameworks for innovationwithintheretailandtechnologyindustries.

InsightTheFour-QuadrantDisruptorsFrameworkisanewmodelofthinkingthatidentifiesfourareasofopportunityforretailersandstartupsthatservetheretailindustry:1.)newretailmodels;2.)all-channel;3.)experientialretail;and4.)customerengagement.FungGlobalRetail&TechnologyManagingDirector Deborah Weinswig invented this concept in response to the“retail destruction” seen in the most recent quarter and the risinginfluence of startups in the retail space. She debuted the concept at arecent industry event, Shoptalk, when moderating a pitch competitionamongagroupof15startups.ThisframeworkisthenewestinWeinswig'scharacterization of shifts within the retail industry, which include herConsumer Hourglass Theory, illustrating retailers’ performance as areflectionofthesqueezedmiddleclassintheUS.

ContextTheretaillandscapeischanging.Inthesecondquarterof2016,arangeofretailersmissedearningsandsalesestimates,andapparelwasnamedastheculprit.ManagementatbothKohl’sandMacy’smentionedduringtheirearnings calls that consumer spending on apparel and related categorieshad been sluggish. JCPenney has even decided to strategically shift itsmerchandisingmixawayfromapparel.Meanwhile,Amazonhascontinuedtogrow,accountingfor$0.51ofevery$1.00of incrementalgrowthinUSe-commercein2015.

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In response to these trends, retailers in all channels are changing toaccommodateshoppers’shiftingpreferenceswithregardtomulti-channelretail. Social media is redefining how consumers identify, select andpurchasegoods.Theriseofphoto-sharingappssuchas Instagrammeansthatmany people are posting selfies, sometimes daily—and they do notwant to post a photo of themselves in the samedress twice. Thus, theymayopttorentinsteadofbuyapparel.The“selfieculture”hasalsolikelyfueledgrowthinthebeautycategory,asmoresocialmediauserswanttomake sure they are always camera ready. Lastly, consumers areincreasinglychoosingtospendonexperiencesinsteadofthings,whichwethinkalsolinksbacktoasocialmediaphenomenonwecall“theInstagrameffect”:manyconsumerswanttobeperceivedonsocialmediaasleadinginteresting,fun,experience-richlives,sotheyaremoreapttopostaphotoofatrip,aconcertoranightoutatarestaurantthantheyareaphotoofanewdressorbag.

Figure1.SelectedRetailers’2Q16Comps/SalesResults:ActualVersusEstimates(%)

Actual Estimated

Kohl’s (3.9) 0.2Nordstrom (1.7) 0.1Macy’s (6.1) (3.4)JCPenney (0.4) (3.2)H&M 5 9Target 1.2 1.7Source:Companyreports/FungGlobalRetail&Technology

OurthinkingFaced with a changing landscape, retailers across the industry areincreasing their spending on technology, reallocating capital that mighthave formerly been spent on new stores. The rise of the software-as-a-service (SaaS) business model also demands continuous spending ontechnology services. If retailers and tech startups align their thinking onareas of opportunity, they will be better positioned to innovate andsucceedwithinthechangingretaillandscape.

Figure2.SelectedRetailers’CapitalExpenditure,2011vs.2015(USDMil.)

Source:Companyreports/FungGlobalRetail&Technology

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

CVS

Costco

DollarG

eneral

HomeDe

pot

JCPe

nney

Kohl's

Kroger

Macy's

Nordstrom

Sears

Staples

Target

TJX

Walgreens

2011 2015

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Source:FungGlobalRetailandTechnology

The Four-Quadrant Disruptors Framework identifies four key areas ofstrategicopportunityforretailcompaniesandstartups.Below,welookat15companiesthatfitintoatleastoneofthefourquadrants.Withineachquadrant,wehaveidentifiedthesubcategoryinwhicheachcompanyfits.

1. Newretailmodelsidentify“whitespaces”inhowconsumersshopin the evolving retail world, whether through an online bartercommunityorbynamingtheirownpriceforgoods.Thiscategoryalsoincludessomemorecommonemergingretailmodels,suchassharingeconomybusinesses(RenttheRunway,forexample)andcaringeconomybusinesses(suchasToms).

2. Theall-channelmodelofferssignificantopportunitiesforretailersandstartupstomergeshoppingchannelssoconsumerscanshopseamlessly when and where they want to. The all-channel areaincludes e-commerce platform solutions, “click and arrive”reorderingshoppingbuttons,next-generationstorelocationsthatbroadcast in-store inventory online, and in-store smart displaysdesignedtoprovideconsumerswithinformationonproducts.

3. Experiential retail encompasses retailers and technology startupsthatwork to repurpose existing store space tomake the shoppingexperience frictionless and more fun. This quadrant is importantbecause,eventhoughtheonlinechannelhasbeendrivingsignificantsales growth, over 90% of sales still happen in-store. Technologiesthat fall under this category include virtual fitting rooms, self-checkoutsolutionsandaugmentedreality(AR)applications.

4. Companiesthatfitintothecustomerengagementquadrantexploreways in which retailers can convert consumers to customers andenhance interactions with their customers on different platforms.Thisareaincludes,gamification,recommendationenginespoweredby artificial intelligence (AI), influencer marketing, and socialshopping“evangelizeandthrive”apps.

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Real-WorldApplications

Out of the four areas, customer engagement and all-channel initiativesreceivethemost investmentdollars.Asretailersconsiderfutureprojects,theFour-QuadrantDisruptorsFrameworkmayhelp thembetterassess ifpotential investmentswillyield results in thesekeyareas,andeventuallyinfluence top-line growth. Retail tech startups, on the other hand, mayidentify business opportunities in all four quadrants. Within eachquadrant,theymayseeexamplesofothertechnologiesdesignedtosolveretailers’ challenges in the same area. The framework helps tocontextualize retail startup businesses and allows for a more holisticapproachtosolvingproblems.

We debuted the Four-Quadrant Disruptors Framework recently at theShoptalk conference,wherewe categorized each of the 15 startups thatparticipated inapitch contestaccording to themodel.Below,weprofilethosestartupsandsortthembyquadrant.

The startups are: reKindness, Ideally, Meanbuy.com, TUKU, Radius8,Brickwork, Kwik, Reaction Commerce, Fitted Solutions, Shopic, Cimagine,Skrownge,Cognilyze,Shopography,Everfave.

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QUADRANT1:NEWRETAILMODELS HOWCONSUMERSSHOPINTHEEMERGINGRETAILMARKETPLACE

1.reKindness:OnlineFashionBarterCommunityDESCRIPTIONreKindnessisanonlinebartercommunitythatmakesitsimpleforuserstoswap clothing and accessories with other members of the community.Users can give away clothing that they no longer wear in order to getclothesthattheywillwearfromthe“communitycloset,”eitheronlineorat local events. Because users generate content themselves, thecompany’scostsare low,and itexpects togenerateaprofitbeginning inthe middle of next year. The company is promoting environmentalconsciousness and social responsibility. The company differentiates itselffromotheronlineconsignmentplatforms, suchasPoshmark,byallowingtransactionstobeconductedbothnationallyandlocally.

INDUSTRYE-commerce,barter,C2C

HEADQUARTERSAtlanta,GA

TEAMreKindnessFounderMelanieKovachisaformerCoxEnterprisesexecutive.In2004,sheledthelaunchofAutomart.com,andthenleditstransitiontobecome part of Autotrader.com in 2009. Kovach was named theAutomotiveRemarketingWomanoftheYearin2008.Shethenshiftedherfocus from used cars to environmentally conscious fashion and foundedreKindnessin2015.

TECHNOLOGYUsersuploadphotosofapparel itemsthattheywanttogiveawaytoaddthemto thesite’scommunitycloset.Forevery two itemsuploaded, theyreceiveonecredit.Ifanothermemberchoosesanitem,thenthatmemberpaysforshipping,andthedonatorgetsanothercredit.Thecreditscanbeexchangedfor itemsinthecommunitycloset,andtherecipientonlypaysshipping and handling. Prepaid shipping labels are emailed to the userwhensomeoneelsetakestheiritemoutofthecommunitycloset.

CLIENTSThe company targetswomenages 25–45with an annual incomeof over$40,000whoarefashion/beautyboxsubscribers.

FUNDINGBootstrap

WEBSITErekindness.com

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2.Ideally:NameYourPriceDESCRIPTIONIdeallyisaretailsolutiontoonlinesalesthataremissedduetostaticsaleprices.Itletsconsumers“nametheirprice”bychoosingthesalepricetheywanttopayforproducts.Shopperscreateawishlistviatheapp,andsetaprice they arewilling topay. Theappautomatically purchases each itemfor the shopper when it finds it available for the stated price, and theshopperpaysasmalltransactionfee.Ideallyusesapresetdemandcurve,so merchants can choose how much revenue they want to earn onproducts theyarewillingmarkdownbasedon inventoryavailability. Thecompanyalsogathersanalyticsonpricesensitivityforthebusiness.

INDUSTRYMobilecommerce,analytics,dynamicpricing

HEADQUARTERSSanFrancisco,CA

TEAMCo-FounderandCEODavidGudaiwasformerlyCMOofStorkieExpress,wherehewasinvolvedineveryaspectofdigitalmarketing,fromdesigntoimplementationtooptimization.HereceivedaBSandtwoMSdegreesinengineeringfromStanford.

Co-Founder and CTO Nicholas Babb has 14 years of experience in theindustryandwasformerlyaVPatsoftwaredevelopmentfirmCybergroup.Hehasexperienceleadingteamsandcontributingasafull-stackengineerandasystemsarchitect.

TECHNOLOGYFrom a retailer’s perspective: After a consumer makes an offer for aproduct,Ideallyusesthatoffertocreateaninteractivechart.Thecompanycan then decide to accept or deny the offer. When another customermakes an offer, a line is added, and the company can decide to accepteither,bothorneitheroftheoffers.Asmoreconsumersmakeoffers,thechartupdates,andtheretailercanseethedemandcurveanduseittopickanyrevenue,quantityorpricegoal.

Fromacustomer’sperspective:Shopperscancreateasmartwish listontheIdeallyapp,indicatinghowmuchtheywanttopayforaparticularitembyslidingthepricebarandsettinganexpirationdate.Iftheappidentifiesa sale from the respective retailer by the expiration date, the appautomaticallybuystheitematthatpricefortheshopper.

CLIENTSThe company is currently partnering with Target, Uber (for gift cards),AmericanAirlinesandsomee-commercecompanies.

FUNDINGUndisclosed

WEBSITEideally.com

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3.MeanBuy.com:NameYourPriceDESCRIPTIONMeanbuy.com is a business-to consumer (B2C) e-commerce companywhosetagline isand“PayWhatYouWannaPay.” It letsshopperssettheprice theywould like topay foravarietyof retailproducts, ranging fromwomen’s accessories to consumer electronics. The company’s businessmodel is based on flexible, demand-driven pricing, benefiting both thedemand and supply sides. MeanBuy specializes in product priceoptimization and inventory turnover maximization. Shoppers submit apriceandthenreceiveashippingdate;thehigherthepricesubmitted,thesooner the shipping date will be. If the product is still in stock on theshippingdate, then theshoppergets theproductat thesubmittedprice.Thecompanyaimstoreleaseanintegratedsolutionforthoseretailersthatareusingothersitestoliquidateinventory.

INDUSTRYDemand-drivenpricing,dynamicpricing

HEADQUARTERSChicago,IL

TEAMCEO Jeroen Stedehouder holds anMSc in financial mathematics and anMScinelectricalengineeringfromTexasA&MUniversity.Stedehouderco-foundedMeanBuyafterresearchingdynamicpricingandfindingsignificantpricinginefficienciesinthee-commerceworld.

Co-FounderWouterWolkenisthecompany’sCTO.

The company currently employs a team of seven in the tech, sales andleadershipareas.

TECHNOLOGYThe co-founders used the pricing strategy for financial derivatives toimproveefficiencyine-commerce.Productsaretraditionallysoldbasedonpriceandinventory,buttheco-foundersbelievethatcompanies’thinkingshould bemultidimensional, and that they should prioritize the roles ofemotionandtimeintheshoppingprocess.

MeanBuy’s platform is driven by a statistical algorithm fed by consumerpricingandbehavioraldata.Thebackendwasdevelopedtooptimallyservemerchants,offeringthemdemand-drivenpricingdata,acustomizableAPIforcross-platformcompatibilityandahighlyautomatedsystem.

CLIENTSListed brands on the site includeMichael Kors, Nautica, TommyHilfiger,Coach,CalvinKlein,Guess,DKNYandArmani.

FUNDINGBootstrap,privateequity

WEBSITEmeanbuy.com

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QUADRANT2:ALL-CHANNELCONSUMERSCANSHOPFORWHATEVERTHEYWANT,WHENEVERTHEYWANT

4.TUKU:SeeIt,BuyItDESCRIPTIONTUKU provides a mobile opportunity for proximity-based in-storemarketing, giving retailers the chance to convert showroomers into in-storepurchasers.Thecompany’s solutionenablesproductsonshelves to“speak for themselves”: shoppers tap their smartphoneon theTUKU tagonashelfinordertoseeeverythingtheyneedtoknowaboutthatproducton their phone. TUKU thus creates a new channel of communication forsellers,storeassociatesandpotentialcustomers.Currently,thecompanyisusinga“managedservicesplusperformance-based”revenuemodel.

INDUSTRYProductinformation,in-storemobilemarketing

HEADQUARTERSOntario,Canada

TEAMPresident and CEO Mark Baldwin holds a BA in administrative andcommercialstudiesfromWesternUniversity.Heheldvariousmanagementand business development positions before founding Conversys, whichwentontobecomealeaderindigitalpromotionsmarketingbeforebeingsold to Transcontinental. He served as VP, Marketing Activation, atTranscontinental,wherehehandledstrategicpartnershipsacrossallareasofthebusiness.

OtherkeyexecutivesincludeCFOLarryChevalierandCTOJohnLeidl.

TECHNOLOGYShopperstaptheirsmartphoneontheTUKUtagonashelfinordertogetall the information they want about a given product. The productinformationissenttothesmartphoneandpresentedinaneasy-to-digestmanner,helpingshoppersmaketheirpurchasedecisions.

The solution allows for the tracking of rich shopper-behavior data,whilealsoprotectingshopperprivacy.

CLIENTSTUKU targets companies in the consumer electronics, sporting goods,pharmaceutical, health and beauty, and wine categories, as well as anyproductsthathaveafairamountofspecificationdetails.

FUNDINGRaisedseedroundfrompreviousinvestorsintheco-founder’slastcompany

WEBSITEtukuinc.com

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5.Radius8:SeeIt,BuyItDESCRIPTIONRadius8 is an intelligent, all-channel, cloud-native platform that enablesretailers to activate the contents of their brick-and-mortar stores foreffortlessonlinediscoverybyconsumerswhoareonlineandnearthestoreorwithinacertaindigital radius.Retailerscanselectwhat inventorytheywanttobeexposedtolocalcustomers.Bymergingphysicalinventorywithdigital technology, the companyhelps retailers sharea “safe” levelof in-storeinventorywithnearbycustomerswhoarecurrentlybrowsingonline.Radius8 currently charges about $1,400 per subscription per year forbroadcastingontheexistingsite.

INDUSTRYSaaS,B2C,online-to-offline(O2O)

HEADQUARTERSPrinceton,NJ

TEAMCEO Sandeep Bhanote has more than 15 years of experience as anentrepreneur. He has built strong product, marketing and innovationteamsintheretailtechnologysectorandsuccessfullydeliveredprofitableand scalable emerging technologies tomarket. Bhanotewas the founderand CEO of Global Bay Mobile Technologies, a pioneer in deliveringtransactional mobile solutions to emerging omni-channel and brick-and-mortarretailersanddrivingthewideadoptionofApplemobiledevicesinstores. This innovationwas oneof the first steps toward closing the gapbetweenthedigitalandbrick-and-mortarchannelsinretailing.GlobalBaywaslateracquiredbyVeriFonefor$27.5million.

OtherkeyexecutivesincludeCTOEvanShaw,SVPofProductChiParkandDataScientistBrendanPhelan.

TECHNOLOGYRadius8engagescustomersbasedonwheretheyarebyallowingthemtosee inventory at local stores through intelligent inventory display andmanagementsystems.

CLIENTSRadius8targetsretailbrandssuchasKateSpadeandToryBurch,andhasrecentlypartneredwithGuess.

FUNDING$793,000indebtfinancing

Raised$500,000inlastround

Currently raising $1.2 million; $90,000 has been raised through venturecapitalandsomeangelinvestors

WEBSITE radius8.com

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6.Brickwork:SeeIt,BuyItDESCRIPTIONBrickwork is the first scalable SaaS platform for retailers that lets themcreateaseamlesscustomerpathbetweenonlineandin-storeshopping.Theplatformfeaturesonline-to-storeconversionfunnels,suchasstorelocators,services and appointments, events and promotions, and associates andstyles,whicharealldeliveredtothecustomerviastorepagesandwidgets.Forexample, customersareable touseBrickwork toRSVP tostoreeventsand set personal shopping sessions. The platform helps retailers managecontent anddatamoreefficiently, therebybetter engaging customers andassistingthemastheymakingtheirpurchasedecisions.

INDUSTRYSaaS,site-to-storedemand

HEADQUARTERSNewYork,NY

TEAMFounderandCEODavidMunczinskibeganhis careerbuildingnewdigitaland international businesses for iconicAmerican apparel brands, notablyRalph Lauren, and was a founder of two media companies, CurrentMagazine,publishedbytheformerNewsweek,and Indabamusic.com.Heholds an AB in anthropology from Harvard University and attended TheWhartonSchoolattheUniversityofPennsylvania,whereheservedasoneof 40 Leadership Fellows. Munczinski serves as a captain fundraiser forCycle for Survival, the nation’s largest fundraising organization for rarecancerresearch.

Thecompanycurrentlyhas20peopleworkingonitsteaminNewYork.

TECHNOLOGYBrickwork’s SaaS solution features mobile-optimized, SEO-optimized andinternalized e-commerce widgets that allow for data syndication, socialsharing,NPSmanagementandRESTfulAPI.

CLIENTSBrickwork is targeting large enterprise retailers across categories withstorenumbersrangingfrom50to50,000.

FUNDINGSeedfundingbyventurecapitalfunds

WEBSITE brickworksoftware.com

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7.Kwik:ClickandArriveDESCRIPTIONKwik is an end-to-end IoT platform that allows retailers and brands toprovide“clickandarrive”services.Thecompany’sone-clickphysical“buy”button allows users to seamlessly restock household essentials. Kwik’smodel is similar to Amazon’s Dash, but Kwik allows consumers toautomatically reorder items from more brands than Dash does. Thecompanywas launched in Israel a fewmonths agoandplans to launch intheUSsoon.

INDUSTRYIoT,on-demandshopping

HEADQUARTERSTelAviv,Israel,andPaloAlto,CA

TEAMCo-FounderandCEOOferKlein isa formerpilotwith the IsraeliAirForce.Hehas over 11 years of leadership experience in the IoT, augmented andvirtualreality,andnetworks.BeforefoundingKwik,heledtheproductandhumanfactorsgroupatElbitSystemsandmanageditsinternalstartupsformanyyears.

Co-Founder and CTO Shlomi Atias has more than 14 years of experience inadvancedwireless,Wi-Fiandembeddedsolutions.

The company currently employs 13 people, including engineers andbusinessdevelopers,

TECHNOLOGYKwikisanopenIoTplatformthatwillsoonbeavailabletoallbrandsacrosstheglobe.Brandsandsupplierscanconnect their currentorder systemtotheKwikplatformthrougheasy-to-implementAPIs.Thisenablesbusinessestomaintaindirectcontactwithcustomers.

Kwik’s IoTplatformalsoprovidesadashboardthatgatherscustomerdata,including total clicks, orders and conversion rates. Brands are offered adirectchanneltotheircustomersaswellastheopportunitytocollectreal-timedataontheirbuyinghabits.

CLIENTSKwik had signedwith several consumer packaged goods names, includingHuggies,Domino’s,StraussWater,Eden,SodaStreamandBudweiser.

FUNDING$120,000

WEBSITE kwik.me

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8.ReactionCommerce:E-CommerceinaBoxDESCRIPTIONReaction Commerce is an open-source JavaScript e-commerce platformsolutionthatprovidesreal-timemerchandising,pricing,promotingandliveconversion monitoring. The platform allows for drag-and-dropmerchandising and dynamic pricing/promotions; editing content in-lineandcreatingormodifyingthemes;anditisfullymobileresponsive.Thereis an integrated library of apps, as well as analytics with event trackingincludedatthecore.Thecompanyiscurrentlyatthepre-revenuestage.Itexpects itsprofitmodeltobebasedonaSaaSsubscriptionthat istiedtovolumeandacommissiononeach transaction. Italsogenerates revenuefrom sales of about 60 reaction apps. The company currently has 1,300shopslaunchedinbeta.

INDUSTRYE-commerce,m-commerce,SaaS

HEADQUARTERSSantaMonica,CA

TEAMCo-Founder and CEO Sara Hicks hasmore than 20 years of e-commerceandentrepreneurialexperience.Shehasgonefrommanagingproductstoleading teams responsible for interface design, user experience, contentdevelopmentandproductstrategy.Shehashelpedscaleteamsandbuildproducts that have generated billions of dollars in transactions andreachedmillionsofconsumers.HicksisagraduateofUCLA.

AaronSingmaster-JuddistheCTO.

The team includes former Yahoo and Etsy employees in the productdevelopmentdepartment.

TECHNOLOGYReactionCommerceoffersamodern,open-sourceplatformwitheasy-to-extend templates and themes. It uses HTML, CSS and JavaScriptarchitecturethatisscalable,fast,reactiveandreal-time.

Thesolutionprovidesreal-timemerchandising,pricing,promotingandliveconversionmonitoring,andisidealforsmallandmedium-sizedbusinesses.

ClosecompetitorsofthecompanyincludeMagentaandShopify.

ThesystemincorporatesGoogleanalytics.

CLIENTSReactionCommercetargetsmidmarketretailcompanies.

FUNDING$500,000pre-seed

Thecompanyisinthemiddleofraising$2.5millioninseedfinancingandplanstousethefundingtogrowitsmarketingandpressteam.

WEBSITE reactioncommerce.com

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QUADRANT3:EXPERIENTIALRETAILMAKETHESTOREAPLACECUSTOMERSWANTTOSPENDTIMEIN

9.FittedSolutions:FittingTechnology

DESCRIPTIONFittedSolutionsisavirtualfittingtoolbasedonsmartphoneimagecapture.Thesizingtechnologyisusedbyonlineretailerstoprovidecustomerswithbetter-fitting shoesandclothing.The tool isdesigned tohelp retailers cutdown return costs. The company aims to achieve a 5%–10% reduction inreturnsforclients,butsaysthatevena1%reductionequatestomillionsofdollarsformostretailers.CompetitorsincludeSizerandTrueFit.

INDUSTRYFittingtechnology

HEADQUARTERSGreaterBostonArea

TEAMCEO JonathanGerber is the former co-owner andChief TradingOfficer ofHorizonTechnology,aglobal computerhardwaredistributionandservicescompany.Over10years,hehelpedgrowthecompanyfromastartuptoa$100-millioncompanywith125employees.HefoundedFittedSolutionsthispastFebruary.Inadditiontohisprofessionalwork,hefoundedtheHolidayDreamsFoundation,anannualholidaygiftdrive,andhasbeen involved inleadership positions with the Holliston Pantry Shelf and Jewish FamilyServicesofMetrowest.

The team includes a CTO, two engineers and a part-time marketer. Thecompany plans to grow itsmarketing and sales staff in the future, but isdedicatedtokeepingthestructureextremelylean.

TECHNOLOGYFittedSolutionsreliesonacloud-basedsystemand3Dscanning.

CLIENTSFittedSolutionsistargetingonlineretailers(Zapposisonepotentialclient),brandsandshoemanufacturers.

FUNDINGBootstrappingtotaled$20,000

The company also raised around $250,000–$500,000 from family andfriendsforproductdevelopmentandcustomeracquisition.

WEBSITEfittedsolutions.com

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10.Shopic:Self-CheckoutDESCRIPTIONShopicisaniOSandAndroidappthatenablesshopperstoskiplinesatstoresby scanning and paying for itemswithin the application.While self-checkouthasbeenused inmanygrocerystores,nonfoodretailers lose$14billioneachyearfromabandonedpurchasesduetolongcheckoutlines.Inasurvey,92%ofrespondents said theypreferred self-checkoutand90%said theydidnot likethe experience they currently get at self-checkout stations. Among the fewstartups delivering solutions in this area, Shopic is the largest. It provides adifferentiated experience for self-checkout in nonfood stores and for smallbasketsizes,unlikeitscompetitorssuchasSkipandScandit.

INDUSTRYIn-storecommerce,mobilecommerce,self-checkout

HEADQUARTERSTelAviv,Israel

TEAMCo-FounderandCEODanBendlerholdsaBAincomputersciencefromTheInterdisciplinary Center, Herzaliya, and an MBA from Tel Aviv University.AfterservingasacombatcommanderintheIsraeliDefenseForce,Bendlerworkedassoftwaredeveloper,thenasaprojectleaderatWix,CheckPointSoftwareTechnologiesandVerint.

The team also includes Co-Founder and CTO Eran Kravitz, who has morethan 20 years of programming experience, and Co-Founder and VP ofProductRazGolan.

TECHNOLOGYShopicisaQR-code-empoweredexpressself-checkoutapp.

Shoppers can scan items andmake secure paymentswith just two clicks,the first to add an item and the second to confirm payment. Shopic alsonotifiestheuseraboutspecialdealsordiscountsthatareavailable.

Shopiccanbeintegratedintotheretailers’ownapp.TheShopicframeworkconsistsoftheapp,whichconnectstobothacloudservicethatcontainsacommerce engine, a pricing and promotion engine, and an integrationmoduleandtoasecuredpaymentgateway.Thecloudthenconnectstotheretailer’sownITinfrastructure.

CLIENTSShopic targets nonfood retailers whose customers generally have smallbasket sizes. The company has partneredwith several drugstores and toystoresinIsraelandiscurrentlyexpandingtoapparelretailers.ThecompanyseekstoworkwithstoressuchasCVSandRiteAidintheUS.

FUNDINGRaised $850,000 seed round venture capital and angel investors about$1milliondollars

The company was part of the Tel Aviv–based accelerator SigmaLabsAccelerator,whichwasbackedbyYahoo.

WEBSITE shopic.com

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11.CimagineMedia:ARDESCRIPTIONCimagineisanARcommercecompanythatprovidesretailerswithamarkerlessAR platform that can be easily integrated and used across multiple channels.Cimagine’sappenablesconsumerstousetheirmobileandwearabledevicestovisualize products in realistic 3D while browsing online at home or in-store,helpingthemmaketheirpurchasingdecisions.ThecompanygeneratesrevenuebasedonaSaaSmodel.CompetitorsofCimagineincludeAugment,Pair

INDUSTRYAR,retail,SaaS

HEADQUARTERSIsrael,withofficesintheUKandtheUS

TEAMCo-Founder and CEO Yoni Nevo holds a bachelor’s degree in computerscience and an MBA from Tel Aviv University. He has over 15 years ofinternationalmanagementexperience andpreviously spent 13 years at ECITelecom. His most recent position at ECI was Head of Solutions BusinessDevelopment, where he was responsible for creating sustainable strategicallianceswithotherleadingcompanies.BeforejoiningECI,NevomanagedanR&DteamforAT&T’spredecessor,SouthwesternBellMobileSystems.

TheteamalsoincludesCo-FounderandVPofProductNirDaube,Co-Founderand VP of R&D Ozi Egri, Co-Founder and Director of 3D Design AmiramAvrahamandVPofSalesandBusinessDevelopmentJoeRecchia.

TECHNOLOGYCurrent product categories include home and home decor, appliances,electronics, floor coverings,wall coverings, lighting and accessories. By theendof thisyear, thecompanywill add jewelry,and itplans toexpand intofashion,apparelandfootwearnextyear.

The company taps into VR technology and creates augmented stores asvirtualshowrooms.Customersbringpicturesofaroomintheirhometothestore, and the tool allows them to see it in 360 degrees and adddownloadablephotosofproductstoseehowtheywouldfitintheroom.

Cimagine also offers augmented sales tools; the company has used its uniquevisualizationplatformtohelpCoca-Colaidentifygoodplacestoinstallcoolers.

The company uses its own 3D models, whereas most other companiesoutsourcetheir3Dtechnologies.

CLIENTSShopDirect,theUK’sfourth-largestonlineretailer,isacurrentclient.

Cimagine has also recently partnered with John Lewis, the largestdepartment store chain in the UK, and launched the world’s first ARshowroominJohnLewis’sflagshipstore.

FUNDINGUndisclosed

WEBSITE cimagine.com

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QUADRANT4:CUSTOMERENGAGEMENTHOWDOYOUCONVERTTHECONSUMER?

12.Skrownge:GamificationDESCRIPTIONSkrowngeusesgamificationtoprovideshopperswithrelevantandentertainingbrandexperienceswithpersonalizedincentivestodriveretailsales.Skrownge’smobileappprovidesmobileentertainmentwithretailerrewardsinordertostimulatestoretraffic.Consumerswinprizesfromretailersbysolvingpuzzlesandplayingtriviagames;theycanredeemortradetheirprizesatanytime.Thecompanyhas5,000usersintheBayAreaandisseekingtoscaleup.

INDUSTRYGamification

HEADQUARTERSSanRamon,CA

TEAMCo-FounderTedFagensonholdsaBSEEinelectricalengineeringfromRutgersUniversityandanMBAfromtheUniversityofRochester.HepreviouslyworkedatRaytheon,wherehecontributedtothedesignofthePatriotmissilesystem,andatAT&T,wherehebuiltnext-generationvideo-conferencingtechnology.Hehasawiderangeofexperiencewithstartups,havingpreviouslyfoundedHuddlesphere,andhasbeenontheleadershipteamofEcoFactorandChargePoint.

Co-FounderKartikJaggi’sbackgroundisinmachinelearningandmedia.

TECHNOLOGYThecompanyhelpsretailersrewardtheirloyalcustomerswithdeeperdiscountsinfun,gamifiedexperiences,ratherthanthroughstandardpromotions.

Skrowngeusesgeolocationandmachinelearningtoproviderelevantbrandcontentandpersonalizedbrandpromotions.Userscanengagewithrelevantbrandcontentandreceivepersonalrewards.

Theappincorporatesdemographicdatainitsrecommendationengine.

TheappisavailableforiOSandAndroid.

CLIENTSThecompanyistargetingshoppingcentersandmallsandcategoriessuchasliquor,beer,wine,spiritsandbeauty.

ThecompanyistargetingbrandssuchasLululemonandVictoria’sSecret.

FUNDINGUndisclosed

WEBSITE skrownge.com

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13.Cognilyze:AIDESCRIPTIONCognilyzeistheonlypsychology-based,motivation-drivenrecommendationsenginebasedonAI. Inordertohelpcompaniesprovidehighlypersonalizedand relevant product suggestions, it collects data on consumers’ buyinghabitsandanalyzesthemotivationsbehindtheirpurchases,ratherthanjustproviding statistics. Cognilyze focuses on why people buy rather than onwhat they buy. The system builds a psychological profile of each shopper,takingintoaccountwhathasmotivatedtheshoppertobuyinthemoment.

INDUSTRYAI,e-commerce,analytics

HEADQUARTERSBeitShemesh,Israel

TEAM Co-Founder and CMO Ari Ginsberg holds a BA in accounting from SUNYEmpireStateCollegeandanMBA fromFordhamUniversity.After receivinghis MBA, he started a small list brokerage and management firm calledContact Marketing, which has grown to become a leading direct mailconsulting firm.Hehelped lead the company to its first contractwith a $1billione-tailer.

TheteamalsoincludesCo-FounderandCEODvirLehrerandCo-FounderandCTOBruceKrulwich.

TECHNOLOGYThe shopper psychological profiles created by Cognilyze help businessesoptimizeengagementwithcustomersandenrichtheirshopperdatabases.

Recommendations can be provided in real time, as push notifications orbyemail.

CLIENTSOnlineretailers

FUNDINGUndisclosed

WEBSITE cognilyze.com

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14.Shopography:InfluencerMarketplaceDESCRIPTIONShopographyisaproductdiscoveryandpurchaseplatformthatenablesconnectionsbetweenbrandsandconsumersinafunbutauthenticway.Shopperscanusetheplatformtofind,shareanddiscussproductsandtrends,andusetheAIaspectoftheplatformtogetpersonalizedrecommendations,whilealsousingthebuilt-inpricecomparisontoensureproductsareavailableattheirlowestprice.Thecompanynowownsdatafrom5,000retailersand130millionproducts,whichhavebeenbuiltintoitsnewdata-driveninfluencermarketplace.Shopographyisexpectedtohelpretailerssave75%ofthecostofemployinginfluencersbyremovingthemiddleagencycost.

INDUSTRYE-commerce,influencermarketplace

HEADQUARTERSNewYork,NY

TEAMCEOMarkZuradastudiedanthropologyandengineeringatDukeUniversitybeforegoingontogetalawdegreefromtheUniversityofMiami.Hisfoundationincodingandentrepreneurshiphasenabledhimtodevelopskillsacrosstheboardintechandcreativemanagement.PriortofoundingShopography,hewastheCEOandfounderofMediaverse,acloudandsoftwareconsultancy.HealsowasthetechdirectoratWieden+Kennedy,thecreativeagencyofrecordforcompaniessuchasFacebookandNike.

CMOFionaPietruskiisinchargeofconsumermarketingforbankingandInternetbankingonlineproductwithafocusondigitalconsumermarketingandinfluencerstrategy.

ChiefExperienceOfficerNoahHilsenradgraduatedfromtheParsonsSchoolofDesign.

Theteamalsoincludesafreelancecopyeditor,twoback-enddevelopersandaprojectmanager.

TECHNOLOGYUsingtheShopographyplatform,userscanbrowseproductsthathavebeenrecommendedtothembyfriendsandexperts.Userscansearch,uploadimagesorscanbarcodestoshareitemswithfriendsviaachattool.Thebuilt-inpricecomparisontoolletsshopperspurchaseanyoftheitemsatthelowestpriceavailable.

Theplatformreliesonadata-drivenapproachthatmatchesretailerswiththerightinfluencers.

CLIENTSShopographyistargetinge-commerceretailersthatwanttooptimizetheirinfluencerstrategies.

FUNDING$140,000

WEBSITE shopography.com

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15)Everfave:EvangelizeandThriveDESCRIPTIONEverfave is a social andmobile referrals platform that enables retailers to“evangelizeand thrive” throughword-of-mouthcustomer referrals. Ithelpsphysical businesses, brands and retailers grow their customer base andincreasesales.Ontheapp,ashoppercanrecommendabusinessviaTwitter,Facebookandmanyothersocialnetworks(Everfave’sreferralsaresharedonmore than 25 platforms). The user sends the referral to a friend,who canreceive the referralvia textmessage.Users receivecustomizedrewards forevery referral they make, and can also recommend special offers andpromotionstotheirfriendsandfamily.

INDUSTRYCustomeracquisitionandengagement

HEADQUARTERSSanFrancisco,CA

TEAMCEORahulMewawallaholdsanMBAfromNorthwesternUniversityandisontheboardofmanycompanies.HewasnamedaTop40under40leaderandhas received prestigious awards such as the FutureMobile Gold Award. Inpartnership with the White House, Mewawalla helped build the US’s firsttechnologyandentrepreneurshipprogram,based inSanFrancisco, inorderto developnext-generation technologies anddrive innovation.Hewas alsotheCEOandco-founderofIMedia.

TECHNOLOGYEverfaveprovidesbusinesseswithadashboardthat letsthemmonitorhowmany users are recommending their products to friends and via whatplatforms. It also can be used to track shopper cycles by geographic,demographicandSKUdata.

Retailers can also see how many referrals are actually interested in themessagetheyreceived.

CLIENTSEverfave’s current clients include Sonoma Chicken Coop, La Bella Laser &Slimming,MoveStrongStudio,RamagiPizzaandVintageMassageTherapy.

The company targets a broad range of retail categories, includingfashion apparel, footwear, consumer electronics and consumer packagedgoodscompanies.

FUNDINGUndisclosed

WEBSITE everfave.com

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DeborahWeinswig,CPAManagingDirectorFungGlobalRetail&TechnologyNewYork:917.655.6790HongKong:852.6119.1779China:86.186.1420.3016deborahweinswig@fung1937.comJingWangResearchAssociateHONGKONG:10thFloor,LiFungTower888CheungShaWanRoad,KowloonHongKongTel:85223002470LONDON:242-246MaryleboneRoadLondon,NW16JQUnitedKingdomTel:44(0)2076168988NEWYORK:1359Broadway,9thFloorNewYork,NY10018Tel:6468397017FBICGROUP.COM

june 7, 2016 new concept: the four quadrant disruptors … four... · 2016-09-06 · service (saas)...

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