A Podcast By Mike Giambattista, TheCustomer, April 24, 2024
I recently had a conversation with Yaniv Zukerman from Cust2Mate about the transformative impact of technology on retail shopping. We explored the development of smart shopping carts designed to simplify the shopping process for consumers while enhancing operational efficiency for retailers. Yaniv shared insights on how these carts can address challenges like inventory shrinkage and optimize store performance through strategic data use.
Yaniv also highlighted how their technology integrates features of online shopping into the physical store experience. As you maneuver the cart through store aisles, it provides personalized recommendations and promotions tailored to your shopping habits. This technology not only customizes the shopping experience but also creates new avenues for stores to connect with their customers.
Our discussion covered the implementation of these smart carts in locations like Morton Williams, with prospects for broader adoption across the Americas. It’s exciting to consider how such innovations could redefine the future of retail, making it more interactive and attuned to consumer preferences.
The conversation offered a glimpse into what might soon become a regular feature in supermarkets worldwide.
Mike Giambattista
Yaniv Zukerman is CMO at Cust2Mate and I’ll let Yaniv give a better description of Cust2Mate’s unique offering. But I had a chance to get introduced to the product and the thinking behind it at NRF earlier this year, and one I don’t claim to any real expertise in that field, but even without any real expertise in the field I can tell that, uh, from a layman’s perspective it’s kind of a game changer. Uh, my opinion only. But, um, thank you for joining me, really appreciate it. Um, hopefully you can do a better job of describing uh, the, the product, and it’s kind of uh place within the broader grocery market space than I have.
Yaniv Zukerman
So first, mike, thank you for having me, thank you for the opportunity.
I always like talking about our product and solutions and technology and everything that has to do with retail and customer experience per se. It’s kind of a habit for me for many years. So I think we have a solution. First, it’s a smart shopping cart. It’s a cart, it’s smart. It helps you do your shopping in a better way, in a faster way, with better ease, more value, less time being spent, less friction.
That’s from the point of the shopper, but it also helps the business of the retailer, both, and certainly because we help make their customers happier, and happier customers are more loyal customers, and more loyal customers eventually contribute to the top line and your bottom line over time, but also immediately, quite immediately.
But more than that, we enable them to open the door for new business models. Business models we help them optimize their in-store operations, first by automating the checkout to a very large extent, but also by using the data that is being collected throughout all the shopping journeys of all the customers using our carts, which is a goldmine, as you can expect. And another issue that we help them with is the issue of inventory shrinkage, of retail theft. We all know how dire the situation right now is out there, and this is another thing we help. We cannot help them completely raise this issue, but we hope them protect their transactions and their equipment the smart card equipment in a better way, especially when you compare it to other alternatives. So better results, better business results, better customer experience, better operations and bottom line.
Mike Giambattista
I’d like to see our solution as something that we help our retail customers bring the online experience into the physical store, into the physical shopping experience and correct me if I’m wrong here, but as I understood it, Cust2Mate’s smart cart solution is essentially a modular one, in that it can be used and kind of bolted onto, if you will, any existing shopping cart. It doesn’t require a full re-inventorying of the fleet of shopping carts. Basically, whatever the fleet looks like right now, you can bolt this smart cart solution onto it and it works really well. So one I think that’s a pretty significant differentiator and I’m only speaking anecdotally here from my very limited experiences. But we have a grocery store which we frequent here. It’s a pretty good one.
They’re pretty progressive who implemented a smart cart, I’m going to say about six or eight months ago, and I’m not going to say who they are because it’s terrible, it’s just a horrific user experience. I mean, almost from the first interaction with it. You’re kind of going this is just awful and it just gets worse from there. Um, and now that I had something to compare it to from my experiences with with you and guy at NRF, it’s remarkable that the difference, the different ways people are coming at this particular problem, um, so I wanted to talk a little bit about how custom mate has thought about the user experience here, because, uh, I’m sure that that the smart cart solution at my grocery store also delivers, um, a gold mine of of data. Um, I mean, they kind of all do that. It is not a modular solution like Cust2Mates is, but the user experience is utterly awful. It’s just terrible. And yet the user experience with Cust2Mates is stellar. There’s a big difference in there, so maybe we can talk about the thinking that went into that.
Yaniv Zukerman
Sure, sure, with pleasure. So I think the first or even our own first generation of cards did not did such a stellar job as you mentioned right now. It was quite similar to the ones that you have experienced and many of our competitors still offer to the market, which are big, bulky, fully integrated, very hard to handle, very hard to maneuver within the store, and a lot of effort was put into the technology, as many of them are coming as technology companies rather than retail or customer experience-focused companies and retail or customer experience focused companies, and hence the results that you’ve just described your own personal result. So we’ve learned from our own experience and from our customers, both the retailers and the end users, what needs to be remedied, what needs to be changed in order to improve the customer experience, and that led us eventually to the development and the introduction of our smart cart 3.0 generation, which is a game changer, as you mentioned. It’s completely different and it’s modular. And, first and foremost, as we think about customer experience, we think of the end customer experience, but also the retailer experience and the employee’s experience how they need eventually to operate the carts within the store, because even if the customer would be satisfied and the employees wouldn’t like our solution. That won’t work either, so that’s another thing we need to consider. So the first conclusion we arrived to pretty immediately is that we need to make it much more agile, less heavier, less bulky, something that resembles as much as possible the existing smart card. So we thought, okay, let’s take an existing smart card and just build on top of that without the need to change this, and that immediately led us to the understanding that we need to, eventually, the smart card. Most of the smart card lies within the smart panel, both. The screen is there, the computer is there, the sensors are there, everything is almost there, and now we just need to place it on wheels. The integration, of course, is digital. Okay, you’re doing via communication with the IT systems of the retailers.
So we transform this, and what we’re providing right now is a kit, a kit, a smart kit, which encompass the smart panel and the security scale, the security scale. That is one of the layers that we provide to mitigate the inventory shrinkage issues which I’ve mentioned before. This is a kit that you can mount on top of existing carts within a matter of. If you are very well trained, it could take you five minutes. If you are less trained. Let’s say, 15 minutes, 20 minutes, and that’s it, and the cart is ready to go. And this is a game changer. On top of that, it makes the entire logistics of transforming this, installing this, maintaining this, much more streamlined than anything else. It helps us lower the costs Eventually.
If we want to be successful with the customers and the customers, we need to provide a good ROI. So we had to lower the costs, especially when we are in a competitive situation, and it enables our customers to scale up at their own pace. They can start big, they can start small, but they can really scale up because eventually we don’t need as much space as the bulkier carts need. It’s much more modular, it’s much more small. The floor space that is needed is significantly smaller. And, last but not least, now the customer can take the cart outside of the store. So this is really one nice frictionless shopping process, from the moment he steps into the store, takes our cart with the panel, mounts the smart panel, does its shopping check out on the cart and it can leave outside with the cart. So that’s really the bottom line of what we intended to and what we are achieving right now.
Mike Giambattista
Yeah, again, I’m not going to divulge the name of your competitor. Actually, I intentionally forgot it.
Yaniv Zukerman
I can sense who it is Geographically wise.
Mike Giambattista
I can imagine who are these people, but in this case it’s so counterintuitive that they actually have an employee dedicated to showing customers how to use the cart. When you pick it up, there’s somebody who kind of gives you an orientation, and then that person is available and kind of follows the smart carts around to help customers as needed. So on the one hand, great, you’re providing that extra kind of human touch, but ideally you wouldn’t need that. Ideally you’d like to have something that’s so intuitive and so easy to figure out, and when you run into a hiccup, there’s a solution. Right there those people end up dealing with is just the complaints and frustrated customers who are, you know, kind of giving up on their, their expensive solution there.
So, yeah, my experience at NRF and let’s face it, NRF is Disney world for retail technology it’s every shiny object and bell and whistle that you can imagine that’s available right now in the marketplace is there, and it’s pretty amazing. It’s just, you know, it’s really easy to get a shiny object-itis and be taken by the next uh, uh, sparkling item. Um was remarkable to me about, about custom made solution, though, is it’s not that it’s not just this shiny object, it’s actually. I would just call it a very common-sense set of tools that help customers solve common-sense kinds of everyday problems. So I thought it was anything but a shiny object. I’m sorry if that offends anybody on your team, but I think it’s practical On the contrary, that was the intention.
Yeah, I, I was. It was so well executed that, um, when, uh, your CEO was first introducing me to the product, um, I think he wanted to to give me a full demo of how this works, but ultimately he didn’t need to. It was kind of self-evident this is what it is, this is what it does, and that, to me, was pretty remarkable.
Yaniv Zukerman
Yeah, and I think one of the reasons for this is not only the technology, as I mentioned. Basically, Cust2Mate has been established by a group of people, visionary people, but people that are coming from the retail industry, retail technology, industry. The combined experience of the people in the executive team here, but even more than that, is hundreds of years of experience in retail, retail technology. So we really understand retail, we understand our. So we really understand retail, we understand our customers and we understand the customers of our customers, because all of us have been involved in either developing, servicing, delivering marketing solutions to that particular domain. So it’s not about the technology, it’s about a good solution that is intuitive, that makes sense. As you said, it needs to make sense, it needs to make sense operationally, it needs to make sense on the customer experience front and it needs to make sense also financially.
Mike Giambattista
Eventually, uh, if you’re able to talk about some of the things that Cust2Mate is working on right now for the next iteration of the product, because you mentioned this, I think this is a version 3.0. Um, I’m not familiar with with prior versions of this, but, um, you know, how do you make something like this better? Is it just a matter of incremental tweaks and improvements, or is there anything significant coming down the pike?
Yaniv Zuckerman
So there are a few avenues that we are following in order to improve our offering. First and foremost is things that are operational and has to do with scale and our ability to move to a much more significant scale. It has to do a lot with our ability to move to much more significant scale. It has to do a lot with cost reduction, which is a big effort because, as I said, eventually it needs to make sense, also financially, to our customers and cost reduction will help us help them achieve this. And it’s interesting you’ve mentioned our competitors beforehand. If it’s expensive, eventually it won’t become a mainstream solution. So they would have five, ten carts per store at most. But in order to make it significant, a real game changer, you need to have a significant amount of carts at the store, completely agree. Significant amount of cards at the store Completely agree. At least, I think the sweet spot would be about 30, 40% of the cards or 30 or 40% of the transactions at the store that would go through the smart cards. So you need to reduce costs. This is one avenue. The other avenue has to do with the addition of many other value-added services. That makes sense.
Let’s talk about more content, about the different products. Let’s talk about navigation within the store. We can talk about product recommendations. Basically, it’s very simple. We just need to look at most of the services that people are used to when they do their online shopping and just bring it to the physical store, to our cart. So this is the roadmap for us.
Basically, we’re trying to copycat, if you will, the same experience into our carts and add on top of that everything that is particular to the fact that you are physically there. So location-based services, so offers whether it’s advertisements or promotions or coupons that are either location-based or based on the actual activity that you do in real time, right now at the store and makes much more sense because they bring actual value at the right time at the right place. That’s another avenue, and the third avenue is, of course, using the accumulated data to further improve the operations of our customers, of our retailers and their partners, whether they would be advertisers or companies that provide coupons or other types of services, in order to ever improve, optimize the way they offer products, the way they merchandise them, where they put them at the stores. I’ll just give you one example we can track which products are being looked after without finding the product application. If so many people are looking for the same product, it means that they can’t find it, so maybe you can reconsider where to put it at the store.
Mike Giambattista
I’m not saying this is the only parameter, but just one simple example saying this is the only, the only parameter, but that’s just one simple example. The um, the ancillary revenue opportunities seem significant as well, and and what I’m thinking of is and I think you just alluded to it, the you know being able to present messaging sponsored messaging, if you will, uh to customers based on their location within the store, based on their habits as you know them, because I believe that Cust2Mate’s cart solution understands who the customer is. There’s some sort of tie-in with the loyalty program.
Yaniv Zukerman
Through our integration to the point of sale and loyalty uh systems of our retailers. We do not manage their cost, it’s their customers, it’s their data. But we do integrate in order to facilitate both all the loyalty benefits and of course we need to integrate with the point of sale system.
Mike Giambattista
So, via this, yes, of course, so that, so that data is available to users of Cust2Mate to deploy it either for couponing, messaging, promotions, directional guidance, whatever happens to be, as well as the data that’s derived from that. So it seems to me like there’s an awful lot of opportunity for partnerships. I can imagine, um, you know, the CPG world would be vitally interested in this product. Um, I mean, case in point, and I’m sure you know this the retail media networks have exploded. There’s just gobs and gobs of money being moved from other, more traditional digital channels into retail media right now.
It’s not expected to slow down and it seems like custom mate has just opened up a new channel within that ecosystem that could be really, really interesting, depending on how connected the cart really is and you know how well it could say serve ads from a network if that was something you wanted to. But it seems to be wide open there, as long as we’re blue-skying the possibilities. What other things are on the drawing board for ancillary uses?
Yaniv Zukerman
So, as you mentioned, retail media network and, by the way, if you’re free, I’m hiring people for our business development team you just nailed it and said it perfectly. So this is really it could be a game changer to how you do media and how do you do advertisements personalized advertisements at the physical store, because we know what are the existing solutions at the physical stores. You know digital screens, which it’s fine, but it’s not personal, it’s not context driven. It’s very difficult to measure the impact of those campaigns and, again, we provide, as you perfectly said, it’s another channel, it’s another channel for the retail, it’s very similar to the e-commerce channel, but it’s being operated at the physical store, but it’s it’s it’s an additional channel and I think that could be a real game changer, usher in retail media networks in a significant way, in a very effective way, into physical stores.
We can provide triggers and specific data in real time about what’s going on within each and every shopper journey using our carts. Shopper journey using our carts, logging in, paying. Every product added to our carts is being identified and that could trigger something. The location of the cart of the store could trigger a location-based, relevant ad. Think about private labels. Retailers can promote their own labels by using this, presenting the logic If you scan a CPG brand, maybe you can try our own private label substitute and vice versa. So, working with retail media platforms and networks, this is a natural evolution. This is something we are working on and I think that could bring tremendous value both to, as you said, to the CPG brands gaining the satisfactions of the customers, because now they’re not being spammed, they’re getting actually value-adding offers. So larger shopping baskets, but also additional revenue streams coming from the advertisers, which are very profitable.
Mike Giambattista
What strikes me most about the possibilities here is how uniquely relevant the messaging could be. And again, I haven’t seen this function on Cust2Mate’s product actively, but I can imagine that if once plugged in operational, into the right retail media networks, that you could be serving up things that are I would just call hyper relevant, because it’s no longer I mean you. You’ve literally dialed it back to, uh, the most immediate uh that you could derive from a shopping experience, and those could all be triggers for some sort of messaging. So I think it’s wild Really looking forward to seeing if that’s live now. I’d love to see a demo. If it’s not live, I want to be around when it becomes live.
Yaniv Zukerman
Some aspects of this are already live. We have already been using this with some of our customers with our own platform, helping them to manage their own campaigns of advertisements and offers of promotions and discounts, and they have been selling this already those ad real estate to their CPG partners and gaining additional income sources due to that. But I think eventually this is something that in order to really maximize the potential there, we’ll need kind of a triangular partnership between, of course, our capabilities, our retail customers and their retail media network operators and technology providers. That would really nail it and maximize the overall potential there.
Mike Giambattista
Yeah, again, I’ll just say, as it becomes real, I want to put my foot in the door there and at least observe what’s going on, because I think it’s the potentials just wild. Uh, again, anecdotally, I was, uh, a colleague of mine. Uh, lives and breathes retail media. This is his passion, and you know what he lives for. Um, but uh, we were in a conversation recently and he was telling me about how so much of CPG advertising and marketing spend was based on traditional co-op kinds of arrangements. You know, sell this much, we’ll give you this much. That kind of a thing, that equation with all of its nuances. You know, sell this much, we’ll give you this much. That kind of a thing, that equation with all of its nuances. But that as soon as retail media networks started to become a thing, as soon as CPGs started to recognize the real potential there, that those co-op arrangements went out the window so fast and they’d been entrenched you know, think about it for decades.
This is just the way it worked for the longest time and suddenly you know there’s a whole new set of rules to play by, because there’s all new potential at hand.
Mike Giambattista
So you mentioned at the beginning of this conversation that one of the great benefits to CustomMate’s technology is its ability to help retailers manage shrinkage. Can you just talk about that a little bit?
Yaniv Zukerman
Sure. So, as I mentioned, this is shrinkage. Retail shrinkage right now is at all times high in the United States, but elsewhere as well, and there are a lot of existing technologies and solutions being used by retailers. Most of them are, let’s say, ineffective.
Mike Giambattista
Yeah, you’re being kind, but yes, let’s say ineffective.
Yaniv Zukerman
Yeah, let’s say ineffective. I wouldn’t use any harsher words Locking up stuff. Listen, if you want to sell stuff, you can’t put it behind a glass lock or a cage, or sell a laminate board instead of your fancy gadget, or put it behind a self-service counter. It’s not working. And if it’s working, you might protect the products, but you lose the customer, patience and time and eventually the sale and in most cases, you don’t even protect the products. Eventually, the sale and in most cases, you don’t even protect the products.
Other technological solutions can do a better job to identify patterns and identify them, but a lot of them, at least, are perceived as intrusive, has a lot of privacy issues because eventually you monitor the customers and customers don’t like to be monitored. So if I’m a customer visiting a store and I see everything is locked up and I’m being covered by dozens of cameras, so why should I get into your store? I would order online. If I’m ordering online, it’s not necessarily would be with your online. It could be with your competitors’ online e-commerce site. So they’re in the cusp of losing significant market share, and only by this fact. So we understand that, in order to face this, it can’t come at the expense of customer experience. So, first, customer experience is the key and while maximizing customer experience, we need to make sure that as much as possible we mitigate shrinkage. And first and foremost, we need to mitigate unintentional errors, which are a big chunk of shrinkage eventually. A big chunk of shrinkage eventually other autonomous types of checkouts is just unintentional mistakes of you missed, you forgot to scan something, you forgot to put it back. Those errors accumulate to a lot of dollars eventually. So if you do it along the way, when you do your shopping with the cart and the cart makes sure that everything that you scan is being put into the cart and the right product is being put into the cart, and eventually you pay for everything that you’ve been putting into the cart. So you’re not. We can’t help them eliminate the problem altogether, but we can really mitigate it and minimize it, certainly taking away the unintentional errors and also deter intentional errors from people who are trying to steal.
We are doing this by using different types of technologies, fusing different types of technologies. That has to do with the identification of the products and validation of the products that are being scanned and put into the cart. First, barcode scanner that you scan each product and then you place it in the cart. A security scale that is being mounted at the bottom of the cart and make sure that the weight is right. It corresponds to the product that you’ve just placed inside A camera with a computer vision and analytics software that can scan and identify the products, especially the ones that are more prone to being stolen.
An RFID reader that can read products that are being guarded, protected with RFID tags and this is something that, over time, I believe would be much more prevalent. And, last and last list, an overall software that runs analytics on the activities that are are going on throughout the journey and identifies and flags anomalies, suspicious activities that can be predefined or being understood over time, and that is being getting the employee or the guy that is responsible for this at the store is getting those flags, is getting notifications and he can go to the cart and see what’s going on and mitigate and resolve the issue. So this is our approach and it’s seamless. Again, it’s part of the shopping journey and we are sensing the products, we’re sensing the activities, we’re not sensing the shoppers.
Mike Giambattista
Aidan McCullen it’s a brilliant solution. Are you at liberty to say where you are currently being deployed in the United States?
Yaniv Zukerman
So currently we are deployed in the United States in an East Coast nice retail chain called Morton Williams. They have been one of our dearest customers, one of our earliest and dearest customers there, about doing pilots with some other customers, retail chains different sizes, both in the United States, in Mexico, in other countries in the Americas, currently more specifically in Central America and Latin America. We can’t really disclose at this point names, but we have a very nice and robust pipeline.
Mike Giambattista
I love hearing it. Not only in America by the way, We’ll check back in in a future conversation to talk about the retail media network component of this, to talk about your marketplace successes and then also to talk about what version 4.0 of the smart cart was going to look like.
A link to the podcast: https://thecustomer.net/shopping-reinvented-the-data-driven-smart-cart-revolution-is-here/
