EP 153 - How are retail brands adopting IoT to engage consumers - Cameron Worth, CEO & Co-founder, SharpEnd
|Nov 21, 2022|
In this talk, we discussed using QR codes, NFC, and augmented reality to drive consumer engagement and generate market insights. We also explored the challenges involved in rolling out large scale IoT campaigns that involve millions of products, thousands of sales points, and dozens of countries.
Erik: Cameron, thanks for joining us on the podcast today.
Cameron: Thank you very much for your invitation, Erik.
Erik: Yeah, I'm really looking forward to this, because we are two IoT agencies that are, I think, approaching the field from quite different angles. I'm interested in hearing and exploring which parts of our businesses are similar and which parts are different. I think the natural difference here is going to be just the types of customers that we're working with. So, maybe that's a good jump off point. It's to understand what in your background led you — I think, at a relatively young age, right? What were you? Probably mid 20s, at that time — to establish your own agency focused on a fairly new technology domain.
Cameron: Yeah, I was in a pub in London called The Old Bull and Bush. I saw someone scanning a QR code on a beer mat. I had literally no idea what just happened. But I was like, whatever that was, I think that's going to be the thing that people are doing more and more over the next 10 years.
For me, I was completely — I mean, this sounds like you make up your backstory to align with your business. I was genuinely, really, really captivated by the idea that the phone had been used to go from a physical object to an online experience. Even though it was a bare beer mat, and I couldn't really understand the application, I was thinking, "Well, why isn't that going to be on everything? Why can't you bridge to an online destination from any physical object?" That was really what started my fascination with the IoT. I didn't know it was the IoT at that point.
A few jobs later, I'd worked software side. I'd worked on the creative side. I was working in the mobile team of a big advertising network called the Engine Group. I wanted to put those two things together. Because in the few years since I'd seen that QR code being scanned, I hadn't really seen many use cases of brands adopting these technologies. I was genuinely just committed to trying to do my best to help it scale.
I packed in a well-paying job which was pretty cushty — with long lunch hours and all that stuff — and then just looked to the space and said, "Actually, I think the solution right now that brands need, rather than technology, is creativity and strategic consulting." So, I set up SharpEnd as the world's first Internet of Things agency. I was thinking about it very much from a marketing perspective. I always have, looking at it as an engagement opportunity, rather than what I think a lot of people do when they talk about the IoT. It's think more about the Industrial Internet Industry 4.0, supply chain optimizations, and all that kind of stuff. I think more about vodka bottles that give you recipes, and moisturizers that tell you how to use them properly and stuff. So, I come at things much more from the marketing end of the spectrum. There's a lot more people in the more industrial side.
Erik: Yeah, the industrial side, I think I had a very similar backstory. I was doing a very traditional management consulting. I think we were doing some terrible project. We're trying to reduce OpEx by $100 million, which in that case meant firing a bunch of people and determining who to tag for layoffs, basically. Again, well-paid but really terrible work. Then we encountered this technology that they were just starting to use in the factory and light bulbs got in — well, that looks like a much more interesting and harder need to set of challenges to understand, a way to chart my future as opposed to this.
When you first set up the company, it sounds like you were somehow inspired by the prospect there. Were you basically an individual that said, I'm going to set up an agency and just try to hustle my first customers? Did you already have customers off the gate? Did you have one or two other partners to support you in the setup?
Cameron: No, I was working. I decided to set up the agency. So, the agency was built on the philosophy that — originally, having come from Engine Group, I still am in love with the advertising industry. I think it's the most powerful industry in the world. I think if you can make it in advertising, then you've straddled business of creativity, applied creativity, all of these kinds of things — which are all the areas that I'm interested in. So, I really wanted to make it in advertising. That's what I've always wanted to do.
That said, it was very easy for me to set up an agency because there's no requirement to set up an agency apart from just being a pretty smart person, start to go to clients and say, "Hey, I think this could be really interesting for you. Would you like to work together?" It just so happened that Absolut Vodka was our first client. So, we flew to Sweden. We met the global team. Two particular names I'll always be really grateful to — Avanzon and Markus for allowing me the faith to explore it.
At the time, Absolut was producing 125 million bottles of vodka a year. The rationale was, "Hey, let's work together. Let's think about putting a digital trigger onto these bottles. Then you've got 125 million new engagement channels directly with your customers." So, that was the pitch. Everything makes sense about doing connected products, in my opinion. Because it doesn't really cost you too much. It gets you so much upside — customer data engagement, media value, et cetera. So, that was the agency bid. When you start with Absolut Vodka, it's quite easy to get the second client. Because people generally look at who Absolut Vodka works with and tries to emulate.
So, we had a really, really good couple of years. It went from me to 3 people, to 5 people, to 10 people, to 15. Settled a little bit probably between the 15-to-17-person mark. Then I realized, as we started to scale our projects, by that time we're working with PepsiCo. We're working with Beiersdorf. We're working with Nike. We're working with Nestlé, Pernod Ricard at that point. So, we've gone from Absolut across to Malibu, then up into Pernod Ricard. Then we were appointed as their first ever IoT agency of record, which is a big milestone.
Then I realize that actually the agency bid was the easy bid. The hard bid was scaling it. So, what we did is we went to all of the platforms. We were like, "Hey, we want to go from 50,000 products to 500,000, to 5 million, to 50 million." The IoT platforms were still very much in that 'hammer looking for a nail' mindset. If you're an AR company, you're telling every company in the world they need an augmented reality. If you're an IoT platform that does QR code management or something, you're telling every brand in the world they need QR codes. If you're an NFC tag manufacturer, you're telling everyone they need NFC. So, we weren't really finding.
The tech vendors could do one of two things. One is, be horizontal. They all seem to be backing a certain technology. The second one was that they couldn't really speak, market their brand language. So, it was very, very difficult for us to engage the right platform. We were like, "Well, we know what the platforms need to do because we've got all of the world's biggest brands using us, and defining the use cases alongside them. Why don't we build our own platform?"
So, we built our own platform, which is very much now — I think two years after launching, it's very much an industry standard now. If you want to generate, secure scalable compliant IDs for connected products — NFC, QR, augmented reality, et cetera — a lot of the world's biggest brand owners are now using the platform that we develop.
So, we've pivoted from being a creative partner into being a SaaS solutions provider to the same customers, which is a very interesting model, and not one that we're too familiar with that anyone else has been able to replicate. Going from a straight creative business that builds on time and materials to then now being a software solutions partner that has one- to three-year license agreements with 30 seats across 130 countries. We've got billions of touch points and 100% platform uptime and all this kind of stuff.
We're very much now putting ourselves out there as an integrated solutions partner. We're about 40 people now. But I think I lost track of the business, about 20 people ago. But yeah, we're definitely a lot bigger than we were before we built the platform — full-time engineering team, team in New York. We're closing a big investment around now to help us scale into new regions. So, it's just a really nice time to be a part of the IoT space. Especially, since COVID, that changed a lot of these behaviors around how people engage with physical stuff.
Erik: Yeah, I agree. Great timing. I think you really hit the timing correct. I've probably interviewed 150 technology companies on the podcast over the past few years. The vast, vast majority really came from a tech background. Like you said, we have a great technology. Often, relatively horizontal technology. Sometimes vertical but still typically coming from the tech background. So, I think, coming from the industry perspective, really understanding the customer needs is a great starting point. Let's discuss those a bit. I think NFC, QR codes here in Asia, certainly, people understand what you're talking about. But there's probably a broader set of solutions that you might be working with. So, what does the landscape look like today in terms of IoT applications for retailers?
Cameron: I'm going back to my pauses for thought. Like I said to you before we started, I don't read questions before podcasts or panels and stuff. So, I do like to think about my answers. I think the main thing for us is that building connected brands is a creative challenge and not a technical one. I think that's how we've always started.
So, whether you end up with a software license agreement to our platform called the io.tt, the thing we always make sure is that SharpEnd, as a creative and a strategic partner, is doing the upfront work to help you find out what's the right experience, who's your audience? Based on that audience, what's the right technology? How do you integrate it onto your product? There’s all of this stuff that we do upfront, which other people just don't do.
I think going back to your thing about the technical solutions, if you sell the technical solution to a customer — which is great. Congratulations — getting it from we've now bought the technology through to we now got it live in market, there's a lot of things that need to happen at that point. If you go tech first, it's quite difficult. But if you go creative and strategic first, and you've always got an anchor point to why you're doing these programs in the first place, we've just found it to be a more efficient way forward.
In terms of the technologies that we're looking to back, I think, as it were, I think we've got — from a retail perspective, we're seeing a lot more touch points being deployed in retail across the standard technologies. QR code touch points, for example. Estee Lauder companies using QR codes in all of their stores and all of their doors, which are generally where they're selling their products within someone else's retail space.
Linking through to things like virtual try-on, I think one of the insights is with lipstick. For example, after you've tried four lipsticks, it's very difficult to know what the fifth one looks like because your lips are stained. So, Virtual Try-On allows you to have an unlimited testing moment in store. The work that Levi's are doing right now to being able to use NFC in their stores, to be able to link people to, "Okay. We haven't got this in your size here. But if you tap this NFC touchpoint, we'll be able to tell you if we have it in the back room, or if we have it in a store nearby." So, there's a blend of inventory management with customer engagement through NFC.
AR, augmented reality, for me, it's very difficult to find the scale opportunities within augmented reality. In terms of QR and NFC touchpoints, you just update the digital experience whenever you want to. There's less front-end cost because you're working with less comprehensive packages, but doing things like augmented reality, installations for pop ups. If someone like John Lewis, for example, which is a retailer, they'll be communicating a lot of Levi's as what are these initiatives through AR. It just gives you a bit of a shareable moment, a bit of a stun in store.
But in terms of meaningful methods of bridging people from offline to online, there's nothing better than QR codes and NFC right now. I'm sure you remember, Erik, the impending takeover of beacons about four years ago. I don't really hear those being spoken about too much anymore. For me, it's like what are the things that were there at the beginning, and what are the things that are still there? That guides you to what are going to be the right choices to make for at least the next couple of years anyway.
Erik: Yeah, it does seem to be simplicity wins the day more often than not when it comes to IoT solutions, despite the fact that there's a lot of other solutions that might be superior in some metric. But at the end of the day, being able to, like you said, roll something out in mass across multiple countries and thousands of endpoints, that's a technical challenge.
Let's talk a little bit about then the value that the brands are looking for, and the value that the customers are looking for. You already touched on a couple of those in the examples that you gave. They were quite different, right? One is inventory management. The other is a user experience that's quite unique to two people testing lipstick. The color sticks. Then after you do it two or three times, you don't really have a pure color anymore. We already have two very distinct use cases.
One of the interesting things, I think, with IoT is that there's this tremendously long tail of use cases that might be very high value for specific companies and specific scenarios. But I imagine there's also a short list of use cases that you basically talk to many of your customers about. What would be the shortlist for you of the things that every brand should be at least considering?
Cameron: It's a great question. I'm really glad you asked it in the way that you did as well. Because there's something that I just feel. It's such an unfair advantage to working with or at SharpEnd as well, which is we work with Balmain. We work with Pepsi. We work with Campari. We work with Estee Lauder companies. All of the brands actually have the same problems. But I will talk about them slightly differently in my opinion, anyway, which is, how do we learn more about who buys and uses my products?
So, how do I learn about who buys and uses my products? How do I engage and convert a point of sale? How do I build new ecosystems around my customers? Those three things. Generally, if you change the language and you make it more high end for luxury, more promotional for CPG, generally, you end up with those three use cases. That, for me, is exactly what connected products are there to do, which is get you direct to your customer so I can now understand who's engaging with my products. I can deliver an experience that captures their first party data. So, I can now start to understand who that person actually is. I can start to understand their preferences. I can then start to deliver more meaningful engagement, a point of sale. Not even just through connected products, but also connected retail experiences.
We've got interactive surfaces live in global travel retail. We've got image recognition driven from QR codes, retailers that want to get the brand in hand moment. I mean, there are so many different ways you can talk about expressions of IoT in retail and product. But generally, I think those three problem statements or opportunity areas are the ones that we always look out for. I truly believe that if you just still — most of the conversations down, they end up in one, two, or three of those statements.
Erik: Okay. What about from the customer perspective? I mean, the end user in this case, the end consumer. Do you think they're even conscious that they're using a new technology? I guess, I'm just thinking from my perspective here. I use QR codes all the time. It's unconscious. If you ask me what other IoT technologies are you encountering in the products, even though I'm in the industry, I really couldn't answer you right now.
There are probably things I bumped into all the time, and I don't process them. How do you think the end consumer — is there a learning journey that sometimes they need to go through, and you need to figure out how to educate them how to use a new technology? Where are we on the user experience today?
Cameron: So, there's a couple of things. I would say I do believe that SharpEnd — if you look at the record and the history of the work that we've done with brands to deploy QR codes, NFC tags, and all that stuff — I feel like we've done more than almost anyone to get these technologies into the mainstream outside of, of course, the progress that was happening in Asia.
Because I always look back to — maybe you can empathize. I look back to a world maybe even like nearly 10 years ago now when QR codes went through their first proliferation. But the thing is, the brands and the people who were actually deploying these QR codes weren't giving a shit about the experience. I remember scanning QR codes and then going through to desktop landing pages on my mobile. I remember dead links. I remember QR codes that were too small to scan. Do you remember all of these things that happened 10 years ago? Everyone was like, "QR codes are shit." Do you remember? Then they just died out. Everyone was like, "Okay. Well—"
Then there was probably maybe only four people globally left going, "I still think there's an opportunity for QR codes to deliver value to people." That's really, I think, what me, as the founder and CEO of SharpEnd was. I was one of those people that said, "Look, I get it. I understand that the first go wasn't particularly successful. But I understand why."
What I'm trying to do now is take a different approach and say to customers, "Look, the technologies are the same, but the experience needs to be better." At the time, they were, let's say, reintroduced in apostrophes to society. I'm very much talking about the US and the UK at this point in time. When they reintroduced, Absolut was delivering new cool stuff through their products, or Malibu was helping you get the most out of summer, or Nivea was telling you how to make the most out of their skincare products, all of these different things. The customers are actually going, "Shit. I remember scanning this before, and it was rubbish. But I'm now getting something really meaningful."
So, changing the customer's psychology around what these things actually do in the first place was step number one. Step number two was to wait, I think, for the technology and the OEMs to mature and to be able to — things like I remember jumping my ass off when the smartphone operator started to make the QR codes scannable through the camera. Because that was one of the biggest barriers, which is moving it. From having to download a QR reader app, which is super nerdy, to then just being able to launch your camera and scan the same QR code. So, that was a big turning point.
Next thing that happened was, of course, COVID. The ability to go into all. The idea that we went into lockdown and was thinking, well, what is the thing that's going to change people's behavior around this particular technology? Because we're still only talking about QR codes at this point. We went into lockdown. I didn't realize or didn't think what else could I be doing. Because I'd already worked with the world's biggest brands. I'd already done cool stuff through their products, and they still wasn't catching on as a scale opportunity brands. We're still having it within the innovation mindset. Let's try it. Let's see. I worked pretty nicely. What else can we be doing?
Then coming out of lockdown and seeing that there were QR codes on barbershop windows, restaurant tables, florists, all this kind of stuff. Then it was just like, well, something happened in the last couple of weeks. I'm not quite sure what it is. But we need to scale up. That's really what happened from a QR code perspective. Then now we are where we are. Everyone knows what QR codes do. They're seeing them on every single product.
One of the intelligent things that I came up with a few days ago was that QR codes are now firmly part of the world's visual language. So, you see QR codes pretty much in every store. In any shelf that you look at, there'll be at least one product that has a QR code. If you look at print advertising, it's got a QR. It's just not surprising to see QR codes everywhere now, which it was a couple of years ago was quite interesting.
The other technology that I think is really emerging in a way, although it's performing fantastically for client campaigns, is near-field communications, NFC. NFC is generally what we're using for advocating for higher price point items — cosmetics, fashion, handbags, et cetera. Because it gives you just a more premium experience. It's not as visually interruptive as a QR code. Because in some creative teams in these cosmetics businesses, QR codes just wouldn't fly.
So, we've been working very, very hard with tag manufacturers, everyone else within the supply chain, emblem providers and stuff like that to make sure that we've got integrated NFC solutions ready to go to market. The next thing after that is the tags in the product. How do you let people know? At least, a QR code is a visual call to action, right? It looks like a QR code behaves like a QR code. NFC tag is — when done properly —completely invisible. So, what we've been working with brands is creating domains where you can go to things like tap.io.tt. You can see exactly how to use NFC, which handsets does it come on, where's the reader. So, you really guide people through that interaction process.
Actually, what we see now on the back end, from the io.tt side, is that people who use NFC are more likely to keep using NFC. We find that QR code scanners are much more likely to do one or two engagements a month, where NFC users might be doing five or six. So, that's a really interesting learning from us, which is getting people within. the NFC ecosystem. It keeps them there. QR codes, I think, is based on just paradox of choice. Because they're everywhere, they're more likely to scan less products.
Erik: Okay. That's an interesting way of thinking about it. I'm here in the China bubble, and QR codes are just such a part of the landscape. You use them every day for everything. It becomes very subconscious. There's obviously a huge advantage of the fact that they're, more or less, free. It's a printed image. It can be a digital image. But it's just an image. And so, it's easy to modify, easy to put in any form, factor.
It's interesting the way that you described the difference between QR and NFC, as NFC being a more premium experience. QR, I would say, is basically free minus whether it's the labor cost of distributing them. For NFC, where's the cost point right now for, I guess, on the one hand, the hardware and the other hand, the software integration? Any setup required to deploy this?
Cameron: Yes, so, the hardware is already there. It's in people's devices already — iPhones, Androids, et cetera.
Erik: That means you'd also need to deploy that in a bottle or whatever product that you—
Cameron: Precisely, yes. I was just thinking from the customer side, the hardware is already set. From a tag perspective, I mean, we work very, very closely with the likes of NXP, Smart Track, Identiv, all of who we consider to be like the industry pioneers who can work with us on trying to reduce the cost down. There's always a rogue NFC supplier who says, "Actually, we've got a $0.2 or $0.3 NFC tag, but it never quite comes to fruition." Everyone just keeps waiting, and it slows down the market because everyone's waiting.
What we generally do is we generally work with a rule of thumb that an NFC tag is going to be between $0.10 and $0.15 for an order quantity under 500,000. We give that as a cost scenario. Then we're either pleasantly or unpleasantly surprised at the final cost. But just having a flag in the ground there is generally what we try and do. Then we can always refine it as we go depending on how complex it is to integrate.
If you're someone like Levi's and you're putting an NFC tag into the back patch, then of course, there's production processes that you're going to need to test — how many washes does it stand, and all this kind of stuff. So, very much depending on the brand, on the use case, on the product, you're going to have more or less complexity.
Clinique, for example, we're working directly with the packaging team. We were producing a base label that was NFC-enabled, where we'd be able to print the call to action of visiting tap.io.tt. but also carry the NFC tag as well. Because it had a slight — my language is running out when I get deeper and deeper into technicalities. But because there's a bit of a gap between the base and the actual table on the surface, it means the NFC antenna isn't going to get smashed every time they put the product down as well. So, just having those kinds of considerations make quite a difference as well.
But generally, like I said, you're not going to find a Pepsi can with an NFC tag on anytime soon. But you will see more and more beauty, fashion, and luxury products coming to market with NFC because everyone wants to have a direct customer relationship.
Erik: Do you see companies moving into lifecycle management? My wife is always talking to me about the secondhand marketplace for some of these luxury brands. It's pretty wild. I guess in some cases, the value even grows just because of scarcity. But I can imagine that there's now a lot of growing use cases for lifecycle management. But then, of course, the NFC tag has to survive for that lifecycle. I guess, the other part of that would be just tracking this through the supply chain. So, if there's a quality issue, you can hopefully trace that back and not have to do a big recall. How are you seeing this deployed in the lifecycle of a product?
Cameron: Yeah, it's a great question. It's actually something we've spent a long time thinking about. What we came to the understanding in terms of our own understanding, is that the world doesn't need yet another bite at the apple of an IoT platform and apostrophes that says they can do everything for everyone. So, we were in that process of going, "Well, should we do traceability? Should we do supply chain transparency? Should we do all of this anti-counterfeit and stuff like that?" I mean, we've got authentication modules on the platform. But what we did instead is we looked around and said, "Actually, who's doing supply chain better than we ever could?"
Actually, I think the language is now calling it 'product clouds.' A lot of people are now calling themselves product clouds. But what we want to try and do now is find that right partner who we can integrate with. Because, ultimately, when you talk about connected products, or retail, or any of the other ways that we can have this discussion, what you really come down to is identity management — which is every physical product having an identity in the cloud.
So, what we want to do now is we want to find the right partner — that's me pretending that we haven't found the right partner, and we're just waiting to announce it — where we can deeply, deeply integrate the platforms. The person who is generating that master ID is then tracking it through the supply chain to give the brands that level of intelligence. Then as soon as that product goes into the store and as soon as it's picked up by the customer, that identity then changes into a customer facing experience which is designed, built, and managed by the io.tt platform.
What you've got at that point is you've got best in class supply chain and engagements/experience within the same platform — which for us is a much more friendly way to work in terms of joining together in the ecosystem rather than everyone just taking yet more funding to build out yet more modules, when actually the best thing to do would just be to do some integrations. So, yeah, absolutely. I think the next thing, once you've got an identity on a product, is then to start think where else can this benefit the wider business. Because I think you always need to make sure that connected products are delivering on business and brand objectives. What we've done up until now to validate the opportunities, work on brand objectives. What we're now looking at doing is incorporating more and more business objectives into that.
Erik: Yeah, I love that approach. I was chatting with a guest on the podcast a few weeks ago. They built a Lego brick approach to building AI applications, where they took a bunch of startups that had good functionality, and they built some middleware to tie them all together. Then they just distribute revenue based on what functionality is used.
I thought that's a beautiful approach. Because most people are just going to say, "Let's backwards engineer that, and build some B-grade software that basically does the job. But then, like you said, you're just spending venture capital, emulating what somebody else has done. It's going to be much healthier for the industry if people focus, do things really excellently, and then partner.
Cameron: Absolutely. The thing is, the early days of the IoT was horrendous, right? It was full of well-funded charlatans. That's the way that I'd put it. Everyone was saying, "We can do everything for everyone." So, they were just in a bit of a land grab exercise, saying, "No, you have to stay with us. You have to work with us across everything." Then they were farming out agency briefs to agencies, tech briefs to tech platforms. No one was actually moving forward for the first couple of years. We were very much — I think maybe we still are, to a certain extent, a bit of a prior in the industry. Because we're the ones who have been calling people out for the last seven years and saying, "Look, yes, we've done a bunch of empty partnerships. But where's the case studies? Who's actually rolling this stuff out?" Because, at the same time, everyone has been slowing down the market. They've been slowing down adoption of these technologies.
You've seen what's happened with COVID. It's no coincidence that brands are embracing these technologies more than ever. I'm not saying they're all working with SharpEnd. But it's also, at the same time, where a lot of those previous players are running out of steam or even exited the market completely. There's a well-documented timeline of a certain few partners that had said, "We're going to have a $0.1 tag." What they do is they raise shitloads of money. They go and just hire a massive sales team. They say to every single customer in the world, "Why are you going to spend $0.10 with Smart Tag? We'll give it to you for $0.1 in the next 12 months." Then all the companies say, "No, we're going to slow down. We're going to wait for these guys." Those guys never come to market. Do you see what I mean? So, stuff like that happen quite a lot.
The same thing with platforms, as well. People are saying, We have to use our platform, because we're the only one in the market." Then we'll just slow down adoption. At the same time, for the first five years, we were privately funded. So, I wasn't taking a salary for maybe three years of SharpEnd's early story. Then we took a little bit of funding to build out our platform. Nothing outrageous. We feel that we've done things very honestly. I think there's a few people in the IoT space that haven't been particularly honest. I think those people have now run out of steam entirely. Now it's a good time to start really trying to think about how to create a more friendly ecosystem. Because it wasn't particularly friendly before, because it was full of very competitive people. Because they were having to justify a lot of investment to a lot of investors.
Erik: Well, it's a dip in the venture capital markets and the general capital markets. It's often healthy for a new industry, right? Because it forces everybody to focus on making revenue, making profit.
Cameron: I think it's just being nice. Being nice people, I think, is the main thing and making sure that we enjoy what we're doing. You've been in the space for a long time. I've been in the space for a long time. I'm so proud and satisfied of where we're up to right now, which is the brands have moved from us having these weird niche events in strange parts of dodgy countries in Europe to now being a part of the main stage conversations about this is a big thing, and this is a big unlock.
There are 8 billion people in the world, and there are 7 to 10 trillion consumer products made every single year. I think people are starting to really understand the shape and size of this opportunity and really starting to get behind it. A lot of the people who have been in it from the beginning should feel very proud of themselves that they backed the right horse.
Erik: Well, there's another angle of complexity here, which is the geographic angle, right? Even if you're focused on one domain and doing that at a high level, you're working with customers. You're working with Levi's. They sell clothing around the world. Even if you were saying we're going to focus on the UK market, well, some consumer buys that. Then they move to Japan, they move to India, they move to South America. So, the product itself is going to migrate.
Where are we today in these technologies on global standards? Are they able to develop one solution and roll that out around the world? Are they doing this regionally? How do they manage geographic complexity? Is this even an issue that needs to be deeply considered today?
Cameron: I am going to answer it in a very, very straightforward manner, which is GDPR and CCPA compliance wiped out a couple of IoT players immediately because their platforms were just not set up to handle PII very intelligently. So, that's the first stage of compliance. You need to make sure that GDPR and CCPA is baked in.
The second thing is data management — understanding that you're able to process customer data on the brand's behalf. So, that's another part of it. From a technology standards perspective, the QR code is the QR code. I'm just making sure that it goes to an ID that isn't going to be able to be showing something funky if you scan it in one country versus the other. NFC tags, as well. Because it's a hidden and locked URL, it's got a generally less chance of being abused and better for things like authentication.
From a standard's perspective, IoT is very much becoming a thing. Therefore, connected products is also becoming a thing. Connected product platforms are now becoming a key consideration. Someone like us who's built their platform for enterprise brand owners is in a really good position, because we design everything around scalability, security, and compliance. Those are the three things that you need. Once the innovation guy or girl has done their job and said, "Hey, we're going to be rolling out QR codes or NFC," eventually, there's going to be someone from procurement, from IT, from legal who pops up and says, "Hang on a second. Who are these people over there? We need to run them through the processes." Just making sure it can fly through that from an enterprise evaluation is pretty critical.
The thing that I would say that is becoming a very key discussion topic is privacy. So, if you're needing to put privacy policies between the QR code scan and the end experience, being able to have that language ready to go and off the shelf is very, very important. Because that does change per market. But generally, the problems are the same. It's just making a couple of tweaks to your overall proposition that allows you to get to scale out very quickly.
Erik: Yeah, you're right. GDPR has been useful in terms of entering, just very, very directly setting the standard that other countries, to some extent, or brands basically have adopted as a global standard to some degree. Let's talk a bit about who you're working with. You've mentioned the brands. So, we don't need to go there. From an individual perspective, I think you mentioned that maybe early days, you were working more with innovation teams. I've got to imagine there's a lot of people that have a say in this. There's marketing. There's IT. There's also manufacturing if you're trying to deploy, if you're trying to insert a chip in a production line. Who's the buyer? Who's writing the check? Who's influencing? Who has a voice at the table here?
Cameron: I wish there was a standard answer for you. Generally, we find that from an experience and an execution perspective, it works within digital and brand. But to be able to get these programs to market, you need operations, legal, IT more so, and just being able to have a —
I think also just going back to that. Because, again, I'm answering in real time as opposed to reading from a notebook. The brands have to be able to trust someone like SharpEnd to answer the questions that they're not asking, and be able to bring those questions to the table. Have you thought about activating this in retail? Have you thought about training your brand ambassadors or training your store staff to be able to speak about the technology? "Oh, nice. I've never thought about that. What would you suggest?" Well, we can create like a retail activation toolkit, do a training session with a couple of your key regional leads that will then allow the message to get down into your store stuff. Just things like that, it's the things that people aren't thinking about at the beginning. The further these programs go, our job is really to make sure that they're able to have a trusted partner.
I think the other key ingredient to SharpEnd as an agency, rather than the platform which is io.tt, is that every single person who sits as a client lead in our businesses is expert. So, we haven't taken people from agencies. We've taken people from Pernod Ricard, from Revlon, from Campari group. So, the ability for the brands to have a brand manager next to them who's actually in-house in our agency gives them a lot of comfort. That's probably one of our things as well. It's almost having someone in house, who feels like an in-house person, within our building makes a big difference.
Erik: Yeah, it makes sense. Well, you mentioned that you're raising some money now. I think we've already talked a lot about the earlier years, and about the COVID years and the ramp up there. If you look forward three years, five years in the future, what's on your product roadmap now? What are you excited about in the coming decade?
Cameron: I'm excited about looking forward, to be honest with you, if I can answer it without having to wipe a solitary tear. But I think the idea, like I said, we took the hard path. We created the first IoT agency eight years ago. At that point, you're privately funded. You're growing very slowly, very organically. We took a couple of million quid to build out the platform, but by no means have we ever been overfunded or had two- or three-years runway as it were.
So, what I'm really looking forward to doing now that we validated product market fit, generate good revenues, work with amazing brands, have a clear roadmap for scale, is just to raise the right amount of funding that just allows us to look forward and not have to do three monthly cash flow forecast and all that kind of stuff that you need to do as a bit of a hustler in the industry.
I think the other things that really interests me over the next 10 years are moving from what is the IoT to let's give it a try, to we've now scaled it across the business, to what do we now do with the data. Because if you think, like I said, there are 7 to 10 trillion consumer products that are made every year. If even 10% of those are activated, then that is a huge new unlock for data and insights for these brands. I think doing something meaningful with that data is going to be one of the next big unlocks. We're thinking about that already. That's what I'm very, very excited about.
I think, generally, just want to understand what the ecosystem might look like. I think that we've really had to focus on creating an industry to build a business. I feel like we've done our part. You've done yours. There are other people around us that have helped to create this industry. I'm just really interested to see what businesses occupy this new space in the next five to seven years.
Erik: Yeah, it sounds like you're very much focused on NFC and QR for good reason. There's a few other technologies that are starting to get much broader adoption in the IoT space. I don't know to what extent they actually are. I mean, these are more device technology — things like NB-IoT, LTE-M, just 5G in general, in terms of enabling new experiences. Are these things that you could imagine being integrated into your platform in the coming years? Or right now, do you do see those as being for the product categories that you're working on not particularly relevant?
Cameron: Well, it's definitely not about relevance. It's more, for me, I think less about the devices and more about the customers. Like, what a customer is using, and how can we create new touch points for them to engage with? That's why we've settled an NFC and QR over the past couple of years with a bit of augmented reality, a bit of image recognition.
What we're now looking at is, well, what would devices that have persistent communication with the io.tt platform look like? Like I said, Erik, I go back to the beacons thing. Do you remember when everyone was pivoting towards beacons and doing beacon integrations and speaking to — I think it was Estimote. Do you remember that name?
Erik: No, I'm drawing a blank there.
Cameron: Estimote was the big beacons company. Everyone was speaking to them about, how do we integrate you into the platform and stuff like that? What we'll always try and be do is be guided by the use cases. What are the brands doing? How do we make their lives easier? Is there a customer engagement opportunity? I think that will always be our filter. Because I think there's going to be much better, smarter, more technical people who can think about the other types of IoT applications and how to integrate those. Then we can always follow their lead.
Because I don't want to be the IoT generalist who knows everything about every particular field. Because at that point, you don't know much about anything. I think from our side, we just really want to be the thought leaders and the industry pioneers of QR codes and NFC integrated into products, delivering good experiences, and giving brands new data and insights. I think we've got the opportunity to build a really successful company just focusing on that for at least the next couple of years.
Erik: Yeah, great. Well, there's maybe one more topic you just brought up here that we should touch on, which is this topic of analytics and insights. I think we've been talking a lot about engagement so far, but not so much about then. What are brands doing with the data? I think you've already touched on the privacy issues. Maybe we don't need to go too deep there. But when it comes to analytics and insight, what do you have on the platform? Are you working with partners? Then how are brands using this information to improve their business experiences today?
Cameron: I think I'll go back to — let me not try and get sued by about six of my clients right after this podcast. I'll go live and talk generally about the KPIs. So, the first one is, are people engaging with my products? That's an easy metric to evaluate and set a KPI against. Second one is, can we get people to re-engage with our product? So, within a unique ID scan, can we get the same device interacting with it twice, three, four times, et cetera?
I'll give you an example. We went live with Balmain a couple of weeks ago for Paris Fashion Week launching their Pokémon collab. We brought Pokémon go to live through NFC in their products so you could buy different products and access different Pokémon characters and be able to unlock legendaries based on having three or four Balmain items and stuff like that.
So, there's a really interesting thing about, can we get people to start interacting with more products and build a product graph around that person? Can we capture first-party data? So, can we capture things like email addresses with opt in? How long are people spending on the experience? I think those are probably the main KPIs that we're looking at right now.
Because there's an inherent media value in connected products as well. If you scan a code and you stand on an experience for two minutes, there's an inherent media value. How much would brands spend elsewhere for you to spend two minutes looking at their content? So, there are all these different metrics that you really need to understand, brands and brand marketing to understand how to sell it back to the business properly as a success. I think those are the key ones right now.
Erik: Okay. Interesting. Maybe after our podcast, I'll have to pick your brain on a project we're working on right now. Cool. Well, I think we've covered a good bit of ground here, Cameron. Anything we haven't touched on that folks should know?
Cameron: Well, this definitely isn't a plug. It's more like an industry resource. We spent quite a bit of money speaking to thousands of people last year from the US and the UK, about what they exactly want from connected products, what are they scared about. How do you feel about your data being used? What type of experiences do you want? Would you pay more for a connected product? What do you think about these technologies?
If you go to sharpend.com, you can find it within our work section, it's called the Connected Experience Report. There's a free download there. There are loads of good insights about how people actually feel about connected products if you're interested to find out more.
Erik: Awesome. Cameron, thanks for joining us on the podcast today.
Cameron: Great, Erik. Thanks so much for having me. All right. Take care.