Natasha Rawlings is Co-Founder at StreetHawk, a mobile shopping platform that matches intent and in-market buyers. Here she discusses the company’s mobile retail solution as well as the potential data-driven ad models opening up around mobile in the Australian market.
Tell us about StreetHawk and its launch in Australia, do you have plans to extend the offering into the APAC region?
StreetHawk is a retail platform that helps retailers drive footfall. We do this by using retailers best asset – their merchandise – and using it to send personalised phone notifications to shoppers when they are around retailers stores.
What enables StreetHawk to do this is our cloud ‘RRR Matching Engine’ – that means getting the right message (in this case phone notifications) to the Right Person at the Right Place and Time. This real-time cloud-service based tech is revolutionary, and we are now beginning to speak to agencies, retailers and media companies about leasing the engine to drive retail footfall and providing app engagement.
A user case for shoppers is that if the Country Road app integrated our RRR Matching Engine and a shopper ‘favourited’ a dress, when they are out and about shopping they would receive a phone notification to say the dress they like is nearby.
The great thing for retailers is that they don’t need to create an elaborate communications plan to do this – they simply add our RRR Matching Engine (RRR) to their apps and let it work. It’s a set-and-forget communications tool. Retailers can also use our RRR Matching Engine for custom campaigns as well. For example telling shoppers inside a 500metre GeoFence about their latest collection, or in-store event. And it doesn’t have to be when shoppers are around their stores of course – it’s just better to targeting to drive footfall.
To showcase the RRR API capabilities we have created an aggregated StreetHawk Fashion App – it demonstrates how our engine can be used. In fact the StreetHawk Fashion App, is a brand-new and revolutionary location-based shopping app. Shoppers can search for the items they are looking for in the shops around them, or if they save their search StreetHawk shops for them 24/7 and sends a phone notification when shoppers are around the item/s they want.
We launched in the iPhone app store in January, and have been using a test and learn strategy in various media to attract shoppers. Our main focus over the last few months has been to perfect the product based on shopper feedback. We are just beginning to push the app out there now so it is really early days.
Our plan is to start exploring off-shore opportunities once we have traction in this market. Having said that, if an opportunity comes up elsewhere in the world, then we are happy to chase it – Asia, the UK and US are doing amazing things in retail and we’d love to be part of that.
How does it change how retailers engage with customers?
The RRR Matching Engine enables retailers to contact shoppers when they are around their stores about the things they are specifically interested in. It’s personalised and relevant communication which is important on mobile phones where irrelevant messaging feels like spam. Currently most of the industry sits in the ‘near spam’ category in terms of SMS or phone notifications. Ji-Wire released a report last February which found that 20% of shoppers will go in-store after seeing a relevant, location-based message. RRR enables retailers to match their inventory to shoppers wants, when shoppers are close to their stores, and in the right place of mind – that’s a shopping frame of mind.
Can you explain the StreetHawk’s business model? How do you generate revenue? Will you offer in app advertising?
We are currently exploring different models for leasing the RRR Matching Engine. Different users have very different needs but we will get to a one size fits all model.
For the StreetHawk Fashion App, we allow 1,000 items per store (we have had up to 150,000 items for Sydney, depending on how much is on-sale). We charge a cost per click and a clip on the ticket if we are linked to a retailer’s POS. POS integration is very important as transactional information is the most important data a businesses can have about a customer because it shows you everything you need to know about their purchase patterns. Smart retailers know this so they are keen to understand the sales made through StreetHawk and use this data for future promotions. StreetHawk also has a loyalty module which retailers can use to record actions like sales, and other activity such as visiting shops.
The StreetHawk Fashion App has been created as a new advertising media. It’s about allowing shoppers to surface the deep inventory around them on the streets. In-app advertising is not right for us at the moment, but in the future we might be able to use RRR in others’ apps to serve relevant advertising. We don’t think advertising will amount to much in mobile until it is highly personalised and relevant – people will dump apps that create un-necessary messaging.
You’ve mentioned that footfall in-store is still the main revenue-generator for fashion, how can mobile improve that?
Footfall is the main revenue-generator for all of retail. In this country, 90%+ sales are made in-store. Conversion rates are also higher in store than on-line, usually by as much as 10 times.
There’s a lot of chatter in retail press about shops being used as showrooms – shoppers try on good and then buy them online to save.However, 70% of shoppers are using smartphones while they shop to help them with their in-store purchases. Google Insights has found that although 50% of shoppers were comparing prices, there was an equal number who were using them to get promotions and coupons, 42% to read reviews and get product information, and 32% (mainly in the US) to search in-store inventory. Really, smartphones are being used at all points on the path to purchase –from product discovery to helping conversion in-store.
Then there’s new tech like ours that helps drive footfall. I think mobiles might end up being the savior of bricks-and-mortar retail, but there is no doubt that they will disrupt retail in the way online has changed the music and publishing industries forever.
What type of response has StreetHawk had from the Australian market? Are consumers actively engaging with the app?
We only beginning our marketing push after concentrating on getting media learnings over the last few months. However, we are closely monitoring our own customers and have found we have a 20 – 30% active rate. 50% are registering to save their searches, and customers have an average of three saves searches and on each visit are looking at five fashion items in detail.
These are very high figures and would be the envy of most apps.
StreetHawk’s model relies heavily on data driven advertising – can you give an insight into Streethawk’s strategy on managing data, privacy, acquisition?
At the moment StreetHawk is a rules based engine, but over time (when the data builds) we will move to machine learning. The RRR Matching Engine needs lots of data to work efficiency. Already it is matching vast inventory with shoppers searches – and eventually behaviours in real-time from the cloud. No mean feat.
StreetHawk understands that privacy is an important concern for just about everyone using location-based services, and that the places people go can often be sensitive. StreetHawk fully participates and supports the National Privacy Principles contained in the Privacy Act 1988 (plus other applicable data protection laws in Australia) and is committed to ensuring the privacy of our shoppers personal information. This means we keep all of our information in a secure database and don’t pass any personal information to third parties without the explicit consent of our users, and we have no plans to do so. We are also following privacy legislation overseas, especially in Europe where the new Mobile and Cookies legislation is about to come into place.
Practically, we protect privacy by only ever knowing where a shopper is within a 500m radius (when the app is running in the background). We take 100m location samples when the StreetHawk app is foregrounded to correlate shop location for footfall. We don’t store location history. We also will not share the username or user device with any retailer. Any reports we provide to retailers will always have aggregated statistics, not individual statistics.
Will mobile apps and services, such as StreetHawk, be a game-changer for struggling retailers?
Absolutely. In Australia, 25% of shoppers already use apps in shopping – with 70% using their phones when in shops. Shoppers are adopting and using mobiles at the rate of knots – current penetration for smartphones in Australia is 52% – but retailers are not keeping up. I think of mobiles as being the light-sabres of retail, helping to fight back against the online menace.
How will you get cut-through with consumers?
By providing real utility in an app. We will never compete with Facebook, other social media and games. If users are happy to use us once a week in the pre-shop process, then we’re winners. We want to provide this ability to all retailers.
What impact will StreetHawk have on the overall mobile advertising market – do you see this rolling out to other verticals, for example, grocery or other verticals?
We are not sure yet how StreetHawk will pan out – we had planned to move to other verticals such as homewares and kids, but now due to interest in our RRR Matching Engine we might be better to provide to retailers across sectors, including grocery, hardware and even property and travel.
A bigger vision is to create an ad network that is driven by mobile behavior, and transactional information. Mobile advertising is still in its infancy – just 1% of marketing spend (whilst people spend 9% of their time on mobiles). There is definitely room at the moment to create a platform that has real targeting ability – at the moment it is a pretty blunt tool. For example, of the 25 networks that serve Sydney, I can only advertise on two to target gender and the Sydney Metro area.
Are there new data-driven ad models StreetHawk could roll out, leveraging customer data?
For the StreetHawk Fashion App I am buying mobile advertising media. It is very blunt tool for targeting, and I can see why advertisers haven’t adopted it yet. Even Google’s Admob will only let me target device and state. I think there is the possibility for StreetHawk to create a private exchange for retailers, using data from a number of apps to help with targeting.
For example, if a retailer wants to pool their data in an anonymised way, they can advertise their app – or their merchandise in RRR style – in other retailer apps who are also using StreetHawk cloud (with relevant customer opt-ins of course). We’re a long way away from that, but it’s a possibility.ExchangeWire