Following the launch of the Digital Retail Innovations 2016 Report (sponsored by Webloyalty) a series of Q&A’s with the leading figures behind some of the key entries in the report are being published.
Here is a Q&A with Simon Harrow, co-founder of Elevaate, which is placed at number 25 in the report.
1.Where did the original idea come from?
The concept behind Elevaate came from a program we ran at Kiddicare, our previous company. Our suppliers wanted to have a voice in how consumers discovered and bought
their products online and we wanted to create value from every customer visit. We provided the ability for suppliers to buy sponsored content on Kiddicare.com. It was incredibly successful with 10% of our EBITDA coming from the program in the first year. However, it was also very basic and we believed there was an opportunity to build a cloud platform that would bring a level of intelligence and scale to the concept.
Today, Elevaate helps retailers and their suppliers work together through a concept we call ‘Open Trading’, where partners can use their deep category and product knowledge to create an exceptional customer experience and generate more attention and purchases of their products.
2.What has been the level of take-up of the service and what are the key ways retailers are using it?
We have seen phenomenal traction since we launched the platform just under 12 months ago – serving over one billion sponsored products. There are three core ways our platform is used which drive product discovery and overcome new product inertia. Firstly, there is category dominance – the ability to promote a product to the top of an existing category. This is great for raising awareness of promotional offers or new products.
Secondly, there is unique online journeys – promoting products in online only journey’s, for example search, homepage, basket, and favourites. This allows suppliers to ensure they have visibility in increasingly complex shopper journeys. It also helps drive AOV and items per order – specifically through impulse purchases.
Thirdly, there is category and product adjacency. This is the most interesting application, using the platform to effectively cross-sell to create lifestyle driven shopping missions. As an example place KitKat next to coffee. This is very powerful as it overcomes the limitations of physical retail to maximise the revenue opportunity online.
3.What about competition in this area?
The pressure for retailers to have a bi-model operating capability, providing greater value to suppliers, taking into account the increasing costs to acquire customers, and being able to justify spend through zero-based budgeting means retailers need to generate new value from their channels to ensure profitable growth. The approach used today to achieve this ‘value’ creation has been through blend of retailer and publisher models. Typically, this is achieved through either an advertising or supplier funding approach.
Advertising – algorithm driven, network model (commoditising space), poor customer experience, lack of control and relevancy, and it doesn’t leverage partner relationships.
Supplier Funding – manual merchandising or banners, resource intensive and slow, doesn’t scale across site, and there is under or over valuing real-estate.
These approaches force retailers to choose between relevancy or reach. By opening trading capability to deep category and product experts in an aligned, controlled, and collaborative way it leverages untapped resource to create more value from under-utilised channels. We believe we bring a unique solution to an established problem for many retailers.
They can now have a program that delivers both relevancy and reach. Our ideal profile is retailers who have a large number of products, suppliers, and a deep taxonomy. This allows us to create the most value for them and their suppliers. Excitingly, we are seeing huge success across multiple retail verticals; from fashion, pharmaceutical, marketplaces, grocery, and specialists.
4. How has the solution been developed / advanced over time?
The solution has developed significantly over time. We have customers from very small one-person operations to the largest global brands. This has meant that the platform needs to fit for a number of different users, which has required some innovative thinking. We have put a lot of resource into making the platform intuitive so that is can scale. We have also worked with some of the best technical and operational minds across retail to ensure that we always building value into the platform.
5. Have there been any surprises along the way?
There have been plenty! Building a software platform has been challenging for retailers, however, we have been pleasantly surprised at how open retailers are to change. There feels like a genuine shift of mentality over the past few years where retailers are looking to work more collaboratively with their suppliers and partners.
6. What can we expect from Elevaate in the future?
Elevaate has an exciting 12 months ahead. We have just launched a new Store Listings
Experiments feature – providing testing capability to suppliers. We’ve an incredible pipeline of retailers, which will enable open trading across multiple retail verticals. We are excited about building on our data, intelligence, and targeting capability as well as launching into new territories.
We are also expanding into new verticals like B2B, electronics, aggregators, and stationery. We don’t tend to look much further out – things are moving so quickly and we are an execution focused company. When you are releasing platform features every week. Anything beyond a year starts to become more academic than informed.
7. Do you have any recommendations for entries in the next Digital Retail Innovations report?
Mercaux is a store app for sales people and customers with an access to all inventory, product, styling, and digital content. They are the first in-store technology I have seen that really delivers for both the sales staff and customers. Their effectiveness is due to the simplicity of the way it’s been designed and architected. They are rolling out globally with the likes of KiKKO Milano and Bennetton who are seeing sales at store level increase of an average 12%, which is massive.
Webloyalty is a leading reward programme provider working with major online retailers to help them build stronger, more profitable relationships with their customers. Through our membership programmes we help our online retail partners’ customers save hundreds of pounds a year while providing the partner with an additional revenue stream. As well as incentivising customers to make repeat purchases at the partner’s site, members can also earn cashback and get great deals on everything from fashion to electronics to travel, at hundreds of top online stores.