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Mobile, the Most Expensive Real Estate in the World?

17 November 2014

Localz’s co-founder, Pete Williams, sat down with BDO’s TMT team to discuss how micro-location tech will transform the retail experience for users as brands revolutionise how they immerse and interact with customers.

Imagine you enter Westfield - your smartphone buzzes with a Christmas discount reminder from your favourite store. Upon entering, you find a shirt you like. Hold your mobile close to it. Price and size selections appear on the screen. The app then suggests accessories which may match. You use the swiping interface – made famous by Tinder – to select or discard items. Finished? Your items await at the counter, where you’ll hover your phone once again to collect loyalty points and close the transaction.

Welcome to the Near-future of Retail

‘There’s no online or offline anymore, it’s just shopping’.

Localz’ vision for retail pervades every construct of its’ experience-centric solutions. The start-up uses iBeacon technology to implement ‘real-life cookies’ and augments the brick-and-mortar model with the precise organisation and tracking capabilities of online stores.

Unlike near-field communications (NFC), iBeacons actively send signals to designated smartphone applications and is ideal for location-based triggers known as geofencing. Utilising BLE (Bluetooth Low Energy), the technology is also power efficient.

Micro-location technology is not difficult to access or harness as few restrictions are set about proprietary use and IP. The differentiator, then, lies in the integration of the iBeacons with current retail systems, particularly point-of-sales (POS). ‘These systems were developed in the ‘80s and ‘90s, and the customer interface is not designed to accommodate something like our systems’ Williams explains.

This is where the company has thrived, having developed systems in conjunction with two of the most pre-eminent retailers in Australia ‘who saw the potential in Localz’s vision’.

The in-store trials shall soon follow, and retailers should watch this space.

As the first ever winner of John Lewis’ JLAB – an incubator targeting start-ups which may revolutionise retail – Localz has also co-created various solutions with the omni-channel retailer. Most notable is their Click and Collect system, which streamlines wait time for collection of online purchases. With a broadcast range of up to 80m, the micro-location system lets customers notify the store as they approach. The request is updated on the queuing system, alerted to a pool of staff, and then removed by a staff as he/she actions it.

This process-optimisation is crucial for managing sporadic parcels collections as 50% of pick-ups occur on Thursday and Friday.

Time to be Staff-Centric

Whilst ultimately transforming the user experience, Localz’s solutions extend far beyond the frontline.

In fact, the technology’s rapid diffusion among major players stems from their need to accelerate and automate back-office processes. For example, standardised stock containers may be tagged using beacons, enabling employees to track quantity and navigate through the warehouse via a micro-location app. This is valuable for big retailers whose employees may spend hours reviewing hundreds of pages for the daily stock-take.  
Beacons can also be installed at check-points to effectively track the transportation of products and may become an integral part of supply chains and logistics management. Whilst Localz’ systems are compatible with iOS and Android, in future, Williams hopes to accommodate enterprises which have Windows operating systems embedded.

Evidently, the bounds of possible applications for Localz’s solutions are as far-reaching as the team’s ability.

Team Agile

The team founded Localz after being disqualified at a 48-hours Hackathon sponsored by Samsung. ‘The judges couldn’t believe what we’d achieved given the time frame. They thought we must have cheated. This was when we realised the collaborations we were capable of outside the corporate world.’ Williams shares.

He was then leading the mobile and emerging tech division at NAB, where his team developed NABFlik – the bank’s mobile payments app – a less marketed equivalent to CBA’s Ka-Ching and ANZ’s GoMoney.

The team was essentially tasked with fostering the enterprise’s innovation, and is no stranger to iterative, lean start-up processes. They grew accustomed to ‘one-week sprints’, where they persistently re-engaged the drawing board to minimise time invested in designing minimum viable products (MVPs). ‘Failing fast’ rendered extra capacity for the team to further develop promising MVPs.

With the synergies evident, it’s not surprising to see how much Localz has achieved in 10 months.

As one of the five start-ups selected by PayPal’s incubator – StartTank - Localz is currently moving into the giant’s London office, and Williams reveals ambitions to expand the customer base beyond major retailers to banks and payment systems providers. A natural progression for their ecosystem, especially given the founding team’s expertise.   

Localz Thinks Global, and So Should Australia

With a motto that reads ‘I’m right here’ in simplified Chinese, 我 在 这 儿, Localz was global from day one – a necessary mindset in the contemporary tech world. Tech innovations tend to scale rapidly as it’s a matter of transferring IP and know-how ‘software’ rather than transporting hardware.

As software magnate Mike Cannon-Brookes, Atlassian’s co-founder, puts it - your competitors are operating globally, and you must assume the same mindset to effectively compete1.

Listing the perks of ‘starting out’ in the UK, Williams explains that IP developed in the country only incurs a 10% corporate tax. Beyond the various research and development incentives, the Department of Trade and Investment has also helped kick-start Localz’s network building with introductions to prospects and potential strategic partners.

It is evident the UK is targeting a void, and captivating on the increased mobility of innovators, which Australia continues to underserve.

Mobile Space Money Can’t Buy

Williams echoes thoughts explored by Jakob Sand – BDO’s global head of technology – in his recent piece. Customers will have a primary digital wallet for open loop purchases, wired to their VISA etc., and various store-specific wallets to interact in-store, redeem discounts and so on.

Localz isn’t merely changing the way we shop.

Retailer’, big and small, should constantly rethink their customer intimacy, not just through an app or any particular platform, but rather every aspect of the user experience. Ask yourself, how immersive is my brand?

Soon, customers’ elusive preferred set will sit neatly across smartphone screens, and these locations cannot be simply bought.

1 Sunrise Conference, 19 September 2014.