When it comes to building relationships with customers, online retailers have access to massive amounts of data – they know exactly who their customers are.
But for their brick and mortar counterparts, that sort of data has been hard, or even impossible to get.
Antoine Azar says he wants to change that. He’s the CTO and co-founder of Thirdshelf, a Montreal-based startup that wants to bring the same sort of data that helps online retailers understand their customers buying habits to independent retailers who do most of their business offline.
“Right now, if you look at the state of retail and especially brick and mortar retail,” Azar says, “retailers are essentially operating in the dark, and operating on a very transactional basis, not on an relational basis.”
While online businesses are able to discover things like the cost of acquiring a customer and the lifetime value of that customer, brick and mortar retailers just don’t have that information.
“There’s a complete lack of data,” Azar says. “You don’t know who your best customers are, you don’t know what their lifetime value is.”
In April, Thirdshelf announced that it had raised $800,000 in venture capital to help accelerate its growth. The all-Montreal round included investment from Otimo Ventures, Interaction Ventures and iNovia Capital.
Thirdshelf uses what it calls “loyalty marketing.”
Retailers using the Thirdshelf platform get access to white-label loyalty program that integrates with their point-of-sale system to gather information about individual customers at the store level.
“We’re able to track your transactions and start to understand your behaviour, your purchasing profile, your purchasing habits and what kind of customer you are,” he says.
From there the platform able to develop insights and automate actions based on those insights.
For instance, if you usually buy something at a specific store every two months but haven’t purchased anything in four months, the Thirdshelf platform could identify you as a customer the store is at risk of losing and automatically send you a personalized offer intended to lure you back.
“The beauty of this is because we’re connected to the point-of-sale system, we’re able to also track if the offer we sent you actually resulted in an action of you coming back in the store and purchasing something,” he says.
That allows retailers to know the exact impact of their marketing efforts in dollars, something that’s been traditionally been impossible in the brick and mortar world.
Azar says that developing a white label solution was a deliberate move, that way the focus is on the relationship between the customer and the retailer – not the customer and the platform. As well, he says, that it leverages the trust that people who shop at small independent retailers have in those businesses.
It’s a big market, though, one with a lot of potential customers but he says that companies like Shopify and Lightspeed have proved that it’s possible to develop successful businesses targeting underserved, independent retailers.