- Tech & Gadgets
- BRW. lounge
Published 14 June 2012 16:55, Updated 18 June 2012 08:08
Writing on the start-up scene, I often muse on whether I should throw this whole journalism thing in and instead conjure up a cracking business idea. There are some very good reasons why this wouldn’t be a terrible idea. Reporting for BRW, I’ve been able to learn about strategy from some of the country’s best business minds. I’ve written about companies that have flown and those that have failed. And most of all, think about the contact list of wealthy individuals that I have amassed from reporting the BRW Rich and Young Rich lists who could fund my venture (although I admit sometimes our conversations don’t extend past “take me off that bloody list!”).
There’s just one problem (well two, if you count the fact that I actually quite like being a journalist). The crucial, yet so far elusive, idea. Try as I might, that great product, service, group buying aggregation website or social discovery app escapes me.
Here’s what I’ve worked out so far.
To come up with a great business idea you need to have a vision for a particular industry. You need a creative mind that can imagine how things might be.
This little epiphany came to me as I listened to the chief executive of Salmat, Grant Harrod, speak at a lunch recently.
Salmat is a listed company that has its roots in production and distribution of catalogues. Realising that print had a limited future Harrod has gone about repositioning the company to take advantage of its customers’ digital marketing needs, too.
Many of Salmat’s customers are retailers and listening to Harrod speak about his vision for that industry, I realised that I actually didn’t need a vision. I just had to pick the brains of somebody who does.
At this point, it’s important to clarify. The vision is not the idea. But at each juncture where an industry evolves, there’s an opportunity for a nimble, forward-thinking, innovative start-up to hold up its hand. The opportunities for entrepreneurs lie at these distinct points.
Let’s look at Harrod’s vision for how he imagines the retail industry will look in the future and pick off some simple ideas.
“In the old offline world, there was only one opportunity for interaction [between the customer and retailer],” he says. “When the customer bought the product. That was the only opportunity to get to know them. In the new digital world ... it’s a world where there will be multiple interactions where you’re going to interact with a client. They walk into the store, there’s in-store wifi, it invites you to logon [for example to an app].”
Already I see opportunities for developers and telecommunications companies that understand near-field communication technology.
“[The system] knows who you are, it links to the loyalty base.”
Marketing consultants and developers.
“The mobile device is disruptive to the whole retail environment,” he says. “Maybe there’s a QR code or something similar. You scan and you get more info [on a product]. It pulls down recommendations from friends and other customers. You want to get their thoughts and views. As consumers we are easily influenced by the experience of others.”
Comparison websites, social media marketers, more developers.
“The next thing is I’m a loyal customer, I’ve shopped here before,” he muses. “What’s my price? The idea of dynamic pricing becomes more relevant. You have the ability to serve up a very unique experience.”
Financial modellers. Developers.
“Then they select the product,” he says. “They could make a payment online and you walk out of the store with your product. There’s five to six interactions [with the customer] and every interaction gives you an opportunity to find out what they’re thinking and their likes and dislikes. If you’ve got the systems capability to be able to create that experience but importantly harvest that information ... you can enhance that whole process. For us that’s the evolution.”
Harrod then mused about “localisation” capability where the range of product in store is slightly adjusted to suit the demographics of the community it’s serving. To get these changes right, retailers need statisticians and demographers. And you can be sure they need top notch warehouse and logistics providers.
Sticking on the local bent, Harrod stressed the importance of location-specific marketing and the ability to invite nearby customers into the store (no surprises given his company has stumped up $3 million for Roamz – an app that curates location-specific social media activity).
“The opportunity to be able to say [for example] this afternoon at 2pm, pop up to Fitness First, Lorna Jane will be featuring its range for the next two hours,” he says. “How do you engage your customers with this really locally specific event? Social channels are helpful in that respect but you’ve got to know who your customer is. The one thing that’s evident to us is consumers have an amazing appetite for information. But know exactly who I am, talk to me about the things that are relevant to me. I’m really interested to know that if you’re going to have an event in your store in Bondi Junction by a celebrity or athlete. I’ll be really upset if I didn’t know about that because I want to be there, but don’t share stuff with me that’s not what I want because that’s effectively spamming.”
“It actually puts more pressure on the retailers to have the ability to learn and understand how your customer is and then make sure you channel all your communication specifically at customers. This is the next wave or retailing.”
Are you riding it? More importantly. Do you have a vision for the industry that you want to disrupt or serve? If not get one. And if that’s too hard, borrow one like I intend to!