Prostor Capital Fund will invest $2 million in Open Retail Company
Ex-Minister of Communications Leonid Reiman’s and IBS top manager Sergei Merkulov’s Prostor Capital Fund will invest $2 million in Open Retail Company. Its development - the Smart Checkout system–analyses the shopper profile at payment time issues the discount coupon according to customer’s preferences.
Smart Checkout System is currently installed in 19 "Victoria" supermarkets of "Dixie" Group in Moscow and Moscow Region and in 13 "Monetka" retail chain stores in Ural. Open Retail has current contracts with such companies as, "Baltika", CocaCola, JTI, MelBrands, SCA Hygiene Products, MB group "Impex", "Dymov", "Hlebprom" and others. By thу end of 2017 Smart Checkout plans to sign contracts with at least 120 brands and gain $100 million of revenue.
It is to be recalled that Prostor Capital Fund in amount of $20 million has already been invested in dozen of projects in information technology sphere, among which are Dnevnik.ru - online diaries service, Dulton Media - the platform for video distribution, Umisoft - manufacturer of sites control systems. The Prostor Capital share will come out at 22% in Open Retail after the deal; the other shareholders are not disclosed.
The Smart Checkout technology is based on hardware and software complex that receives the shopper's current check and his loyalty card ID information and compares it to specify criteria of gender, age, purchase history. According to analysis of the data, the system determines whether the shopper fits with the specific campaign criteria, if the coupon is issued, and what message it should convey to concrete customer. Coupons are printed automatically during purchase payment.
There are no direct competitors for Smart Checkout in Russia at the moment. Catalina Marketing and local Indian market player Intelleh Marketing,use the similar business model. Catalina Marketing technology is installed in USA, Canada, Japan and some European retail chains. "We are confident, that Smart Checkout is able to equal the Western counterpart success - the Catalina Marketing company, which currently influences 75% of US consumers purchases, - the Open Retail Director, Alexander Shurov says. - Russian indirect advertising market (BTL) volume is amounted to 80.4 billion rubles in 2012, what is 18% higher in comparison to 2011. And this volume is growing constantly".
Retailers have already appreciated the marketing service. "The recent campaign in "Victoria" stores covered up to 17% of the traffic. The 31% coupons were activated, 12% participants collected the required for discount coupons number. These are very high rates", - "Victoria" Marketing Director, Irana Katsieva, says. She notes, that she receives data about not only "Victoria" stores shopper's preferences. For example, it is possible to predict whether the commodity is in demand before it is represented on the chain's shelves.
"Definitely, the service has a great potential. I'm not aware about the direct analogue in retail, but many companies experiment with the personal offers otherwise, especially in finance and telecom spheres", - the Deputy Director of the KROK Information Technology Department, Maxim Andreev says.
In his opinion, the up-to-date retailers have a good IT infrastructure to use such a service at the points of sales. But its success depends largely on the quality of the statistical model to be built. "There is no culturefor active coupons use in Russia, but if coupons become appropriate and personal (i.e., they don’t offer a discount cap when buying an apartment), I believe it will work - we are fond of saving money too", - Maxim Andreev sums up.