Interview with Trevor Sumner, CEO of PERCH

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Trevor Sumner is an entrepreneur and investor who has spent the last 15+ years working as a product and marketing executive, building innovative tech companies, products and teams. He’s currently serving as the CEO of PERCH, one of the leaders in physical and digital marketing for retail brands like Macy’s, Estee Lauder, and Coty.

We asked Trevor to tell us more about PERCH, the challenges his retail clients are facing in 2019, and his advice to brick-and-mortar retailers looking to adopt new technologies in their stores.

 

Tell us about PERCH.

Perch was founded on a simple premise: “I can click on products to get more information online, why can’t I in-store?”

PERCH is the leading interactive retail marketing platform that uses computer vision and sensing to detect what products customers are touching in-store to respond with dynamic digital content – for the first time enabling digital product marketing in-store and letting every product tell its story. Our embedded IoT technology unites digital content with physical products, delivering highly personalized product messaging that drives 5-10x customer engagement, 30-80% product sales lift and 300-1,600% ROIs – while creating a magical experience for customers.

Perch lets customers “click” on products in-store the way they do now, by touching them. Our goal is to completely transform physical retail and create wonderful, engaging experiences behind products to drive revenue, change business outcomes, and lead the sea change from static physical stores to interactive media-rich stores.

An important thing to note when thinking about this transition is that these experiences need to be activated on the product level. Right now, if you walk into a store you see plenty of brand messaging, but a catchy slogan does not help you make a product choice. You need to understand how these products work together. You need to understand the specifications for each product, and how you could leverage it to its fullest. Four-point print on the back of a product isn’t helpful, and unfortunately, that is all there is in-store. So you are essentially forcing people onto their mobile phones to learn more and buy on Amazon instead.

We make it possible to bring all that great digital content about each product in-store naturally and seamlessly, the moment you touch a product. All the videos, ratings and reviews, how to’s, complementary products, spokespeople, social feeds… all of it. Any media or marketing app can be unlocked the moment you click on that product in store.

 

 

Looks like we have some overlap in terms of our enterprise retail partners! Who are some of the retailers you’re working with today at PERCH and what challenges are they facing?

There are a bunch of different brick and mortar stores, that have done nothing to update their in-store experiences and saddled up on debt and as a result, are closing down.

On the other hand, there are retailers and brands that are focused on creating delightful and engaging shopper experiences that remove friction from the shopper journey and are thriving.

We choose to work with brands in the latter category, those that are committed to the next generation of in-store experiences.

Brands and retailers like Johnson & Johnson, Macy’s, Kate Spade, and Wildflower Brands Inc. are all revolutionizing the way shoppers discover, explore, and learn about products in-store.

These brands were looking for ways to engage shoppers, analyze their behavior, and drive sales lift in a way that’s much more dynamic. They understand that omnichannel means messaging and measurement consistency across channels – because the consumer IS the channel. They should have a consistent, engaging and immersive experience everywhere they touch the brand.

With Perch, these brands gain insight into the middle of the funnel shopper behavior from:

  • When a shopper approaches a display
  • What products a shopper is touching
  • What percent of shoppers convert to screen interactions
  • And what content the user is engaging with to learn more about the product
  • And how that all converts to sales

Could you imagine trying to manage an eCommerce site with just sales data and no Google Analytics, Omniture, or whatever web analytics they have? How could you optimize a site experience with just traffic data and sales data? You can’t! So why would you do that in-store?

All of this data is available in an intuitive and robust data analytics platform allowing you to measure the effectiveness of your in-store messaging, design and test effective campaigns faster, more frequently and with greater effect.  It’s important to choose a true retail marketing platform, not just a customized in-store display.

For example, Kate Spade runs a fantastic product line called “Make It Mine”, where a customer can come in store and customize their purse. The challenge is, if someone wanted to try out several different flaps (black, polka dot, and flamingo, there are several thousand combinations), a sales associate would have to spend time creating those different looks for the customer to see the final product. What we did to solve this challenge was to create an experience that once the product is touched the customer could see all of the available configurations in a graphically-pleasing, language-neutral manner, making the experience approachable to an international audience. We won a Fast Company Innovation by Design Honorable Mention for this experience and so we have been excited to see how this removes friction from the experience for the consumer and sales associates.

In our Wildflower CBD Educational Experience, the moment customers touch or pick up Wildflower’s products in a shop, interactive screens will respond with rich digital information about those products, allowing customers to educate themselves about Wildflower’s extensive line of CBD capsules, tinctures, vaporizers, topicals, and soaps. Do you know when it’s right to use a capsule vs. a tincture vs. a vaporizer for CBD?  A lot of education is needed and it helps to have authoritative information, not just the word of a sales associate.

 

What are some of the key considerations retailers should be mindful of before deploying a new retail technology in their store?

Key considerations for any brand or retailer before deploying in-store digital marketing experiences are:

  • Are your in-store marketing efforts a key corporate priority?
  • Do your products have high-margin or turnover such that 30-80% sales lift is meaningful for you?
  • Do you have digital content for your products that resonates with customers?
  • Can you command a budget to do a pilot or larger rollout to truly test the sales economics and ROI?
  • Do you own the shelf so that your shopper marketing groups can command the space from retailers or a retailer that can attract the brands to subsidize the experience?

 

What are some of the surprising insights into customer behavior that your analytics software has uncovered?

Through many of our deployments, we see higher sell-through of our products, providing substantial ROIs, 63% sales lifts on average. We have seen these results in deployments with intentional user experiences.

We are finding that like in e-commerce there are user-experience principles to drive the most engagement in-store, but they are slightly different than online interactions. We incorporate these design principles and best practices throughout our client work. It always starts with the customer and their shopper journey.  What is the content that helps them through the frictions of buying a product? What questions do they need to answer? What’s the best marketing opportunity?

For example, executed in our Johnson & Johnson deployment, there are clear calls to action, a plethora of educational content for their products, and intelligent design for cross-selling, where when a shopper picks up a band-aid, the experience will know to recommend Neosporin. In grocery, there is a high degree of buying intentionality, so the opportunity for cross-sell is often key.

 

Retail technology like AR and VR are all the rage – but are they really worth the investment? What kinds of retail settings are they best suited for?

As with a lot of emerging technologies, there is a lot of potential for mixed reality solutions. With that being said, 73% of Americans stated they were “knowledgeable” about MR/AR/VR, a decline from 83% the year before. As the market is flooded with more augmented and virtual reality experiences shoppers are more confused than ever as to what the practical uses for the technologies are, and retailers are finding it challenging to retain users for their experiences.

It is true that people who use AR/VR are more likely to make a purchase, but few people use these applications, because they require specialized equipment or mobile apps. Most people will not download your mobile app. In fact, for most retailers, 5-10% shopper penetration is a huge success – but that also means these solutions will miss 90-95% of your shoppers!

We recently hosted a webinar called “Mixing Physical & Digital Realities”, which walks through how retailers are using MR, AR, and VR to revolutionize the customer experience in 2019, where we go over the successes and failures in these deployments.  As part of this webinar we created this matrix which highlights where we believe the industry currently is in terms of these mixed reality experiences:

 

 

Is the future of retail digital, omnichannel, or experiential? Or a combination of all three?

The future of retail certainly is a combination of retail digital, omnichannel, and experiential.

Retailers need to leverage their spaces to create unique limited-time experiences like “The Market @ Macy’s” initiative which frequently brings in different direct-to-consumer brands. This creates buzz around their physical locations, and a level of urgency for the consumer to come in often to the retail space so they could experience something new.

With that being said, we are going to see more concept stores and 3-month build-outs, similar to Showfields. We are going to see places where brands will go into physical spaces and engage with customers without worrying about the fixed cost overheads that make it prohibitive to test physical spaces. We are going to see more agile models with increasing pressure on direct-to-consumer brands to go in-store, but with smaller footprints.

In addition, retailers will be leveraging their CRM data to gain deeper insight into their customers to discover what inspires them to come in the store. With this data, the retailers could design promotional experiences that drive traffic to the store, improve engagement, and increase dwell times.

It is a matter of smaller spaces that are more experiential, as opposed to towering static warehouses. We are going to see rapid adoption of embedded sensors, screens, and better payment processes. And great digital will always be experiential if done well. If they just wanted to go to your website, shoppers would. In-store, the expectation is different, and the digital needs to be complementary to the physical experience.

 

Should all retailers define success by the same metrics?

All retailers should not define success by the same metrics. As the retail landscape continues to evolve to think through the store’s ability to influence online sales and overall loyalty, we must evolve our measurement of ROI and question metrics such as:

  • Sales per square foot
  • Same-store sales growth
  • Stock turn / inventory turnover
  • Results of short-lived “tests”

Instead, we should be looking at the role of the store in influencing purchasing holistically, as well as its profitability as premium real-estate in promoting brands. This means updating traditional metrics such as:

  • Conversion rate – to incorporate online sales influence
  • Gross margin return on investment (GMROI) – to incorporate offline to online acquisition target costs, online sales influence, and the margins associated with premium co-op opportunities

Overall, treating the store more like a media property as opposed to just a commerce destination will be critical.

There is an assumption within the industry that 60% of promotional initiatives have negative ROI (UpClear 2017), however, by taking factors into account like e-commerce growth, return rates, and effectivity we can identify the existing opportunities to optimize our in-store strategies. 2019 is the year that the physical store re-emerges as the most profitable way to drive profitable growth. Just ask Warby Parker, which sells more in-store than online.

For some retailers same-store sales is helpful, but for many omnichannel retailers that is no longer the case. It has been shown that by opening a retail space in a geographic location, your online sales also go up 37% in the area. It is important for brands to consider where they are in their omnichannel strategy to see if they are ready to leverage their physical spaces as a marketing channel instead of just a primary point of sale.

 

What do you think is an under-reported topic in the retail industry media?

I think what is going underreported in the retail industry media are the brands that are making their retail spaces ACTUALLY serve their shoppers.

Ikea is a great example of a retailer designing experiences for its customers bringing value to their shoppers at their Urban ‘Planning Studio’ in New York. At the Planning Studio, shoppers are empowered to shop in the ways that they expect in 2019, in a space with more live mockups, on-site consultants, increasing emphasis on delivery, and assistance on constructing purchases shown by their acquisition of TaskRabbit.

I believe by highlighting these excellent experiences other retailers will take note, and think about how they could design seamless experiences for their shoppers, raising enthusiasm across the board.

 

If you could give one major piece of advice to all big box retailers, what would it be?

2019 is the year physical retail will take its crown back.

If you want to be part of that renaissance, design experiences that make sense to your customers and meet their expectations.

Make it easy for them to discover and learn about products in your store. In-store marketing is about content, education, and frictionless experiences that sell products, not catchy slogans and flashy technology.

 

Your website features an awesome map with marked locations of places you’ve visited. How have these “great adventures” inspired your work at PERCH or as an investor?

I’m an adventure junky. I’ve scuba dived in the most shark-infested waters in the world (Cocos Island) and even in Antarctica.  I’m constantly striving to see the world, what’s possible and push the limits.  And that’s a natural extension of investing or doing a startup.  Having a clear and expansive world view, taking risks and constantly challenging yourself and what’s possible is critical.

Life is filled with amazing, unusual or challenging opportunities.  It’s up to you which ones you are willing to tackle.