Tag: Retail

Sourcing Journal: How Serial Entrepreneur Uses Blockchain and Crypto to Reimagine Retail

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This article was originally featured on Sourcing Journal on March 22, 2018. Written by Jessica Binns. (Link to original article.) SHOP is now EVERY* (Every instance of SHOP including the title has been changed for brand equity)

John Wantz thinks blockchain can create better relationships between brands and consumers.

Back in 2011, the serial entrepreneur co-founded Comr.se, a commerce-centered API for social networks, mobile and marketplaces. After a failed attempt to sell the startup to Target, Wantz joined the big-box chain’s innovation team and worked for a year on its secretive Project Goldfish initiative. When Target shut down Project Goldfish (as well as its Store of the Future innovation group) following disappointing holiday earnings, Wantz launched yet another startup, EVERY — which looks to the decentralized nature of blockchain technology to reimagine the retail experience and, Wantz hopes, to strengthen consumer relationships with brands.

At SXSW, EVERY revealed that it has acquired three other startups: Wantz’s own Comr.se, Kanga and venture capital-funded FoxCommerce, the latter two of which will be the first apps to run on SHOP’s blockchain protocol. While FoxCommerce’s website claims it’s an e-commerce platform designed for the digitally native brands disrupting retail today, Kanga says it’s a millennial-driven apparel marketplace — offering goods like Angie Bauer lingerie and collections from Diesel — with seemingly revolutionary rhetoric built into its mission. It’s “a brand-direct marketplace for those who reject the status quo. gamechangers. rule breakers. goodtrouble makers,” according to Kanga’s website.

Kanga, in particular, maintains that retail has had too much control over consumer data for far too long. But Kanga, according to its website, “empowers you to take your data back, control who knows what about you, and respects the value of your personal information by rewarding you for the data you choose to share.”

The EVERY technology ecosystem seems to be a response to Amazon and its obsessive control over brand data.

“We’re laser-focused on shopping and powering experiences that enhance the direct relationships between brands and shoppers,” Wantz said. “EVERY is establishing a decentralized retail ecosystem where brands and shoppers have the power to dictate how value will be exchanged amongst themselves based on shopper-controlled access to their own personal data and appropriate rewards given by brands in return.”

Those rewards come in the form of the EVERY cryptocurrency token, which shoppers receive for sharing information with brands such as their personal style preferences, profile info and purchase history. Consumers then can exchange tokens for discounts and other purchase incentives, according to SHOP. The company plans to sell 100 million EVERY tokens between May 14 and June 13 this year. Both Kanga and FoxCommerce — which was launched by former ModCloth co-founder and chief experience officer Adil Wali — were acquired via EVERY tokens.

“The EVERY token has been designed to support an ‘information marketplace’ that continually increases the amount of personal consumer data being shared between shoppers and brands,” Jamie OShea, EVERY CMO, explained. “This equitable exchange helps brands deliver more meaningful retail experiences to shoppers while returning greater savings to them in the process.”

“For shoppers, this is the first tool that empowers them to own and monetize their personal data, shifting that control out of the hands of third-party retailers like Amazon,” added OShea, who co-founded the counterculture art publication Juxtapoz and provided marketing consultant services to brands like Disney and Nike.

“Blockchain technology has the power to greatly improve many industries, and retail is chief among them,” Wali said. “EVERY is well positioned to be a large part of the meteoric rise of decentralized technology.”

Originally published at medium.com on March 28, 2018.

Why Blockchain is the Missing Piece in Retail

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Consumers provide more value to the retail industry than simply the dollars they spend. Many shoppers aren’t aware of the mass amounts of personal information retailers are collecting about — and profiting from — all of us every day. If you shop at a major retailer often, they likely know your age range, style preferences, location, and more. Some shoppers brush this off as a way for companies to more effectively market products. Recently, the Daily Mail revealed how brick-and-mortar stores are using laser and motion sensors to track where customers are walking, and what products they physically gravitate to. More disturbingly, many retailers are starting to adopt facial recognition on a grand scale — including Walmart — and using consumers’ personal biometric data to inform their sales strategies. And that’s just a glimpse at what’s happening in-store.

Online, all our actions are tracked, analyzed, centralized, and monetized in order to extract maximum value from every customer’s every movement across the web. The accumulation and monopolization of this data in search, social, and ecommerce is exactly what’s made Google, Facebook, and Amazon some of the most valuable — and unbelievably powerful — companies on the planet.

Sure, there’s some advantages to customers in having their personal behavior and shopping patterns tracked in the form of better targeting by retailers (ie: getting products we actually want in front of us at cheap prices), but now that the center of modern commerce has shifted to massive online data centralizing marketplaces like Amazon, Walmart, and Alibaba, we’ve seen Brands brought to their collective knees as the power to understand and better serve their customers has been hijacked on a grand scale. Even worse, because they have the most understanding of Brands and Shoppers, these marketplaces are using this data to actively copy their best-performing Brands with their own in-store lines, and promoting them more heavily to shoppers.

To help return the balance of power to Brands & Shoppers and protect the longevity of the Brands we love, we created EVERY*, the first cryptocurrency purpose-built for shopping and an accompanying blockchain-based protocol that empowers developers to create new decentralized retail experiences. Now, for the first time — via the EVERY* Wallet & Token — Shoppers are able to recapture and control their personal data and barter it in exchange for discounts from Brands as a native aspect of the shopping experience. Shoppers win when Brands understand what they love and are able to serve them with more meaningful, personalized retail experiences, and greater savings.

Our goal is to establish a thriving community of Brands and Shoppers that, for the first time, have complete control over the fair exchange of data and savings on their own terms. It’s difficult for one person to effect change in a huge industry, especially with such powerful forces in control, but hopefully, together, we can pave the way to the decentralized future of retail.

Originally published at medium.com on March 17, 2018.

Shopper Demand Generation Across Retail Environments

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At the demand end of the retail supply chain where advertising and marketplace experiences occur, there are a couple of key layers that sit between the brand and the shopper. Marketplaces, like Amazon and Walmart, and the networks that create demand against those marketplaces, like Facebook, Google, Adroll, and other social channels, have developed yet another layer of intermediation between the brands and the shoppers. These “bad actors,” as we like to call them, have perfected their monetization strategies against centralizing shopper data, hindering these brands from authentically connecting with those who desire to purchase their products.

Everyone has an opportunity for fair trade and a fair stake in the value that they bring to the supply chain, but inside of advertising and demand generation, I do think that there are archaic models that are being relegated into nothing more than significant consumer data strongholds. The owners of these strongholds continue to compound and re-leverage all that consumer data in order to abstract a brand as far away as possible from the shopper. Specifically, when social platforms look to move eCommerce experiences and more of the shopping funnel inside of their environments rather than facilitating a fair exchange with the brand around an attributable model driving against authentic shopper interest and demand, they continue to cheapen brands against KPIs or ad metrics that are incredibly inefficient. That’s an area that feels very brittle and I think that decentralization and disruption centered around the economic model of a brand, ie driving sales or net new transaction, presents a massive opportunity.

The data that is abstracted from shoppers across ad networks or social channels is significant. I’m not sure an individual shopper would be able to comprehend the amount of data that is stored “on their behalf” and then used against them as they are trying to move through the natural discovery process for products, services, and food that interest them. That level of manipulation under the guise of convenience is not only sustainable, but will only lead to withering out of culture and individual expression.

Centralization and the Brand-Shopper Relationship

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The relationship that brands and shoppers have is a dynamic one. Ten years ago it was much more of a linear, per channel strategy. A shopper would engage with a brand through products available at big box retailers as the result of a wholesale-retail distribution strategy. Alternatively, a brand or manufacturer would have an physical storefront where shoppers could come in to touch, try on, and test out products. The amount of insights that the brand would have about that activity would vary significantly based on what they were instructed to collect.

During this time, brands and manufacturers were managing product life cycles, forecasting, and developing trend analysis on rough quarterly-based and annualized numbers. When things moved digital, there was an opportunity for intermediaries to facilitate the transaction between a brand and a shopper based on new data attributes now on the table such as understanding shopping preferences about users and basic demographic information.

With the emergence of digital commerce, the primary strategy that dominated was one where significant big box retailers like Target or Walmart made meaningful investments to move catalogs online in order to facilitate these digital transactions direct to consumer. These became what we recognize today as modern marketplaces. Along those lines, brands started to grow competency in building their own digital commerce stores, known as eCommerce capabilities, standing up storefronts where they would have one-off relationships with a shopper coming into that digital environment.

For all the resources that very meaningful brands and manufacturers, like Louis Vuitton for example, have dedicated to ad spend and developing these capabilities, their ability to track individual shoppers to their standalone sites is extremely inefficient and cost-prohibitive compared to the activity that can occur in a marketplace. The modern state of retail is really that of intermediaries acting on behalf of the brands to facilitate the value exchange, leaving folks like Amazon, Target, and Walmart, sitting between the brand and shopper.

Brands are now almost back in the position where they’re operating off of very little data. How their products are performing in that environment, what kind of sell through rates compared to others inside of the product categories, the quality of their products, and return rates is very black-boxed. The relationship that brands have with these primary channels for online and/or physical distribution doesn’t return much insights, leading to inefficient production cycles and a mishandling of manufacturing, logistics and distribution-center activities. It blocks up the critical flow of data in the ecosystem.

For a shopper, they’re driven by price and selection. A lot of these marketplaces that allow for great brand experiences inside of this unified environment are perceived as helpful. These environments, typically much more technology friendly than brand-direct experiences, have really won. The network orchestration between that these marketplaces facilitate, the interaction models, and the data engagement tools that shoppers in have become the prevailing method.

The relationship that a shopper used to have with a brand has been regulated down to things like price and selection as opposed to any sort of authentic branded experience that would allow for a brand to capture and grow the subjective value associated with their product lines, their brand or the mental space that they may have shared, created or expanded upon with the consumer. Outside of that very myopic transaction, there’s very little to no information gathered by brands about any of the activity that occurs across channels.

Retail is Broken.

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Retail today is Amazon. The efficiency, ease of use and selection for Shoppers has afforded Amazon an unparalleled dominance in modern Retail. Additional marketplaces such as Flipkart and Walmart rely on centralized processes to create and deliver internal value returns. This value creation requires the maintenance of running marketplaces at a substantial cost of capital. With these costs comes an expectation of increased value to Shoppers over time, but where does this value come from? The current centralized ecosystem creates an inescapable obligation to continue to extract margins from Brands, the products they bring to the marketplace, and those most vulnerable upstream.

I believe a Retail marketplace can only be healthy and sustainable if it provides valuable economic engagements for both the Brands and Shoppers. The current landscape of Retail does not reflect this.

With an obligation to external shareholders driven by economically incentivized humans, these centralized marketplaces have developed a business paradigm that drives value extraction by leveraging the exchange that occurs between Brands and Shoppers in order to increasingly consume Brands’ margin and a Shopper’s time and money.

The combination of these strategies driving the centralized system and Brands’ unfortunate tolerance for margin extraction will eventually cripple the ability for a Brand to participate in the marketplace altogether. With this impending reality, existing retail marketplaces have enacted a strategy of margin extraction combined with the leveraging of all data concerning product and related shopper interaction. Holding a superior position in understanding what products will serve the demand Shoppers have, they bypass the Brands they claim to serve by manufacturing private line goods based on that data.

Once Brands have been removed across key segments, selection decreases, price manipulation strategies begin, and the trust that the marketplace once brokered is eroded.

In short, all seems lost for the Brands creating the experiences we desire and for the Shoppers looking for the style, quality, and selection a free market should offer.

WHY RETAIL NEEDS TO DECENTRALIZE.

As someone who’s contributed to this problem personally over the years through my work in eCommerce, I’ve since developed a personal drive to help reverse this trend. To that end, my team has begun building a new open-source blockchain-based protocol (The SHOP Protocol) that will help restore balance to the system by providing a collaborative digital commerce data exchange that supports the transfer of value across Retail, Grocery, and Services supply chains in the following ways:

1. Control Over Their Data: Introducing yet another centralizing marketplace would be extremely fatiguing Brands. Another entity collecting their data within a far too recognizable system of looming fees or alternative monetization tactics would leave them listless and disempowered. We can’t re-centralize their data for our independent intentions and benefit. The opportunity to standardize and organize their data within a co-op environment, one that is built on principles providing them the ability to monetize said data at every step, would only work within a decentralized ledger of data they own and control. Here, Brands maintain their existing independent systems while we maintain interoperability with those systems, allowing for them to move towards unleashing their data within our decentralized framework.

2. Control over the Marketplace: Committing to the scale of building a consumer retail marketplace would be irrational for us to pursue. There is a substantial difference in the level of effort it would take for a centralized entity to create all of the rules, business logic, product determinations and moves necessary to deliver on par with Amazon. However, if Brands have an incentive structure matched with permissioned control over their data, they can dictate said logic, determinations and rules via ‘smart contracts,’ and a reward-bearing complementary governance, thereby removing the need for a centralized organization to fund the humans and processes needed.

3. Product Lifecycle Management: Brands need to better understand a Shopper’s interest in their product to effectively optimize downstream change in subsequent product or product line development. Once they enjoy the benefit of owning their data and understanding how that data moves through physical and digital commerce experiences to reach Shoppers, these Brands will be well positioned to respond with more agility and accuracy as they grow. Practically, this enables brands to intuit to what products to produce next for greater success.

4. True Market Diversification: If we’re left with commoditized Brand value and generic product designs made by the broken retail marketplaces of Amazon, Costco and Walmart, we will continue to see people wearing Kirkland jeans. With the SHOP Protocol we’re not moving Brand and Shopper data down into a new database environment so that they can access it better. By storing their data in a distributed ledger where those who need access to it will be forced to operate off of permissioned datasets rather than ripping off and centralizing the value in the data. We’re shifting the leverage in the equation back to the key participants: the makers (Brands) of the products and people (Shoppers) who want them.

[But how exactly are we going to bring decentralization to the market? We find out in the forthcoming Part II of why retail is broken.]