Retailetics ezyCart may transform shopping in 2021

  • Features tablet, barcode scanner, weighing scale, smartwheels and nano-coating
  • Subscription model means zero capex and ownership for retailers, attractive proposition

Manirajah Kulanthavelu (left) & Shaji Rajappan hope to drive value to both store owners and shoppers with their AI driven retail automation solution.

In 2020, where urban folk uncharacteristically stayed mostly indoors, the anticipation of shopping without restrictions is more pronounced than ever. The great digital migration has retail brands leveraging on online marketplaces, webstores and social media to give customers a seamless shopping experience.  But even with omnichannel retail offering a myriad of shopping channels, the pull of physical retail is hard to give up, primarily due to the touch-and-feel factor it provides.

Brick and mortar is here to stay and Retailetics, a retail automation solution provider, seeks to rejuvenate these businesses by injecting a dose of technology. Founded by Shaji Rajappan and Manirajah Kulanthavelu, Retailetics offers artificial intelligence (AI) solutions to retailers who want to give customers a frictionless home-to-store shopper experience.

Its solution comprises of three main components: the shopping list app, ezyList; the real-time data dashboard, ezyRetail; and the smart shopping trolley, ezyCart. The closest competitor they see in terms of technology and capability is Amazon’s Dash Cart.

“We know that retailers want to offer consumers a great experience every time they step into the store, but experience costs money, lots of it. We share the costs and risks by offering all our products on a subscription model,” explained Shaji, the co-founder of Retailetics.

Retailetics is not Shaji and Mani’s first entrepreneurial foray. Shaji founded Six Degrees, a software company offering enterprise customer relationship management in 2005. He exited in 2013 and two years later, founded customer experience outsourcing company, Captv8, which ceased operations in 2018. Meanwhile, Mani worked as a telecommunications senior executive in his past life before he founded Web Online, one of the earliest e-wallets approved by Bank Negara Malaysia in 2012. The product, Webcash was sold to Green Packet Bhd in 2016 and has since been rebranded to Kiplepay.  

The duo came together and started work on Retailetics in late 2018, funding it themselves with US$123,200 (RM500,000) seed capital. They then subsequently took a soft loan of US$246,400 (RM1 million) last Oct.

They considered applying for public grants but the amounts were too small and required too much paper work. So they declined.

“The common idea is that retail is dying and that people are buying online. That is not true,” says Shaji, pointing to Department of Statistics Malaysia data which reveals that online transactions only amounted to 4% of total retail in 2019. Although transactions surged to 32% during the Covid-19 movement control order (MCO), it has since fallen back significantly to 8%.

“In this part of the world, e-commerce is still very small. If we are looking at groceries, it makes up less than 1% of online transactions,” said Mani. “So we are going into a market that needs transformation and new ways of how the merchants can interact with customers.”

 

How does the Retailetics’ solution work?

While the world recalibrates to pre-Covid 19 normalcy, the timing is ideal for businesses to rethink the end-to-end shopping experience of customers. Although still in the pre-pilot phase, Retailetics’ ternary solution (ezyList, ezyRetail, and ezyCart) indicates real potential to change the status quo of grocery shopping. Due to the Covid-19 pandemic, the pilot has been delayed – twice. It is now set to begin in May with a few retailers.

To elucidate the problem afflicting grocery retail, Shaji paints a common picture: “As consumers, we have all experienced this – you drive to the store and find parking after multiple rounds, only to discover products in your list are out of stock or not sold at the store; or prices are not as competitive; or payment systems are down; or not all checkout counters are open and queues are too long. Some of us may never come back. Experience is the new currency.”

For shoppers using Retailetics, the first step would be to create a shopping list on the ezyList application. “EzyList is independent and store-agnostic, but it is integrated with the store’s inventory. When you use the app to plan your shopping, the shop’s ezyRetail interface picks it up,” explains Shaji.

Based on this customer-store data interaction, ezyList users will know which store carries the items they want and the respective prices. Meanwhile, the retail store is able to see the number of people within a certain radius that have added items to their lists. With this information in hand, the store can ensure popular items are stocked. Additionally, the ezyList app will allow retailers to promote items through advertising based on customer’s shopping lists.

But with app fatigue a growing reality, users’ reluctance to download yet another app is one of the first challenges for Retailetics to overcome. “We want to get into their first screen. So we’ve been working hard to add even more value by collaborating with partners like our retail customers, e-wallet companies and others to offer incentives and rewards to first time and regular users,” says Shaji.

Despite these teething pains, they are confident their solution will transform retail for the better. “This is what I call through and through digitalisation,” says Mani, highlighting one advantage e-commerce players have over retail merchants, ie the ability to engage with consumers based on the items they are browsing. “They have algorithms that know what customers are looking at. Based on that, they engage with customers and suggest promotions while they are shopping.”

Cognisant of the limitations of physical retail in advertising to shoppers within a store, Retailetics still hopes to address it. “When a user enters the items they plan to buy, ezyRetail captures that and aggregates demand. All participating retailers then have access to this general information and can plan how to manage inventory,” explained Mani.

While ezyList and ezyRetail are key to making the whole solution work, the star of the show is the shopping cart, ezyCart. The ezyCart is a shopping cart supplied by Retailetics that is outfitted with its proprietary technology. The tablet device installed at the handlebar section features barcode scanner, object recognition and allows for cashless payment.

That object recognition requires an incredible amount of detailed data capture of each item on the shelf. For example, Retailetics takes over 100 photos of each product a store carries in order for its machine learning algorithms to have sufficient data to build models that enables the product to be recognised and validated when it is added into cart. “That really is the most tedious and time consuming part of our technology. But the good news is that once we have a product in our library, we don't need to do it again,” explains Mani.

The base of the cart basket is fitted with weight sensors to keep track of non-scanned items added into the cart. At the same time, Smartwheels prevents the cart from being removed beyond the retail premises’ perimeter. Taking into account the pandemic, the ezyCart is also nano-coated to keep it virus and bacteria free for up to 12 months.

Beyond these features, the ezyCart constantly communicates with beacons installed throughout the store. “Each cart has an ID. The beacon transmits signals and constantly tells us where you are via Bluetooth from the tablet. That’s how we’ll know which shopping aisle a customer is in.”

The product finder technology works by informing the customer which item from the list to pick up at each aisle. “We can also add on advertising by manufacturers based on the aisle section the customer is in,” says Mani.

 

What makes Retailetics’ solution more cost-efficient for retailers?

Digital transformation for retailers can be costly affairs with high capital expenditure on devices and technology. “We make [execution] really seamless. There is zero capex. The total cost of ownership is zero. There is zero integration, really, except for your inventory data. There is zero risk because the cart belongs to us,” Shaji emphasises.

Retailetics is offering a subscription model at RM70 per month per cart. At this price, recouping costs would be a challenge. But Shaji and Mani are in no rush and are looking at monetising the business through advertising and data. “We have some of the top advertising companies in Malaysia that have already expressed interest in our anonymised data,” shares Mani.

For a start, Retailetics will deploy 30 carts to four retail stores in Malaysia and perhaps 10 carts in Thailand. “We have signed up a partner in Thailand who will give us support by dealing directly with the retailer,” said Mani. “We expect to conclude the pilot by April 2021 and, henceforth, straight to commercialisation.”

The biggest challenge for Retailetics is convincing retailers that a moving point-of-sales (POS) system can engage consumers the way they want to and is going to become the reality. “That has been our biggest challenge so far, in Malaysia. But not in Thailand, Philippines, Singapore and Indonesia.”

The edge that Retailetics offers over most self-checkout technologies today is the engagement factor. “Customers in a store is what marketers call captive audience. Only retailers have that opportunity. Yet, retail marketers are not able to fully optimise the opportunity. They are not able to proactively engage you or sell you more items that you need as you walk through their aisles. Yet, the fact is, you can sell more to shoppers if you can talk to them. We can. None of today’s self-checkout tech can do that as effectively as we can, or hope to,” shares Shaji.

As far as shifting consumer behaviour goes, shoppers are always looking for the next big thing. “In fact, that is what most of the retailers we have met say to us. They are drawn to the fact that we would be an attraction to their shoppers.”

 

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