If a Mannequin could speak what would it say?

5 shirts for £100. What else?

Mannequins have long fascinated a certain type of artistic individual. For example, nobody alive in the 1970s will forget the Kids from Fame and this forensic exploration of the links between the human and material worlds.

But what if mannequins could really talk? A London-based manufacturer of retail furniture has given them the power of speech. Well, sort of.

Iconeme (a spin off from Universal Display) has attached iBeacons to manniquins in three stores – Hawes & Curtis in Jermyn Street, House of Fraser, Aberdeen and Bentalls in Kingston. The beacons broadcast a unique number via Bluetooth. If you’ve downloaded the Iconeme app, then once you’re in range, your phone pings with a message of some sort.

Future of retail? Or another opportunity for spam? I’ve written about the theory and pitfalls of iBeacons before. So, I was excited to try the service out at Hawes & Curtis (my favourite shirt shop) and here’s what happened.

About ten yards from the store (see below), my phone vibrated with a message.

Hawes & Curtis, Jermyn Street
Hawes & Curtis, Jermyn Street
Iconeme message from Hawes & Curtis
Iconeme message from Hawes & Curtis

Okay, the message was a bit long but I understood the sentiment and clicked on it and was taken to a screen within the Iconeme app. This highlighted the four outfits on display in the shop window.


Clicking on the outfits, gives the opportunity to “shop the look.” The squiggles on the right of the price tag are options to (1) ping to the product page on the Hawes & Curtis website….


(2) discover where in store the product can be found….


(3) share the product with friends via a 188 (??) character tweet.


That’s it. The dialogue is one-way and there’s no opportunity to speak back to the mannequin or to Hawes & Curtis. But then, I was in a shop and could very easily speak to the shop staff. And I’ve never shared Leroy’s obsession.

Of course, the service only worked because I’d signed up for Iconeme earlier and given permission for it to send me location-based notifications.

The download and registration were pretty straight-forward. The app only asked for my age, sex and measurements.



I’d expect future versions of the app to request more detailed personal information including post code and any loyalty scheme info for participating stores.

The app then gives you a chance to control the spam.


The T’s and C’s need some work. Try reading this on an iPhone.


Likewise, the privacy policy. I just clicked “accept” but I haven’t the slightest idea what I agreed to.



This is a novelty right now but, used wisely, this technology could be of great benefit to shoppers. I love Hawes & Curtis shirts. If I’m walking past a store, there has to be something useful the brand can say to me. Especially if they’ve managed to tie in my previous purchase history. I also like the idea of having a single app that I can use to control messaging from a number of different retailers.

It’s interesting that it’s a mannequin manufacturer that is commercialising the service. Universal Display has relationships with most brands on the high street and the incremental cost of the iBeacon is negligible. Their challenge will be to quickly gain credibility with their clients’ digital marketing teams. Nevertheless, Iconeme has give the user experience some thought and have produced something that is both low touch and engaging.

There remains, of course,  a risk that the technology will not be used wisely. Sending notifications is costless and marketers may very well  abuse the privilege by sending large numbers of irrelevant messages. Just as they do with email.



WorldPay reveals £23.2m price tag for YESpay

WorldPay’s 2013 annual report reveals a hefty £23.2m price tag for its acquisition of YESpay – a UK based payment service provider specialising in providing managed services for retailers.

WorldPay bought YESpay primarily as a core technology platform to power WorldPay Total – a payment service that integrates card machines into its customers EPOS software and WorldPay Zinc, its m-POS product. YESpay was acquired in March 2013 but would have contributed £4.9m revenue and £0.1m PBT if it had been part of the group for the full 12 months.

WorldPay paid £17.6m cash and estimates a further £5.6m in deferred payments to YESpay’s founders– Chandra and Rohit Patni. This puts a value of 4.7x sales and 232x PBT on YESpay although the earnings multiple falls to “just” 46 if you calculate it on EBITDA. That’s because within that £23.2 purchase price there is a chunky figure of £22m for goodwill.

This hefty valuation is good news for owners of the few remaining independent payment service providers left in the UK. The Logic Group (£18m revenue), to name but one.


An EPOS valuation that makes you go “Mmmm”

A new cloud-based iPad EPOS business called Shopwave is raising money on CrowdCube.

Shopwave claims just 50 locations live but is 45% of the way to raising £200K for just 6.7% of the business. This gives a valuation of £3m.

In stark contrast, K3 bought Retail Technology Ltd last month for just £800K. This was for a solidly profitable EPOS business that’s been trading for years and has 180 customers.

Shopwave is currently burning £5.5K per month and reckons it will need another £1.5m cash in 2015. With this investment, it forecasts 2016 revenues of £8m with net profit of £1.6m.

Let me share some more numbers with you.

Cybertill was first into the cloud EPOS market in the UK. It’s an exceptionally well run company with solid technology and wide distribution. In ten years, it’s got to £6m turnover and £380K operating profit.

There are solid profits to be add in this corner of the retail technology market but it moves slowly. The customers are very conservative and most already have a functioning EPOS of some kind. Churn is low.

To Shopwave’s credit, it is bringing a very open approach to EPOS and highlights its ability to easily integrate any 3rd party applications its customers may desire. Retailers will like this just as much as they dislike the stiff development fees charged by Micros and friends. But it’s not unique. Clover is building a retail app store (see earlier post) and has First Data’s millions behind it.

Beyond Clover, there’s a multitude of well funded competitors coming over the hill with similar pitches about transforming retail with iPad EPOS. How about Vend ($30m in the bank and just setting up in the UK), Lavu or Revel? Then, there are the e-com guys building EPOS on the back of Magento like Ebizmarts which will likely hoover up the small but ambitious multi-channel retailers.

Caveat Emptor.

K3 buys Retail Technology Ltd. Risk for little reward.

It’s interesting to see K3 make another acquisition in its apparent quest to corner the UK market for Microsoft-based point of sales software.

K3 has bought Somerset based Retail Technology Ltd for £610K, a multiple of 0.8x sales and 4x prospective 2014 pre-tax profits. It will add an underwhelming 2% to K3’s retail turnover, which was £39m last year.

On the positive, RTL does build its solution on Microsoft just as K3 does. There is clear synergy here and RTL may have developed some proprietary code that has wider market use, For example it has the necessary integrations to Clarks for vendor-managed inventory.

And there looks to be plenty of scope for cost cutting too. K3 generates £100K sales per employee while RTL produces just £22K; indicating both a certain lack of process automation and remarkably low salary levels.

So, the purchase should be earnings enhancing but it does also pose some questions.

Firstly, you have to wonder about the strategic fit of the new business. K3 has done well moving upmarket and has announced wins with Charles Tyrwhitt and Ted Baker. Yet, with RTL it has bought 180 independent retail customers generating an average of just £4400 revenue each. These customers risk becoming an annoying distraction from the core strategy.

Secondly, the acquisition will also bring some partner challenges. RTL has a well-developed network including Shopify for e-commerce and bLoyal for loyalty. K3 will need to keep these relationships going (existing RTL clients will insist on this) but has its own solutions.

Maybe the plan is to cross-sell K3’s e-commerce and CRM tools to the RTL base. Maybe not. Either way, this acquisition adds complexity for very little top line benefit.

How to Ensure Retail Tech Labs are Successful

Tesco, Marks & Spencer and John Lewis have all announced the creation of technology laboratories. From the technology vendor perspective, here’s my ten recommendations to retailers to ensure success.

Be clear on your rationale. Are you looking to for a place to pilot new ideas you’ve already decided to roll-out? Or a demonstration facility to help convince senior management to invest more in technology? Or even skunk works for your own technology teams to showcase new ideas? Whichever, make sure you know what success looks like and wrap this up in a Charter which you can share with suppliers, technology vendors and your own staff.

Build your own use cases. You know your customers better than anyone else so get your teams to set challenges for the lab, such as improving certain processes or finding cheaper or more exciting ways of reaching customers. Resist the temptation to ask your vendors for new ideas or you may just get recycled innovation from their other customers.

Give your existing suppliers first crack. There are plenty of sexy start-ups in retail technology but your own vendors know you best. Give them first chance to show you what they can do.

Don’t be greedy. You’re probably asking vendors into your lab and expecting them to work for free so as to make you (and them) look good. There’s a temptation to charge an additional fee for access to your brand and customers. One retailer even once asked me for a royalty on all future sales. Don’t give in. Make sure you’re working with the right vendors, not jut the ones prepared to pay.

The value of investments can go down as well as up. The vendors you bring into the lab may pitch you an opportunity to buy equity. Just say no. You’re expert in buying technology. Investing in it is quite a different game and best left to the professionals.

Spread the love. Labs are hard work and suck up resource from your vendors as well as other teams in your own business. Be generous with praise and reflected glory. Put videos on YouTube with name checks for the people involved, enter awards and give testimonials. You want the best and brightest to work with you rather than your competitors so show them you care.

Get a high traffic location. The lab needs a wide audience so it’s best located at head office or a major store near a railway station. If PR is what it’s about, then London has overwhelming advantages.

Be clear what you’re testing. However tempting it may be to replicate a fully functional store, think carefully about integrating demonstrations to your live systems. Often, there’ll be a cheaper, quicker and less risky way of proving the same point.

Local tech support. Wherever you put it, the lab will need onsite support from technicians that know what they’re doing. Innovative stuff goes wrong more often and your integrations will be pretty basic and unreliable. You don’t want everything failing when the CEO comes to visit. It’s happened to me and it’s not pretty.

Guard your staff. Technology vendors pay better than retailers. Make sure your best people are happy or in the heady and innovative laboratory mix of business and technology, your suppliers may pinch them.

An edited version of this blog first appeared in Retail Week (££).

Call yourself a marketing director?

B2B marketers are fragile things, always fretting that their CEO doesn’t understand them and perennially downcast that they don’t have a seat at the top table in their organisation. B2B conferences often turn into group therapy sessions searching for ways to “make marketing relevant” or “show the value of marketing.”

Trust me. If you were really doing marketing, you wouldn’t be asking these questions.

Peter Druker rather pithily said: “There are only two things in a business that make money – innovation and marketing, everything else is cost,” but what he means by marketing and what many B2B marketing directors do for a living are often two rather different things.

Leafing though a pile of job specifications for marketing directors underlines that in many businesses the most important marketing tasks are actually done by someone else in the company.

  • The most important P is product. Who decides which new products are developed and launched? Most likely it’s the product director not the marketing director.


  • Next comes price. Well, I’ve been through a dozen job specs for B2B marketing director roles and I’ve not seen price mentioned once. Who compiles and signs-off the price list? Probably the product director in conjunction with finance and sales.


  • Place. Who decides the distribution strategy, the channel mix or the overall business model? That’ll be the sales director although the marketing director may be told to recruit and retain a partner network.


  • Promotion.  Absolutely.  A core task for any B2B marketing director is to take a given product, a price list and a distribution strategy and go generate some demand.

Frankly, if you don’t decide product, pricing and distribution, you’re not actually in charge of marketing for your company. In which case, your title shouldn’t be marketing director but rather head of communications and campaigns or similar.

Chances are, your boss is taking the big marketing decisions. And your boss is typically either sales and marketing director (almost always a sales professional) or a product and marketing director (usually from a technical or consulting background).

My conclusion. Stop whinging that you’re not being taken seriously by your CEO and start thinking how to get your boss’s job. That probably means taking a step sideways first of all, either into sales or product. Then you can step up and start taking the big marketing decisions.

Meanwhile, as David Packard said, “marketing is too important to be left to the marketers.”

Clover opens a new field for First Data

An unexpected delight at yesterday’s Retail Expo was the debut of Clover – a new EPOS product for SME’s. Clover was acquired by First Data – the world’s largest payment processor – in 2013.

The SME EPOS market looks large at first sight; there are over 140.000 retailers in the UK and a number of large technology companies have tried to exploit the lucrative potential of a “shop in a box.” But each has failed in the face of stiff competition from a  Darwinian array of niche EPOS vendors specialising in everything from dry cleaning to funeral parlours. These businesses (often set up by ex-retailers) have spent years honing their software to an exact fit of their customers needs which, up until now, has made the provision of a “shop in a box” pretty much impossible. Retail sounds to management consultants like a single customer set but it’s not.

This may be about to change.

The roaring success of Square in the US has drawn a number of big players into the market for in-store technology. The idea? Provide a generic EPOS system that includes hardware, payments and a basic stock/table management with a set of open API’s. Then get the Darwinian niche guys to rewrite their software as applications provisioned through an app store. The retailer gets the right software for their business but with the advantage of service delivery from a global giant. And the niche software vendors can focus on their customers’ needs and not worry about operating systems, cash drawers, payment service integration and all the annoying, low margin stuff they have to supply to make their software work.

Even better for the retailers, this model will encourage 3rd parties to integrate their services with the core EPOS and payments processes. These could be loyalty schemes such as Nectar, mobile wallets, tax free shopping services, people counting systems, table booking applications and so on.

EPOS integration is really hard right now. There are thousands (yes, thousands) of EPOS vendors in the field. Most want to get paid for writing integrations and don’t publish API’s. Worse, even when you pay them money, integration to 3rd parties is often so far down the development queue that nothing ever gets done. I know this from bitter experience, having sat on both sides of this particular fence.

So, turning EPOS into a cloud-based app delivered by a large player committed to open API’s should be a winning strategy. How does Clover measure up?

What I like

  • This is a good bit of big company innovation from First Data. Its core business of payment processing is low growth with declining margins so it makes a lot of sense to find other products that would be attractive to its customers. EPOS is one and the strong linkage with payments gives First Data a right to play. It was the only merchant acquirer exhibiting at the Retail Expo. Clover makes First Data relevant to the sector.
  • I also like that they have bought rather than built the capability. There’s no shortage of start-ups focusing on retail technology so there’s no sense in writing your own code.

Clover EPOS

  • The Clover package looks lovely. It’s a very sleek, Apple-style, white with beveled edges and a very attractive sleekness. The package includes touchscreen tablet, cash drawer, scanner, printer and even weighing scales. The UK version features a desktop or mobile chip & PIN machines.

Clover EPOS Screenshot

  • The touch screen tablet is proprietary and runs Android. Out of the box, it comes with a fully featured EPOS system with basic inventory management, employee clock in/out and table management. I visited one triallist, Café Vergnano in London. The staff were delighted with the system although they were adamant that Clover worked on an iPad. Such is the power of branding.
  • Set up is really easy. You just need to plug it in and turn it on. No gold build.
  • It is resilient. If it can’t get an Internet connection, you can still trade although you won’t be able to authorise card payments.
  • Clover is properly built for the mobile age. Running the apps on Android means that they should be able to run on other devices, liberating the staff from the tyranny of the till point. Elements of functionality could be decoupled and run on the customers’ phones too.
  • The analytics look good and are accessible from any device and (again) are built to look good on a mobile.
  • The app store is still in beta so not offering much yet but strategically it absolutely the right route.

But there are some challenges…..

  • Firstly, Clover is commercialised by First Data, a company that knows a lot about payments but very little about retail or hospitality compared with the established players. To succeed, there will need to be clear, consistent and long lasting commitment to this proposition; not just a quick sales and marketing campaign.
  • The UK proposition will need to be managed in the UK with its own development budget. Retail is a local industry everywhere and EPOS doesn’t cross borders. Localising product management is often a challenge for US based multinationals.
  • Payment services typically represents a fraction of the lifetime revenue of an EPOS deal. The business value is in the software and that is what customers will pay for. If First Data goes into this market with a primary focus on pulling though payment business rather than delighting its customers with the best EPOS in the UK, it will fail.  It will need to start thinking like an EPOS vendor, not a payments company. A good start would be to cease referring to its customers as merchants.
  • First Data will need to retrain its sales team. I understand that it currently has 8 sales reps working on Clover in the UK but has plans to ramp up significantly. Shifting card machines is about negotiating around a price list; selling EPOS requires an often-lengthy discussion about the client’s business processes. It’s different and the existing sales team may not have the right consultative skills.
  • First Data needs to get to scale rapidly. If only 20 customers in the UK use Clover, developers will ignore the app store, if 20.000 get on board, there will be a stampede. The more customers, the more apps, the more value created for everyone.
  • There’s no e-commerce option at launch. This may soon come through the app store but is a major gap in Clover’s capability right now.
  • The plan is to integrate a chip & PIN reader into the touch screen unit. In the meantime, First Data is spoiling the beauty of the solution by connecting it to a not-very-attractive card machine. At least the payment device is branded First Data not Clover so putting some emotional distance between the cool and not cool elements of the solution.
  • Clover will retail at  about £1000 one-off or £90/month. This includes all the hardware and basic EPOS apps but merchant services are extra. The one-off fee compares favourably with a typical £1200 – £1500 charged by an established EPOS vendor but the monthly charge out of line. The subscription model should be the preferred option for First Data so I would bring that down a notch.
  • I worry about whether the white will keep clean in a typical retail environment. A fashion boutique will wipe it clean but in a busy café Clove will quickly attract the grime.
  • Finally, it’s not clear that there is a First Data sized pot of gold in this market. Cybertill – the pioneer of cloud based EPOS in the UK– is a dynamic, well run company with an excellent product set.  Cybertill has been at this since 2001 and has just reached £6m turnover. That’s not enough to keep First Data in biscuits.

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