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What are some ways to transfer money/value to retail buyers when you have no POS access?

Let's say you had a service where third parties (e.g., a brand) want to provide value (discount, a free product, rebate, etc.) to a retail buyer in a store. Let's assume that this retailer does not have the interest/capability to integrate anything directly into their POS and don't want to send in coupons for redemption. That is, take the retailer out of the equation. Assume that any customer that wants to participate will have our app.

For example, say I'm SocksPlus - a leading manufacturer of 6-toed socks. I want to offer 20% off to anyone who purchases at least 3 pair of socks today. Are there any low-friction ways to transfer a proof of purchase and to receive the 20% back? I don't think it's reasonable for someone to scan their receipt, email it to SocksPlus, for them to read it, cut a check and mail it to consumer.

The best I've been able to come up with so far is:
* Create a currency/point system
* Allow third parties to create promotions in our environment
* Promotions are delivered to buyers in-store
* Buyer emails or scans receipt to us
* We use a mechanical turk to validate authenticity (e.g., to ensure people didn't create a bogus receipt - this is a risk area for sure)
* We award X points to buyer (and invoice third party)
* User can redeem points for fabulous gifts and prizes (or just cash)

Any better ideas?



18 Replies

Ken Woodruff
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Ken Woodruff Entrepreneur • Advisor
Software Architect
If the merchant's POS accepts bar coded coupons you could create them "on the fly" and simply scan them straight off the consumer's mobile device (ala http://www.retailmenot.com/mobile/).
Paul Bostwick
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Paul Bostwick Entrepreneur
Researcher and Self-Employed Product Designer
How am I going to get anything done while wondering about 6-toed socks? really? I'll believe you that you are the leading manufacturer of them But 6 toes Help a guy out! -paul
Rob Gropper
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Rob Gropper Entrepreneur
Director at PetHero, SPC - Member at Eastside Incubator - Principal at Tuxedo Technologies Group
i don't have experience in retail/POS. One interesting model that may give you some ideas ishttp://chinookbook.net/ I've not studied their model - looks like pretty straight up mobile coupon app. With their model i think the retailers who participate (provide coupons) also sell the book and mobile app on site - hard copy book is $20 and mobile app is $15. i assume that ChinookBook shares some of that revenue with the retainer (customers pay the retailer on site for the book/app). A % of the revenue goes to causes i support (my kids sell the books to raise money for their school) . customers redeem coupons simply by showing the coupon on their phone to the retailer. i think it is a simple 'redeem' button - no codes or integration for the retailer. i forget to use mine. a geo-located reminder might help me get more out of it. If i'm walking past the sock store and socksPlus reminds me that i have a 20% off coupon i might just take the time to buy some 6 toed socks. might drive me into the store i might otherwise walk past. No POS integration, no emailing my receipt. for my $15 upfront i get a pile of coupons - hundreds? The coupon is as good as cash. once i or the retailer hits the "redeem coupon" on the screen of my phone that coupon is gone - done. Seems like some opportunity for fraud too, but that's another conversation. Socks plus would still need to recruit retailers and aggregate coupons, but they would need to recruit retailers anyway.



Michael Brill
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Michael Brill Entrepreneur
Technology startup exec focused on AI-driven products
I think that's a bit of a different model because it requires the retailer to participate (in every case except for supermarkets that have a mature coupon redemption infrastructure). Maybe I need to make it more real... my first vertical is retail wine buying advice (walk into a store with 2,000 SKUs, what in the world do you buy?). The model is such that the retailer or any third party can create "advisors" that guide the shopper's experience. I adding promotions such that a retailer can create experiences for visitors that take them through the store with a bit of education, a bit of entertainment and a whole lot of cross-selling (wrapped up in flag of 'advice'). It recently occurred to me that third parties such as distributors that represent multiple wines and wineries/winery groups may have the same interest in promotion (buy any 3 Red Mountain Cabs before 1PM today and get $20 back) regardless of where the wine is purchased. So entities up the supply chain can have a much greater impact on shoppers' behavior than before. Retailers won't generally object to this, but I can ramp up much better if I don't have to convince 12,000 wine retailers in the US to play ball.
Anthony Zeoli
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Anthony Zeoli Entrepreneur • Advisor
Digital Strategy and WordPress Consultant and Trainer
Seems to make sense that you can:

1. Advertise your rebate (shouldn't be a discount, because it's not happening moment of sale, should be a 'rebate') on the printed packaging
2. Instruct the user to download the app to get the rebate
3. Have the user login with Facebook (or Twitter or G+) and make them verify themselves in some way, that way you get their email address and can market to them
4. Scan the bar code with the app
5. Once the bar code is verified, tell the user they are approved and then ask for their address
6. Send the rebate to the address
Paul Bostwick
1
0
Paul Bostwick Entrepreneur
Researcher and Self-Employed Product Designer
Assuming you cannot put individual code numbers on the labels (and cancel them as they get submitted) Maybe you could have customers snap pictures of the bottles (in this case) defaced somehow so they cannot be resubmitted. Sign the label? Tear it? Somewhere in the fine print is a "you have to be able to show proof of purchase upon request" and figure some will sneak by (others will over play it and you'll catch them) but most will just enjoy the reward. If the reward is more product or samples of related product then that should keep the gaming down a bit. If this does not work out do not go into the six-toe sock biz. Too early.
Michael Brill
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Michael Brill Entrepreneur
Technology startup exec focused on AI-driven products
Thanks guys.

Anthony, Paul: these promos are completely dynamic and so no way to incorporate content on packaging. Also, how do I know they bought the product(s)? They walk into store, scan and leave without buying. I guess the other scenario is that they scan, purchase, rebate and return. So even if I required them to send in a copy of the receipt showing the product(s), it can still easily be gamed and would probably be a deal-killer to those that are offering the promo. Not reasonable to ask them to soak off label and send it in!

Maybe no way to do promotions without retailer involvement. I guess I could provide an app/site the retail authenticates to and generates a short code they give to buyer at checkout and then buyer sends code and image of receipt... that's pretty janky though.

Wait, how about this... the user selects the promo they want in our app. They go to checkout and show the retailer the app which displays a short code (3 digits/letters). The retailer (who is authenticated as the retailer into an app/site) merely types that 3 letter code in. The app shows the checkout clerk the requirements and if met they click OK. There still exists the possibility that the user returns the products and keeps the rebate but that's likely a low incidence with relatively expensive wine.


Anthony Zeoli
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Anthony Zeoli Entrepreneur • Advisor
Digital Strategy and WordPress Consultant and Trainer
I think scanning the bar-code once and putting that scan in your DB eliminates multiple scans. Yes, you can also scan the receipt, but then that's a human resource issue to get someone to reconcile receipts against the scan of the bar code. With a proven receipt from a major retailer or whoever you know you work with, then you can send the rebate. You idea puts the onus on retailers to do something very specific for you in their POS system and their are many different POS systems that are third party, so they would not adopt your idea into the system, because its a limited use case. Providing some additional connected hardware is also a non-starter, because of the cost of developing the hardware and putting in the hands of all stores. That's space on their counter that they might then charge you for, like a rental fee or something. Plus, hardware breaks and you have to service it. Bad idea for something this limited in scope. I'm not sure if you've seen these PDF scanners for iPhones. I use one all the time for scanning things now. I also scan things into Evernote. I really think that instead of trying to find the perfect solution, sometimes providing a solution like simply scanning the bar code and receipt in your app with a Facebook, Twitter or Google+ login will give you a level of barrier to entry that you are seeking without getting scammed by everyone trying to post a scan. First, you can only do it once and if you login with Facebook to do it, then you've got that login and you can say to the person they've already submitted at that Facebook account. With barcodes, aren't they exactly the same on all items? So, that point is moot. The bar code wouldn't work. You'd have to create your own code for each pair, but they're already out there. You could send stickers for your products to each store that are serial numbers for each item and ask them to put the sticker on the packaging. That's a little bit of work, but better than bar codes that are same.
Rob Gropper
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0
Rob Gropper Entrepreneur
Director at PetHero, SPC - Member at Eastside Incubator - Principal at Tuxedo Technologies Group
If you want to avoid 'gaming the system' you need to close the loop. that sounds to me like the retailer needs to buy in. If it is others further up the supply chain who will be driving the promotions then you need to touch them, but they can get buy in from the retailer. big job either way. In the use case of the distributor driving the promo then obviously there is financial incentive for the distributor. If you can help him/her drive sales then you can geet their attention, but the friction for them needs to be low - not news to you i'm sure. from what little i know about wine distribution it seems to be pretty relationship based. sounds like you need to find 'a guy' who works for a distributor and kick this around with him/her.
Michael Brill
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Michael Brill Entrepreneur
Technology startup exec focused on AI-driven products
Anthony... I don't disagree with what you're saying but it's not feasible to put unique codes on bottles... and the majority of wine SKUs in the US don't even have bar codes.

Rob... while this topic of third party promos is interesting, it's really not a core requirement for what I'm doing - simply injecting buying advice to retail customers in-store is sufficient value for now. If I could find an easy-ish way to do it then great; if not then that gets pushed down the roadmap. One other possibility is to integrate with POS vendors but I'm nowhere near that as I don't even know if it's possible to disaggregate the selling and fulfillment parts of retail like I'm trying to do.

So I think I'll start with promos simply enabled for the actual retailer. Third parties can create the same type of consumer experiences but initially won't have any promo support. Distributors are definitely interested but they know zero about technology. They're fat and happy and have plenty of money to throw at this... just need to figure out a good way to extract it!


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