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Retail technology vendor innovation: Cloudtags

What is Cloudtags?

Founded in the UK in November 2012 by James Yancey, Stephen Stuk, Ollie Bath and Mike Glass, all with backgrounds in digital optimisation and analytics, the company is providing new personalised technology services that can help retailers monitor consumer behaviour in the physical store environment.

What's new at Cloudtags?

It is fair to say that everything at Cloudtags is new. Having been formed less than a year ago, the company has set about securing retail contracts for its innovative system that sees customers given custom-branded tablet devices in-store to use as a method of enhancing their shopping experience.

Shoppers can use the NFC-enabled tablet to tap into more information about products during their shopping journey and, if they so choose, they can sign into their social media accounts and tell their friends which items they like.

But what is in it for the retailer? Well, it gives companies an opportunity to provide an innovative new shopping experience for their customers – a strategy all forward-thinking businesses in the industry should be trying to implement – but it also has the potential to help retailers learn about consumer behaviour while they browse the shelves and rails.

If the consumer chooses to provide their data – and it is optional (see the section What makes Cloudtags stand out?) – he or she is then connected to the retailer in a way that has never really been achieved before and can be targeted with offers and recommendations based on in-store activity.

Co-founder and CEO James Yancey, who is from the US, says that the system is effectively replicating what eCommerce sites such as Amazon do in terms of analysing user data to generate product recommendations, but in a physical store environment. The system, which uses the Google Nexus as a base model but incorporates Cloudtags' own technology, can also be tailored to each individual retailer, depending on their requirements.

“As far as we know we're the only company that is working with retailers right now to put custom-branded devices in the hands of consumers for use in-store,” he states, explaining that supermarket scan guns and department store wedding list scanners are used for very different purposes.

“We are actually coming up with a creative concept that is specific to in-store that can't be replicated elsewhere. We are blending the tech platforms with creative consulting and we are able to show retailers what the ideas are behind consumers’ tapping.”

Cloudtags is working with luxury retailer 3939 in London’s Shoreditch, as well as young fashion brand Drop Dead in the capital city’s famous Carnaby Street. Results from the latter have been put into a case study to really emphasise how the technology can prove successful.

During a 60-day test period which saw customers handed tablets to use during the browsing process in-store, Cloudtags added NFC tags to approximately a quarter of all products. Consumers were entitled to discounts by interacting with products in-store, and when they did they also benefited from extra content related to that particular item.

More than half of customers took the tablet, averaging 15 page views per customer, while there was a notable increase in sales and in the number of people actively engaging with the brand on Facebook. Drop Dead customers appeared to be keen to use the tablet technology to embellish a traditional shopping experience.

This has led to Cloudtags securing a huge retail name as its latest client, details of which will be announced shortly, and the company hopes that it is the start of the wider retail market using its technology to help bridge the divide between the digital and physical components of the new omnichannel retail world.

What makes Cloudtags stand out?

There are a number of tech solution companies in the market that anonymously track consumer shopping behaviour through smartphones, which can often scare retailers and shoppers alike, but Yancey says that the opt-in, transparent nature of Cloudtags has been one of the most appealing factors to the retailers he has spoken to.

When using the tablet device in-store customers have the option to use it without signing up to anything, which still provides the retailer with some useful aggregate data about consumer behaviour, but if customers do opt-in they know that they are creating a localised account with one retailer. Offers and recommendations can be sent via email once they have left the store, but only if they have agreed for this to happen.

“Throughout the experience or at the end of a customer’s shopping journey we ask, ‘do you want to save this data?’ explains the CEO.

“We give customers the value first and then we ask them whether they would like to save their behavioural data and add their email address to make things more personal the next time they shop. In doing that, they’re creating an account with retailer and Cloudtags, so communication can continue when they have left the store.”

Further innovations using social media and augmented technology could soon be on the way, too.

There is a lot of talk in retail circles about how best to use social media and measure return on investment in this field, buy Yancey suggests that the key element to investigate here is how businesses can harness what is best about social media online when in a store environment.

“You should be able to walk into a store and see all the products your friends have bought or liked and where they are in a store,” he states.

“We are optimistic about extending this to stores in the form of augmented reality, where customers can hold up a tablet and start to see what their friends have liked or bought. Everything I'm telling you is taking the best of what works on the web and translating it in-store.”

What the boss says...

Yancey says that a number of factors contributed to the creation of the Cloudtags concept. Although smartphone usage in-store is growing, he says that the number of people accessing retailer-specific apps while shopping is low – and, on top of all this, the “lion’s share” of retail sales are still conducted in-store.

When adding the fact that NFC usage via phones has been slow to get off the ground in luxury stores, partly due to the popularity of the non NFC-enabled iPhone in these circles, it meant there was a gap in the market for retailers to provide their own devices.

“Companies were all thinking about big data and looking directionally at offline/online/in-store,” he recalls.

“They were asking what are we doing when a customer comes into store, how are we treating them differently? They could never get a great idea, so we said let's explore the space.”

And Cloudtags’ appearance at the UK and Europe’s leading tech solutions show RBTE in 2013 apparently helped set the company on its way.

“We were selected for the Innovations Theatre at RBTE 2013, and going in as a start-up this was our first contact with brands in the UK,” Yancey notes.

“That was our tagline for our communications with retailers: ‘Cloudtags has been selected for the innovations theatre’. The companies we are working with now all received these messages – it was a good hook for the early stage and got us that initial meeting before the product did the talking for us.”