Shelfbucks – Innovation in Mobile In-store Marketing


Erik McMillan, Founder and CEO of Shelfbucks states right out, “Beacons by themselves are worthless.” This from the head of a leading in-store mobile marketing company.

McMillan has been working on the issues related to in-store digital marketing and promotion for about six years. He states that he had an “Ah ha” moment back in 2010-11, when he realized that “a mobile app could sense a mobile device without any prior pairing between the two.”

He went to some of America’s largest retailers – who were already customers for his mobile app development company BestFit Mobile – to discuss the concept of enabling the stores’ apps to communicate with customers, in-store.

He found a lot of interest from the likes of Walgreens, Walmart, Target, Home Depot, etc.

This was the pre-iBeacon era. iBeacon was announced in September 2013 (and we first wrote about it in December of that year.)

Getting Into The Store – Point Of Purchase (POP) Displays

McMillan, via Shelfbucks, began focusing on the issues surrounding in-store marketing. One of his key realizations had to do with printed display material for in-store promotions.

These include various signages including the type of counter-top, point of purchase (POP) displays that are so familiar.

The company found in working with a partner, Menasha Corp., that a stunning ~50% of prepared printed marketing materials never got used in the stores. This was due to myriad circumstances, e.g., timing inappropriate, not the right store for the particular display, oversights, etc.

Menasha describes itself as “the industry’s largest independent, retail-focused packaging and merchandising solutions provider.” According to McMillan, Menasha ships about 30 million pieces of in-store promo material annually.

Digital Sensors – At The POP

The Shelfbucks solution for this issue of non-use was to embed a digital sensor (not a beacon, by the way) into the printed promotional material. The sensors have several capabilities and include radios.

As McMillan explains, this provides answers to key questions and additional capabilities:

1) Physical. Did the material get to be set up on the selling floor; how long was it there?

2) Shopper Analytics. Shelfbucks can embed software in the retailer’s mobile app to derive information on the digital shopper: e.g., how long were they in the store; how often do they come; which product areas do they frequent, etc.

3) Sales Promotion. Shelfbucks provides capability to interact with customers who have the retailer’s app. This can be done through either the familiar push messages or through customer opt-in, another area where Shelfbucks appears to be a pioneer (discussed further below.)

Menasha highlights its partnership with Shelfbucks, stating:

“Our partnership with Shelfbucks reinvents in-store merchandising by creating the industry’s first Smart POP Display. Smart Displays deliver a digital in-store platform that positively impacts sales and the shopper experience by leveraging existing POP merchandising processes.”

In February 2016 Shelfbucks announced an expansion of its penetration of the smart display market via a partnership with another significant provider, TimBar Packaging and Display.

In-Store Digital Marketing Solutions

Shelfbucks is addressing the area of in-store digital marketing in a broad sense, beyond the POP solution. Initially, the company started using beacons supplied by Gimbal, however, they found that they needed more customization in the types of sensors that were needed for specific solutions.

They developed the desired capabilities in conjunction with another partner, Emmoco, which Shelfbucks eventually acquired, as of January 2016. Emmoco specializes in building customized Bluetooth Smart products (Bluetooth Smart is the marketing name for BLE, Bluetooth Low Energy.) Emmoco features its own BlueJoule platform and utilizes TI CC2640 wireless MCUs (micro controller units) to provide efficient, low power consuming, high speed devices, largely for the IoT (Internet of Things).

McMillan points out that the Emmoco acquisition allows his company to fully integrate all aspects– including “the entire IP and technology stack from hardware, firmware, mobile SDKs and hosted server APIs” – into their retail digital solutions.

Retail Digital Marketing – Customer Opt-In

Digital in-store marketing is still at an early stage of the learning curve, which McMillan acknowledges. He has interesting insights into the issues related to “push” notifications versus “customer opt-in.”

From the earliest uses of in-store messages it was recognized that it is easy to annoy customers and even actually interfere with their making a purchase, if too many messages and too much information is beamed at them just because they are near a beacon or other emitting sensor.

Since mid-2014, Shelfbucks has been working with game retailer, Gamestop (over 6,900 stores in 14 countries, about an $8 billion revenue company.) Shelfbucks has been providing a beacon-based mobile marketing solution. The beacons are situated on shelves with product displays. A user with the retailer’s app holds their smartphone close to the beacon and can receive information about the products and promotional rewards.

A trial that started in 36 stores was extended to 150 stores in early 2015. McMillan emphasizes that “customers don’t want to be spammed.” He believes that “letting the customers guide themselves” will be more successful and will result in a higher conversion rate than push messages.

We asked him whether the Gamestop trial might be more effective because the game customers were a younger demographic that might be more apt to take the initiative to interact with the system. He said that was possible but noted that in an installation in a drugstore with a varied demographic range of users, it was the older users who were most concerned when the system was removed, because they wanted their coupons.

Security and IP Protection

We were interested in the level of security that the Shelfbucks system must demonstrate. McMillan told us it was extremely high. The company actually employs a director of security and is going through multiple audits and seeking compliance certification under standards, such as PCI DSS (Payment Card Industry Data Security Standard). This is necessary even though they never get involved with any actual payments or payment information.

The company does maintain a content management system (CMS) in the cloud which gives access to data about and for customers using the in-store apps. The cloud is maintained primarily on Amazon AWS.

How about IP protection? McMillan told us they have “more than 10 patents.” He emphasized that “putting a working, low cost sensor into a display is not trivial.”

Outlook, Bottom Line

Shelfbucks has raised considerable financing, including a $6.5 million round in late 2015. They are expanding from a base of 12 people.

McMillan appears to us to be very realistic in appraising the state of the business. We pointed out the types of operational difficulties encountered in getting largescale installations of in-store digital marketing systems (e.g., having to deal with multiple departments of the major retailers, encountering logistical issues in stores, and so on.)

He stated regarding the market, “There absolutely is interest in the solutions, however, purchasing will not occur until the value is proven.”

He describes the company as “on a journey to find value.” It appears to us that they have definitely hit on an interesting lode in terms of their ability to link to POP merchandising displays.

How far can this carry them? McMillan calls the display tracking part “the steak” and other digital and omnichannel solutions “the sizzle.” He is very confident about the company’s expansion and says that over the next five years they plan to be “in as many signages as possible.” 2017, he believes, will be a major breakout year for Shelfbucks.

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