Ned Hayes [00:00:01] Welcome to SparkPlug, where we talk to smart people working at the intersection of business and technology. Brought to you by SnowShoe making mobile location smarter.

Ashley Coates [00:00:15] SparkPlug has a unique holiday retail edition of our podcast today. SnowShoe our sponsoring company is expanding nationwide with the acquisition of leading retail loyalty vendor Loyalti, spelled with an I. I’m Ashley Coates, co-host of SparkPlug, and I’ll be interviewing both of these leading CEOs as they merge their operations and change the future of retail loyalty in the United States and beyond. So today, I’ll have the privilege of doing a dual interview with SnowShoe CEO Ned Hayes and Loyalti CEO Dheeraj Sanka. Welcome Dheeraj and Ned! 

Ned Hayes [00:00:51] Thanks for having us. 

Dheeraj Sanka [00:00:53] Thanks, Ashley. Glad to be here. 

Ashley Coates [00:00:56] Thank you for being here. Ned, so I understand that you have an announcement to make. 

Ned Hayes [00:01:01] Yes, I’m delighted to tell you that SnowShoe, the leader in check-in technology, is acquiring Loyalti, the leading loyalty program for small retailers, and we believe that our work together will be useful to thousands of retailers nationwide. 

Ashley Coates [00:01:15] Wow, that’s a big move for SnowShoe. Why did you decide to make this move? 

Ned Hayes [00:01:20] Well, SnowShoe has traditionally been focused around being a technology vendor, proprietary checking technology. But this year we look to really closely at where our tech was being used and we discovered that the most comprehensive and useful implementations were all focused in loyalty. So we did some pilots with customers at scale retail merchants, notably in Olympia, Washington. We discovered a lot about how retailers work, but we also discovered that retailers want to use a whole product solution, and SnowShoe at the time didn’t have that whole product solution. 

Ashley Coates [00:01:54] What was missing? 

Ned Hayes [00:01:57] Well, to really enter the retail game in a big way, we needed a full stack backend hardware, software, good customer experience, mobile apps, customer service, the whole meal deal. If SnowShoe wanted to accelerate in retail, we needed to offer merchants all the bells and whistles, not just like the wheels for the train. 

Ashley Coates [00:02:15] OK, and Loyalti had that full experience? 

Ned Hayes [00:02:19] Yes they did. 

Ashley Coates [00:02:20] Really interesting. Dheeraj, can you tell us what you built at Loyalti? 

Dheeraj Sanka [00:02:27] So over the past five years, we built a complete, full stack solution that was truly optimized for small retailers. We built a kiosk driven system that incorporated SnowShoes unique stamp technology as a way for every retailer to own the important experience of validating a customer’s presence and points, and giving that customer rewards surprises and achievement with loyalty points. So the loyalty system includes a pad for every merchant software that powers that experience a proprietary style SMS and email messaging services that allow for customers to be contacted by merchants with tailored campaigns on a regular cadence. We also have a review piece that provides the ability for retailers to quickly and easily reviewed by their customers online in real time. Our system also includes analytics and a robust backend that records activity and reports on customer engagement and interactions with every merchant. 

Ashley Coates [00:03:25] Fantastic. That sounds really compelling. So what kind of market reception did you have with that system? 

Dheeraj Sanka [00:03:33] Yeah, it’s been really tremendous and successful in the market over the first few years. We grew at over 200 percent annually, scale association up to 800 retailers nationwide. What brought up adoption by many retailers with multiple locations across over 20 states I’m so happy that so many of our customers have renewed year after year and find our solution compelling. 

Ashley Coates [00:03:57] So what was missing? Why did you decide to sell? 

Dheeraj Sanka [00:04:01] Yes. Well, our team took a hit during COVID. Small retailers were having a hard time. We don’t have tremendous attrition, to be clear. It was just that customer service was harder. Marketing was harder. Sales was harder. And we don’t have the marketing staff or team to really get the message out. So I have to make the decision to grow the team or to narrow our offering. I didn’t want to make our system any less effective. But I’ve also had some exciting opportunities to take on a new role in a new industry. And so I decided to seek out a partner who could take our existing customer base and explore and expand the loyalty system them. 

Ashley Coates [00:04:38] And is that where SnowShoe came in? 

Dheeraj Sanka [00:04:41] Precisely, yes. SnowShoe is a  great venture funded company at the start of the Techstars and went from Disney Accelerator. And now they have enterprise class implementations around the world, with everyone from Red Bull to Shell to Merkle using SnowShoe technology. This year I saw that SnowShoes retail pilots have been really successful, and they’ve done some fantastic marketing this year around getting retail solutions to market, and they were really focusing on retail. And since I already knew their CEO, ya know, Ned over here and I really knew their team was solid, I was really excited when the opportunity came to have SnowShoe acquire this business. 

Ned Hayes [00:05:17] Well, thanks Dheeraj, I’m really happy to be doing this deal with Dheeraj Sanka. I mean, he’s built a fantastic organization and a really great line of customers. I really admired his work and he’s been a really instrumental leader in this space. And because of the solid system they’ve built, this is really attractive to us. Dheeraj has an absolutely delightful customer experience. He has a reliable, full stack. It really works, and it’s it’s really well-priced and well-positioned for merchants and retailers all over. 

Ashley Coates [00:05:52] Wow. Well, sounds like you’re both happy. Very happy with this deal. So what does this mean for Loyalti customers, all the merchants and retailers and restaurants who use the system today? What will happen to their existing implementation? And will they have to change things? 

Dheeraj Sanka [00:06:11] Yeah, I’m happy to tell them that SnowShoe has made a commitment to fully support them in every way possible to keep their systems up and running and very solid. In fact, I think my customers will be super happy with the level of customer service and hands our hands on care that they will receive from the SnowShoe team. And I believe that Ned will agree with me on this. 

Ned Hayes [00:06:30] Absolutely. I mean, here at SnowShoe, we plan to fully support all those hundreds of customers who use their loyalty system today and will apply the full power of the SnowShoe team to make them even more successful with shoppers. So to be really clear, we plan to totally keep the loyalty system and make it even more robust, more scalable, faster and even more delightful to use. 

Ashley Coates [00:06:54] What about the loyalty team? 

Ned Hayes [00:06:56] I’m also happy to announce that Ron Sim, who headed up sales and customer service at Loyalti, already joined the SnowShoe team, and he has been really effective, with customers already onboarding new ones and helping helping existing customers come up to speed on SnowShoe. Dheeraj here has also agreed to remain as an advisor for a period of time to make sure we’re able to make this transition really smooth and surmount any bumps in the road. 

Ashley Coates [00:07:25] That’s really incredible, so nothing really is changing for Loyalti customers. It’s really smooth sailing ahead if you’re already using the Loyalti system.

Ned Hayes [00:07:34] Absolutely smooth sailing. Now there will be two important changes. 

Ashley Coates [00:07:38] OK. Two. What are the changes? 

Ned Hayes [00:07:41] First, we’ll be changing the name from Loyalti, spelled with an I to Spark Loyalty spelled with a Y. 

Ashley Coates [00:07:47] Wow. Big change, so Spark Loyalty is the new name. 

Ned Hayes [00:07:48] Right. We have a trademark filed on a variety of Spark related technologies, so Spark Loyalty will be our names for the system moving forward. 

Ashley Coates [00:08:01] And what’s the second change? 

Ned Hayes [00:08:03] Well, the second change I think merchants and existing retailers will be really happy about. We will have a dedicated customer service person she is US based based in Portland, Oregon, she’s absolutely wonderful. Her name is Karen Jensen. You can find a post about her on our website and as a retailer, you can reach her directly through our website, and she will be taking good care of existing customers and onboarding new customers. In fact, since we acquired the company a few weeks back, she’s already onboarded multiple new locations. She’s really fantastic to work with. 

Ashley Coates [00:08:37] Okay, so that’s the acquisition. I’m curious about the broader market, though. Why does this acquisition make sense now, and what does it mean for the future of retail? 

Dheeraj Sanka [00:08:48] Yeah, it’s important to understand that small retailers are the lifeblood of the industry. You know, brick and mortar retailers are here to stay. And every year, even last year, the small retail space continues to grow, adding new stores at about two percent clip every single year, even despite COVID. Brick and mortar retailer continues to be a growth market. 

Ned Hayes [00:09:09] Totally agree with you, Dheeraj. I mean, brick and mortar is here to stay that even in the era of e-commerce and omnichannel, new brick and mortar stores get added every single year. I mean, you look at online only retailers like Warby Parker or even Amazon and Google. All three companies Warby Parker, Google and Amazon have all opened physical locations over the past five years because that’s where the real money can be made, and that’s where retail really matters. And so we are heavily invested in making sure that brick and mortar retailers can be successful and that those retailers have the best technology possible to serve their shoppers. 

Ashley Coates [00:09:54] Interesting. Well, so Ned, what trends are coming that will change retail over the next few years? 

Ned Hayes [00:10:03] Well, I talked about technology and what we’re really seeing is a merger of the technology that began with sensors and online commerce merging into the retail store space. So some of these examples are digital signage that can change on the fly depending on a customer need or pricing or supply chain. You’re also seeing cameras in stores to understand what customers are doing. I mean, the most expansive implementation of that is the Amazon stores, where you can just walk in and grab something and cameras will understand what you grab and automatically bill you. I don’t think that’s going to be everywhere, but I think it will be possible for merchants to have a camera going to understand customer intent and understand which areas of their shelves are being seen by customers and actually being touched by customers so they can position product effectively for customer reach and for customer interest. I think we’ll also see things like online appointments and online purchasing, merging into the brick and mortar space. So when you look at the Apple Store, I think it’s a really good model for the future where you have a really customized, curated experience with a concierge service. Somebody who actually walks up and knows your name and knows your past purchases when you walk in and that they’re there to service you, they aren’t just somebody standing in the background. As you browse, there’s somebody who will actually be a host to you and cares very specifically about your experience while you’re in the store. So that type of highly curated experience, I think, is going to be the future of retail. 

Dheeraj Sanka [00:11:46] Yeah, I completely agree with Ned here. So I think, as you said, the physical experience still matters, and that’s why SnowShoe makes such a good fit for our existing customers and should be really able to set the pace for loyalty programs nationwide. You know, SnowShoe has a unique value proposition, and I really believe in their future building up the system. 

Ned Hayes [00:12:04] Thanks Dheeraj. I too believe that SnowShoe can really work with existing customers, all the customers who are using this system. 

Ashley Coates [00:12:12] Spark loyalty system, right, right. 

Ned Hayes [00:12:15] The system we’re now calling Spark Loyalty, I think we can work with all of the retailers who are onboarded here and build really what we see as the future of consumer loyalty in the United States and and elsewhere as well. 

[00:12:31] It’s ambitious. So where do you see SnowShoe as a company in the next five to 10 years, let’s say? 

Ned Hayes [00:12:40] Well, what Dheeraj built here is a fantastic foundation where we have the ability for merchants to quickly and easily onboard, for shoppers to have a delightful experience, for an actual event to be validated with the proprietary SnowShoe technology that marries into the solution. And then building on that foundation, I think we’re going to be able to take this, this beginning work that Dheeraj has done in review automation and make that a real time experience for shoppers so that any shopper who buys something can immediately rate their experience even while they’re standing in the store. And they can say this store was fantastic for me, everybody should come down. This is a five star store. I’m totally here. And I think that will marry into the livestream shopping experience. We’ve seen other companies like ShopShops in China and the US began to really take off with livestreams so I could see SnowShoe accommodating a livestream experience through the app or through other experiences that allows a merchant store to be open to customers that are not only standing there physically but are also online. So you have a brick and mortar store that can reach everyone. It’s not limited to just the four walls and the door, but anyone around the world can shop at that store in real time. So I think we’ll be embracing some of those technologies and embracing more sensor driven behavior as well so that we can understand shopper expectations and optimize for those so that both the retailers and the shoppers have the best experience that they can. That’s really the vision for SnowShoe. 

Ashley Coates [00:14:21] Thanks Ned, that’s a great vision and really in line with all of the conversations that we’ve been having around SparkPlug with experts in the field. So thank you so much for sharing that vision and thank you Dheeraj, so glad to have you and your team as part of the SnowShoe family. Looking forward to some great things from both of you in the future. 

Ned Hayes [00:14:41] Thanks so much, Ashley. And I look forward to seeing how the retailers and all the happy shoppers over the holidays. 

Dheeraj Sanka [00:14:48] Thanks, Ashley. Thanks for having me. I’m really excited about the future of Loyalti. I think our customers are going to be very happy with you where SnowShoe is going to be taking the product in the future. 

Ned Hayes [00:15:06] Thanks for listening today to the SparkPlug podcast and brought to you by SnowShoe Snow.sh For smarter mobile location, SparkPlug is a wholly owned property of SnowShoe all content. Copyright 2021 SparkPlug Media.