Episode 033 : 10/21/2021
Trevor Sumner, CEO of Perch (Part 1)
Trevor Sumner is the CEO of Perch, a recognized leader in in-store product engagement marketing, interactive retail displays and augmented reality. Perch was named a Top Tech Company to Watch by Forbes and has won numerous Clio, Fast Company, Edison, Bloomberg and Digi awards. Trevor is regularly cited in industry media such as Mashable, TechCrunch, Inc, Forbes, Business Insider, and VentureBeat. (Part 1 of 2)
Host: Ned Hayes and Ashley Coates
Guest: Trevor Sumner
Listen to every episode
Topics discussed in this episode
- The industry-leading in-store product engagements marketing technologies offered by Perch and how it contributes to the revolution of retail
- The reimagination of retail as it pertains to the seamless integration of physical shopping of brick and mortar and digital shopping of ecommerce
- Role of in-store product discovery in driving sales and building customer loyalty
- The benefits and challenges of running a startup and the cycles they go through
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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. Welcome to part one of a two part interview with Trevor Sumner, CEO of Perch. Trevor Sumner is the CEO of Perch, they’re recognized later and in-store product engagement, marketing, interactive retail displays and augmented reality. Perch was named a top tech company to watch by Forbes and has won numerous Cleo, Fast Company, Edison, Bloomberg, and Digi Awards. Trevor superpowers, our understanding technology and driving the evolution of new technologies and the broad market adoption. Trevor is regularly cited in industry media such as Mashable and TechCrunch and Forbes and Business Insider, and we’re happy to have him at SparkPlug today. So welcome, Trevor.
Trevor Sumner [00:01:03] Thank you. Thank you so much. Good to be here.
Ashley Coates [00:01:06] Thanks so much for being here, Trevor. So will you start by telling us about yourself? You seem to have a lot of passions and interests, from e-commerce to high performing teams, the evolution of new tech and even scuba diving.
Trevor Sumner [00:01:21] Yes. Well, I’m a born and raised New Yorker, I grew up on Washington Square Park. If you ever saw the movie, I Am Legend. I grew up in that house with the stairway on to Washington Square Park. So I think my entrepreneurial journey began, you know, just growing up in New York City with, you know, the Gay Rights movement and the skateboarders versus the B-Boys and everything really kind of happening right in front of my doorstep. And I lived in Austin for a little while and I moved back and people said, why? Because Austin’s a great town and I missed walking in traffic and having a couple of thousand people come at me every single day. So I consider myself somebody who yearns for a lot of experiences. So like you mentioned, I’m an adventure traveler and scuba diver. I’ve scuba dived in every continent, including Antarctica. I’ve scuba dived with my wife in the most shark infested waters in the world of Cocos Island in Costa Rica. And I think as part of that kind of adventurous streak, I I graduated from Princeton with a computer science degree in 1998, so that’s the height of the first internet boom. So what do you do? You go to the adventure area of the industry, which was tech startups, and I’ve known tech startups for the past 20 some odd years and just kind of love the feeling of a new, challenging space being the underdog. So much stuff coming at you at all times, building high performing teams that change industries and new technologies that wow people. And so that’s what I’ve spent my career on working with great people, on interesting problems, on next generation technologies and services. And so that’s that’s that’s a little bit about me.
Ned Hayes [00:03:04] Right. Well, that’s absolutely fascinating. Can you jump forward a little bit to tell us about your current work at Perch?
Trevor Sumner [00:03:10] Yeah, absolutely. So I think there’s a lot of focus on the disruption of retail, which is a 4 trillion dollar industry. And, you know, people forget that 85% of transactions still occur in store, there’s a lot of hype about e-commerce, but the reality is that in-store retail is growing faster on a dollar basis than e-commerce and has every year, except for 2020, which was an anomaly, right? So, for example, Target’s in-store efforts are growing five times as fast as e-commerce on a dollar basis this year. And so the problem is in-store shopping looks a lot like it has 20, 30, 40, 50 years ago. In fact, the origin of the word store is that used to just store the products on the shelves. And that’s what you see when you go to grocery stores, just shelves with storage of products and you are the stock picker. And the reality is there’s different consumer expectations these days with people want ratings, reviews, videos, how-tos they want to do research. And today, the only way brands can get that message out has been really digitally before they go into the store. So the store has been this black box, and so we’ve been really thinking deeply about how do we create a combination of physical and digital shopping experience in the store that takes the best of both worlds? And, you know, online, it’s really easy to find information about a product, you just click on it. And it turns out that what we’ve discovered and what we patented is the fact that that click in stores the moment that you pick up a product, the moment you pick up a product that’s like clicking on it, it’s like, tell me about this product, and you can’t depend on packaging and for print to get your message across. You’ve got videos, you’ve got Instagram, influencers, ratings, reviews, this product goes with that product it’s different colors, shapes, sizes, all these type of things. And ironically, only 1% of digital media spend is spent where those 85% of transactions occur, so we’re trying to change that. And the way we do that is by using computer vision and touch screens in store and the cameras detect which products you touch. So you so when you click on it, it just wakes up like Minority Report and starts telling you about the product. And by doing that, you know, shoppers get the information that they need and they end up converting at about 30 to 180% higher rates, you see sales up to 30-180%. Brands get to connect more meaningfully with shoppers and get stand out in a competitive retail environment where there could be hundreds or thousands of products on the shelf and retailers can start increasing dwell time, creating a differentiated experience and even promoting those e-commerce and omnichannel offerings like mobile loyalty or Amazon also. Oh, you want this product and you want it and red, well, we don’t have it in red in the store, but yes, you can order it here. And so we think that the future of the shelf isn’t just throwing products on top of it. It has to be a combination of merchandising and digital marketing and media and customer engagement in these new, interesting ways. And then the other interesting thing about it, which we could talk about is once you start instrumenting those clicks at retail, we are discovering that people shopping completely different ways than decades of of norms have told us they do. And so we can look at how pricing, packaging and content changes shopper behavior. So super exciting. We work a lot with brands like Johnson Johnson and Unilever and Nestle, Purina and bigger department stores, electronics retailers, baby, pet, beauty. So it’s an exciting time because everybody is invested in the reimagination at retail.
Ashley Coates [00:06:51] So it sounds like you’re bringing the benefits of e-commerce, including product discovery to the brick and mortar shopping experience. Can you, yeah, can you tell us more about how shoppers are embracing that vision?
Trevor Sumner [00:07:05] Yeah, I mean, one of the things that we have tried to push these notions on shoppers, you’re like, oh, give us your phone number and we’re going to text you, scan a QR code, right? And we can talk about how QR codes now in a post-COVID world, everyone’s used QR code right? Because of menus, and even grandma’s had to use a menu at the restaurant. Well, the reality is there’s still not really using it at retail. Anything that requires teaching a new behavior, you see, like 95% drop off. So we have all these tools, right? But consumers and shoppers haven’t really embraced them without a really big incentive. So this is why retailers have all launched new loyalty programs, giving more and more money away or doing premium type offerings like even CVS Care Pass right, you spend I think it’s five dollars a month and you get $10 in discounts, plus you get 20% off all their generic products, right? Big incentives Target’s red circle, you get 2% cashback on your purchases because they want to get that data. And so you’ve got to create these carrots because you’re creating friction with the shopper. I think the best technologies are the ones that are invisible, that are seamless to the shopper where you don’t have to teach new things, and that’s people already pick up products, so that’s the trigger for us and what we see from an engagement perspective is about five to 10x the engagement from shoppers in terms compared to traditional digital signage and traditional digital signage, just about 1-4% sales that we show 10x that rate at 30-180%. So, you know, we’re seeing shoppers engage in all these kind of interesting new ways. One of the things that we love one of our favorite things to watch is when people pick up a product and they realize, Oh my God, the screen just woke up and it’s starting to tell me about the product, this magical experience just happened. They pull out their phones and they start touching the other products and they they send it to their friends and and they smile, right? And I think one of the things that I’d like to do for the long term is actually just measure the number of smiles we generate in retail because part of this is about really leaning in to what is a key experience for the shopper, which is this in-store discovery experience to actually you hit. It’s like, you know, people talk about how great e-commerce is because, you know, it’s just easy, right? I can. It’s really good for buying. If I know what I want, I click purchase. It shows up at my door, but it’s kind of soulless, right? And now we’ve, you know, people like, imagine this great world where anytime you want something, you can just think about it buying it shows up at your door. We just had that for the last year and a half during COVID. It was terrible. Right.
Ned Hayes [00:09:45] Right people. People were very happy with. I think I think you’re touching on besides just discovery, the idea of context and understanding the context of what you’re doing. So when I go into a bookshop that I visit regularly, the store owner or the store clerk knows exactly what kind of books I’m interested in, they know what I picked up recently, what I’ve talked about, and so they can contextualize a new book within that environment. And I have some background in providing context through sensors. That’s kind of what you’re doing for Perch that you’re providing the context of this person picked this thing up, so maybe they provide this other thing. So so can you speak a little bit to like the context that you’re providing to the user shopping experience.
Trevor Sumner [00:10:28] Yeah, so there’s there’s there’s there is a multibillion dollar shift to digital signage and store happening right now, right again, 1% of digital media spend is happening where 85% of transactions occur, and arguably that maybe is best spent in store because it’s lower down in the purchase funnel. Like I’m, I’ve got the products right in front of me, 20 feet from the point of sale so that the challenge is a lot of the people are implementing it in a way that’s more like a banner ad. If you remember the banner ads of old, it’s it’s interruptive media, it’s Blinky Tech saying, maybe it’s Maybelline, maybe it’s Maybelline, maybe it’s Maybellinee and it’s like, well, great. What’s the question like? You know, I’m trying to figure out how to pick up a product, right? So now they’re using some technologies, like front facing cameras to say, hey, you know, Trevor is a 45 year old male and so we’re going to do this message for Trevor versus a Gen Z woman or et cetera. But you know, if you think about which signals are important, would you rather know, hey, there’s a 45 year old male in front of you or hey, this person is picking up a puppy product puppy toy for age, you know, puppy 6-12 months, and you know exactly what I’m looking for, and now you can market puppy products all around. So we think that just kind of like when you click on a product online. Right? The best thing to do is to provide information about the product, not to just extrapolate. I know you clicked on a product, but like, let’s just show on generic 45 year old male messaging. And so I think there’s going to be a real battle as people implement these digital signage networks in store to not create a Times Square like experience that detracts from the physical shopping and tries to interrupt you and say, buy one, get one free, or what about this new product? What about that new product, but actually be like, Hey, seems like you’re interested in this product? Let me provide some more information and be helpful. And and that’s seamless integration between the best of physical shopping and digital is going to be critical to to, I think, providing differentiated experiences and not turn your store into Times Square and annoy the shoppers, even though brands will pay a lot of money to retailers to for that real estate.
Ned Hayes [00:12:43] And I know you spoke a minute ago about maybe measuring the number of smiles that you’re generating, so is that the business model at Perch? Monetizing through smiles or sell out the business model a little bit?
Trevor Sumner [00:12:55] Yeah, absolutely. So we do platform as a service. So every one of our displays, we charge X number of dollars per month, typically somewhere between a hundred and fifty and $300 dollars per month. And that includes the hardware leasing, the 4G service, the software, the analytics and and all of that
Ned Hayes [00:13:14] It’s the whole deal that you’re charging for, you aren’t kind of Chinese menu’ing it, you just get a full solution.
Trevor Sumner [00:13:19] Absolutely. And it’s super predictable, right? Because retail is a chaotic environment, you know, who knows somebody might punch a screen. You just call Perch and we replace and you don’t have to pay anything. It’s all, it’s all all covered. It’s predictable cost model and and we hang our hat on being able to drive that 30-180 % sales. So if 30-180% sales left just weren’t that one $150-300 dollars a month, it makes sense for you to implement Perch. And because we’re hang our hat on sales, we mostly sell to brands who care about the sales of those products on the shelf. The reality is, like many retailers, they don’t really care if you sell more Purina or more, you know, another brand, you know, Blue Buffalo, they just care about the category left right. So and the hidden little secret that you know that for some reason, retailers try and keep secrets is ultimately they always ask for the brands to pay for it. So we do work with some retailers who basically create this platform for brands, but then get the brands to pay for it. And so, you know, typically we’re selling them to brands who care about the data about what happens to care about their sales lift and driving market share in kind of key categories where that equation of 30-180% sales that is worth $150-300 dollars.
Ashley Coates [00:14:33] Very cool. Can you give us a nutshell overview of competitors for Perch? Who else is doing this and where does AmazonGo fit in? Are they a future competitor?
Trevor Sumner [00:14:47] Yeah, I think that’s a great question. You know, again, we focus on selling to brands. So a lot of you know, when you when you look at retail tech as a sector, it’s a lot of people selling into the retailer. Right. So, you know, whether it’s Amazon Go or those type of automated cashierless checkout, there are a couple of different great ups in that area. I don’t know if you call it startups when you raise, you know, 300 million dollars, but apparently still do. OK. So, you know, these unicorns that are still somehow startups, it’s like the billion dollar company. But I’m a startup anyway. So, you know, there’s standard cognition, there is cabango. There’s a bunch of these guys are looking to automate checkout. I think they’re implementing the click for transactions, and to do that, you need a ton, ton it like they have cameras all over. Amazon Go, for example, is a multimillion dollar investment per store. Right? And so you’ve got to get the retailer to really do that across category. And so that’s going to take a while. And additionally, I think you just need much greater accuracy for cashierless checkout, right? You need five nines accuracy because nobody wants to be charged for something they didn’t actually buy. Now for us, yeah, we need two nine’s accuracy, right? Like, if you pick up a product and the wrong thing comes up, that’s basically a cross sell anyway, right? That’s fine. Like nothing but the
Ned Hayes [00:16:07] Blue shirt instead of the gray shirt. Not a big deal.
Trevor Sumner [00:16:11] Right, exactly. Like you picked up the blue shirt, now we’re like you like the blue shirt? Buy a grey shirt too! So, so and additionally, you can implement this on a single end cap in the store, so it’s a lot easier to start implementing it. So. Well, Amazon Go really exciting in terms of its capabilities, has only been implemented in pretty limited use cases. Amazon just announced that they’re going to enable their first Whole Foods, and they’re kind of tripling the size of the store that they can handle. But it’s so expensive you’re just not going to see it at scale for a while, you know, purchase at scale. Now you can implement an end cap to hundreds or thousands of stores right now, and it’ll work. Hmm. So, so you’re going back to the question competitors. So our focus is on really the people who are helping brands stand out at retail. So I think there’s some interesting ones. There are some of the people are playing in that kind of digital signage, space creating programmatic networks, banner ad networks, if you will. I think cooler screens are very like they’re they’re taking the cooler door and making a giant like six foot screen. So you can see kind of what’s in the cooler door but overlaid with digital information. And they’re doing a bunch of really cool AI and eye tracking stuff to do attribution. One of the biggest challenges in that model is just data like media. People are spending money on the media side of the house. They want data. You can’t just say, Oh, we served you up ten thousand times, and here’s the price people don’t buy by CPM anymore. They want to know how many engage shoppers. What’s the demographic breakdown and what’s my sales up? And that’s one of the bigger challenges we find other competitors, such as traditional digital signage, which I think is pretty terrible. I think it’s non contextual. It’s interruptive, it’s annoying. I think there are a bunch of people doing really cool stuff with it, though I just think our purchase just much more contextual. And then, you know, we’re competing with, you know, any any way that a brand is trying to stand out in store. Sometimes that could be mobile apps and mobile coupons and other things, but digitizing the in-store experience is such a massive, massive multi-trillion dollar market. There’s plenty of room for experimentation and ROI across lots of different concepts.
Ashley Coates [00:18:33] And so on that note, do you think that brick and mortar stores are leaning into the benefits of contextual product person connection enough in terms of marketing and the in-store experience inventory?
Trevor Sumner [00:18:46] No, no, absolutely not. Not even a little question. Not even a little. I mean, look, I think it’s especially been a hard year because right now, with supply chain challenges and store closures, what’s retailers have had to focus there. And and but this has been a real benefit because, you know, it used to be that stores didn’t really fully know the inventory per store. They couldn’t expose their product information was all over the place. And because of COVID and being able to offer like buy online pickup in store, you need to know the products in store and you need to know the information about the product and standard ways around, you know, product image, pricing, description, all that kind of commerce level stuff across and have that exposed across mobile and online and BOPIS and all these things. And so fundamentally, over the last 18 months, retailers have built these kind of core foundational layers around product information, commerce, fulfillment options and making those services for the rest of the business that they can access and opening them up. And those foundational elements are now enabling us to digitize the in-store experience much faster because we don’t have to worry about like, OK, well, where do where do I send you if you want more information about the product? Like what would this QR code goes where right? Like, OK, we have that this product information that we need product description or product price, how do we get access to it used to be like, Wow, it’s complicated. Now we’ve got it, if we had via API. So, you know, with 5G coming in the connected store, Walgreens hooking up 5G and 9000 stores this year that the connected store is becoming a reality because of his foundational layers. And we’re starting to see them lean in for retailers, it’s a lot harder because they have to do it store wide and across category for brands. This is becoming really easy because the cost of electronics, the reliability of them, the availability of the internet for management is now helping and catalyzing this this movement. So we’re seeing brands lead the way for, at least for us and retailers kind of reluctantly and kind of moving along because they’ve got so many competing priorities.
Ashley Coates [00:21:02] That’s really interesting. So I don’t know if you still consider Perch a startup.
Trevor Sumner [00:21:09] We do. We do good. Yeah, absolutely.
Ashley Coates [00:21:12] The cool kids group!
Trevor Sumner [00:21:13] Yeah, I mean, we’re pre Series A, right? So like, you know, we’ve been mostly kind of bootstrapping the business and growing organically. So. No, no, no billion dollar valuation yet.
Ashley Coates [00:21:25] Not yet. Well, so as a startup. So all startups fail at some point during those early years, where has Perch failed any entertaining failures in your in your history?
Trevor Sumner [00:21:37] Yeah, I mean, you know, you know, when you’re so emotionally invested, entertainment isn’t really what you think of failure. But, but, you know, failure is highly encouraged at Perch in terms of, you know, we’re constantly stretching and trying to learn and create a learning organization. So failure has to be part of that. I think, you know, I I’m an advisor and angel investor to a bunch of different startups. And what I found over the years is there are typically three stages of startup technology, technology startups and sophistication. And the first is let’s get out a product that kind of works and proves the concept. And you put it out there, you validate it and then you’re like, OK, let me raise money, and then I’m going to build it to scale, right? And that’s like stage two. And so you build it to scale, you’re like, I’m ready to take over the world. And you actually try and scale it. And then you realize you made a lot of bad assumptions and you got to re architecture the third time. And if you’re really, really good, you only do this three times, right? These three stages of a lot of startups do it four or five, maybe, and six, you’re probably in trouble, right? And so I think most of the failures that at Perch has been really just around kind of scale. And you know, when we first started out, our hardware was too expensive for our, you know, our content management system was was minimal, right? So it’s like little tech technology details. So like, you know, for performance, we would load every video up and cache it on the device so that the moment you touch your product, it was the instantaneous videos ready to load, ready to go. Well, that’s great until you have 90 products on the shelves and 90 4K videos. And all of a sudden the hardware that you have is just like, you know, it’s got the fan on. It’s making a lot of noise. It’s huffing.
Ned Hayes [00:23:27] Chug chug chug, right? It’s not really working. Yeah.
Trevor Sumner [00:23:29] Yeah. So it’s like, OK, well, that doesn’t work, right? So now we’ve got to re-architect it to be able to do some interesting things around lazy loading and caching and et cetera. So we’ve had some failures where it’s like, Oh, this project is too big for us or in one dimension. It could be number of devices, it could be the amount of content. It could be a variety of different things. And I don’t know that any of that’s really entertaining because, you know, ultimately, you know, it’s our job to make sure that this works for our clients. They’re making bets on us and emerging technology, and we do really well, just getting a trial in and converting it to larger scale rollouts like we have to be successful, like failures are are not an option. But, you know, some of it like, Oh God, you know, some of the failures are just, you know, dependencies on third parties who just kind of screwed us right? Like, you know, we integrate these electronics into the shelf and we were doing Harrod’s that with Beam Suntory, and it’s this really beautiful fixture. And like, you’re this artist are artist type person comes in and you know, it’s like, Well, I don’t know if I like the esthetic of this, I’m just going to move the camera three inches over there. And they didn’t even tell us, it’s like, Whoa, now the camera can’t see, you know, two of the products, what you’re doing. And oh, it’s going to be $10,000 dollars to go back in, you know, move the thing like why? Why, why would you do this without telling us? And you know, it’s funny because it’s so silly that two three inches makes that difference. But it’s not funny because it means that it doesn’t work the way it needs to be. And I think about the hundreds of hours, literally hundreds of hours, because this person made that decision. And and it it makes you think about, OK, well. When it comes to in-store retail, when it comes to hardware, people are scared of hardware. Part of the reason is because software is easy to change and change a bit doesn’t work. Okay, you tell me about it, I’ll change the bit back. I’m oversimplifying, obviously, but hardware is hard, right? It’s even got hard in in the word. And and when you start taking technology into the physical world, you start having physical world constraints. People who install these things. Shoppers who do these weird, weird things like we’ve had, we’ve had people try and unscrew and get into our componentry to see if they’re things that they can steal. That’s that’s pretty unusual. We had we had an employee steal one of our 4G hotspots, take it home and run their home network on it and drive like $2000 in 4G bills. OK, guys. And we didn’t. We’re we’re not sure it’s an employee, but we would guess just because of where the router was like, it was kind of behind the counter under the thing and a shelf like, you know, and it’s just like, OK, welcome to the real world.
Ned Hayes [00:26:39] That concludes part one of our two part interview with Trevor Sumner, CEO of Perch. Tune in next week for the second part of this fascinating discussion with a leader in brick and mortar retail technology. Thanks for listening today to the SparkPlug podcast and brought to you by SnowShoes, Snow.sh For smarter mobile location, SparkPlug is a wholly owned property of SnowShoe all content and copyright 2021 SparkPlug Media.