South African startup ZAbeacons, which spun out of a digital agency last year, is working on providing physical stores with “beacons” that allow them to communicate with shoppers via smartphones.
Founder Kim Kargaard told Disrupt Africa ZAbeacons was formed after he realised the potential of beacon technology and saw the chance to create a virtual shopping assistant and help customers get special offers first.
“ZAbeacons aims to create a seamless shopping experience, where stores can introduce related products, complimentary or supplementary products and get shoppers through the stores more effectively,” he said.
The startup provides retailers with beacons, an app or a software development kit and content management system (CMS), allowing them to communicate with customers.
“For example, if a person with their local food stores app on their phone enters the store and walks past a beacon when looking at different pastas, they might get a notification on their smartphone of a special for a specific type of tomato sauce to complement the pasta,” Kargaard said.
He said the startup was leveraging off the growth of smartphones in South Africa and Africa in general, which means most people have a near constant internet connection.
“It also means that people are using their phones much more now than they used to. It has become common to use your smartphone while shopping, using it to find the best deals or recipes,” he said.
“At the moment, brick and mortar stores would like to connect with their in-store shoppers, but it is difficult to achieve. They would also like to know what their shoppers are doing in-store. The use of beacons can achieve both of these goals.”
He said there are a few other startups in South Africa trying to enter this market, but the gap spotted by ZAbeacons was in actually providing retailers with a ready-to-go app that can be branded for their business.
Kargaard describes ZAbeacons as “self-funded and lean”, with the startup currently taking part in the LaunchLab business incubator at Stellenbosch University, through which he says the team has gained valuable business assistance and mentorship.
He said the company has plans to grow substantially in 2015, and hopes to also reach profitability this year. ZAbeacons, rather than charging a large up-front fee which Kargaard said would preclude the service to anyone but the biggest retailers, works on a rental model.
The major difficulty faced by the startup, according to the founder, is an unwillingness on the part of South Africans to embrace new technology.
“Major businesses in the United States (US) and Europe have been testing and implementing beacon technology during the course of 2014 and have seen some impressive statistics once implemented. South African businesses have been less willing to trial the service, but we will get there,” he said.