Like any good entrepreneur, Healey Cypher stared down failure and turned it into something he hopes could pave the way for future in-store experiences.
A few years ago, Cypher was riding high on the buzz around his digital store tech startup Oak Labs, which Ralph Lauren debuted to great acclaim in 2015. Similar to the fancy, futuristic fitting room tech in the Rebecca Minkoff flagship, Oak Labs’ “magic mirror” came to life when a customer entered the changing cubicle, offering options to switch up the lighting (dimmer for a club-like ambience, for example, or brighter to mimic the sunny outdoors) and to summon alternate colors and sizes from an available associate.
“The Oak Labs point of view,” Cypher shared at the PSFK Future of Retail conference in New York last week, “was about finding moments of frictions in stores and improving them.”
Cypher rattled off stats to back up Oak Labs’ results. Eighty-four of every 100 people interacted with the smart mirrors and those who used the tech spent as much as 70 percent more than those who stuck to an analog experience, he said. There’s evidence, too, that the devices helped shoppers get what they wanted, and more quickly, as people engaging with the digital mirrors spend 40 percent less time ensconced within the fitting room.
Despite all of these encouraging results, and the Ralph Lauren CFO’s proclamation that the smart mirrors where the “best in-store tech” he’d ever encountered, the premium fashion company wound down its Oak Labs implementation, leading to serious soul searching at the fledgling startup.
“We were missing the bigger point that this vision [of the digital store] is really, really hard,” Cypher explained.
The former head of retail innovation at eBay took the key learnings from the Oak Labs experiment—that people gravitated toward the interactivity of the mirror—to pursue what he believes is a greater opportunity in retail tech: the role of self service and kiosks in improving customer experiences.
“When you put self-service into stores, you see really interesting business results,” Cypher noted, adding that the traditional point of sale is teetering on the brink of extinction. Of course, Amazon’s push into “just walk out” checkout-free stores reinforces that notion.
Armed with a new mission, Oak Labs set about building what Cypher described as the “first operating system for kiosks,” sending its revenue up 347 percent in one year and attracting five acquisition offers. The startup took on the name of its successful wooer, Zivelo.
So far, Zivelo counts fast-food’s biggest name as its largest client (Cypher offered up a thinly veiled reference to the “golden arches”) and if you’ve been to one of the more modern McDonald’s locations, chances are you’ve used the new-ish kiosks to order up a beefy Big Mac yourself.
To date, ZIVELO has installed more than 15,000 kiosks to restaurant retailers, including three of the top five quick-service restaurants in the world, lifting tickets 20 percent to 30 percent on average. Restaurants have seen 100 percent order accuracy as the kiosks accommodate myriad languages and eschew the errors that accompany manual, human order-taking—plus a kiosk never forgets to upsell.
This ticket lift creates a nice-to-have problem for restaurants, which have had to scramble to hire additional kitchen staff in order to meet the increased order volume in the wake of the kiosk deployment. This leads to kiosks typically paying for themselves in as little as 16 weeks, Cypher noted.
Kiosks, Cypher believes, are intimately familiar to most modern people. You can find miniature versions at pay-at-the-pump gas stations, at airline baggage check-in stations, and now at renovated airport eateries featuring a touchscreen tablet at each seat. And it’s that intuitive ease of use that could make self-service kiosks the next big wave of in-store tech. In fact, Zebra Technologies 11th annual Global Shopper Study, published in December 2018, revealed that 52 percent of decision-makers in retail IT plan to change over their POS to self-checkout stations, confirming that do-it-yourself convenience indeed is on the rise.
Zivelo is about making the process of “bringing digital experiences to life much, much easier,” Cypher explained, describing kiosks as “sexy.” And to do that, the company is focused on creating “the first app store for public computing.”
That means a retailer, restaurant, hotel or any interested business could choose from a host of apps the ones relevant to its customer base. So a retailer probably would want the checkout and order return apps, while the hotelier might pick the check in and concierge apps, for example. The app-like experience reduces the IT burden and allows businesses to turn services on and off at the push of a button.
“I do believe the future of retail will begin being treated like software,” Cypher said. “We’re going to find that stores become responsive.”