Lines in brick-and-mortar stores, especially during peak sales periods like Christmas or end-of-season sales, are a real pain point for customers. Indeed, according to a study by Epson, over 37% of people abandon a store after waiting in line for longer than five minutes. This equates to a drop in turnover of about 24.8%.
Enter Buy Yourself, a Spanish startup founded in 2016 specifically to design a technology to allow brick-and-mortar customers to pay for products using their phone. The idea was born when co-founders Guillerm Villalón (CEO), Luis Manuel Peréz (CPO), Jaime Gonzáles del Barrio (CTO), and Pablo Serrano (CMO) worked together in consultancy firm Everis. For an internal entrepreneurship contest, they came up with "a prototype of an anti-theft tag that automatically released when the purchase was successfully finalized," said Peréz.
The team won the contest and decided to found Buy Yourself to develop a minimum viable project (MVP) for testing on the market. "For us, it meant taking high risks but we decided to continue the project on our own,” Peréz told CompassList in an interview at the recent 4YFN conference.
The colleagues bootstrapped the initial development of a mobile app that would enable self-checkout and deactivate stores’ radio-frequency identification (RFID) product tags, attaining local public grants from accelerator Enisa and incubator Barcelona Activa. Although they received interest in the technology, plans to deploy it in stores did not pan out.
"We noticed that there was a certain amount of friction from both retailers and customers alike,” Peréz said. "These were related to system integration on the B2B side. In addition, we realized that between waiting in line or downloading an app to avoid the queue, people were opting for queuing.”
No need to download
Rather than scrap their idea altogether, the team worked on product adaptations and technological improvements, building different software solutions for retailers whilst gathering industry insights for the second stage of MVP development.Taking advantage of their consultancy experience, the team built multi-channel solutions like "Click and Collect," where goods are ordered online and picked up from brick-and-mortar stores. Their clients include Misako, a retailer of bags and accessories across Spain.
“This helped us to generate confidence in the sector, reinforcing the team with on-field experience of what should and shouldn’t be done,” Peréz said.
After a couple of years spent on product adaptations, the company launched Buy Yourself GO, which sees customers of participating stores use their smartphones to access a webpage customized by brand and store. With their smartphone camera, customers scan the barcode of the items they are purchasing and pay and check out via a dedicated webpage without having to download a mobile app.
Buy Yourself GO can be integrated into the retailer's security system in less than 24 hours. Its patented technology notifies RFID providers once clients complete payment, deactivating the alarm automatically so customers can leave the store in minutes without triggering security systems. For non-RFID alarm systems, like anti-theft ink tags, or in the absence of any alarm system, the company created the "Xpress Corner," where security tags are removed quickly by personnel. Although less practical, this solution still saves up to 55 seconds per sale, the company said.
To validate market fit, user experience and business model, Buy Yourself GO has begun trials with two major retailers in Barcelona: Misako with its more than 200 stores across Spain, Portugal and France, and El Ganso, a Spanish fashion brand with over 100 bricks-and-mortar stores across the country. The business plan entails eventually charging participating stores a monthly fee alongside a percentage commission of each transaction, which will be defined based on the pilots’ outcome.
Peak period demand
"The application caters to physical stores, especially during sales, Black Friday, the Christmas period and weekends when high customer turnout creates long queues, and when customers are identified to leave the shop empty-handed," said Peréz.
The next major test of Buy Yourself GO's popularity is the summer sales period. “We believe that, by then, we will be able to get significant data and business metrics that are needed to reach out to new potential clients, both at a national and an international level,” he added.
To scale up the business, Buy Yourself is looking to raise about €500,000 in two distinct phases. The first round will be closed in June 2019 and the company anticipates raising €100,000 in convertible notes, with 35% of the total achieved to date. The second round of €400,000 is targeted to be raised by end-2019, and will be mainly used to increase the client base and to scale internationally.
Focused mainly on clients in the fashion industry, Buy Yourself has joined Atelier, a program promoted by fashion business school ISEM that connects fashion retailers and startups and helps them establish business relationships. Peréz believes that there are many other sectors, like restaurants, that can potentially benefit from Buy Yourself's technology, and where customers’ experiences can be optimized to improve service and, potentially, turnover.
