Bricks and mortar retail is in upheaval. To make a recovery, it seems that retail needs to operate a tighter technical operation and/or utilise new technology to keep the business profitable. Here, Santosh Sahu, CEO of AI retail delivery consultancy On the dot describes how his business, who counts Asos can help retailers in a challenging environment. Also, he explains how it managed to secure backing from private equity-backed same day parcel firm CitySprint to accelerate growth.
What is the business, when was it started and what were you doing beforehand?
On the dot enables retailers of all sizes to help them meet consumer expectations and compete more effectively. Via an online retailer portal or API, On the dot intelligently displays dynamic time windows, allowing shoppers to select deliveries at the time most convenient to them. It all started when I first met Patrick Gallagher – CEO of CitySprint Group, at a conference. I was a consultant in the retail digital sector at the time. Once Patrick started telling me about CitySprint, I found his vision really inspiring, and thought to myself that it was a great business model. But I can remember instantly thinking that machine learning would revolutionise his business model. The conversation that Patrick and I had on how AI could transform the retail sector, led us to where On the dot is today.
How did you get the idea, and what opportunity did you see when you started the business?
Actually, my wife can take credit for this one. She kept asking me to go and retrieve her click and collect orders, which I did, dutifully (and painfully!). One day I just got fed up and thought there must be a better way! Also, once I spoke to Patrick and heard about the CitySprint Group business model, the idea for On the dot began to take shape. I saw the opportunity to give customers control over their deliveries.
“Putting an end to people waiting around all day for their deliveries, receiving the dreaded ‘sorry we missed you’ card or the endless queues at the post office”
This would transform the retail sector, ensuring that it evolves in line with consumer demand.
What are your sales and what do you expect the turnover potential to be?
Our revenue to date in 2018 is almost £4 million. In terms of the market potential here, this could soar into the billions. In 2017, the global parcel delivery market represented $350 billion. Growth in digital shopping continues to drive a rise in the delivery sector, with more than 2.5 billion parcels being delivered in the UK in 2016 and an estimated 3.9 billion to be delivered in 2021.
How did you finance it and what were the challenges of that?
CitySprint Group has helped finance On the dot from day one. This presented the challenge that because it was internal, the speed at which we could progress was dependant on the pace at which the parent business, CitySprint Group was ready to proceed. However, I have had a wealth of resources at my disposal to help me realise the potential of On the dot – a ready-built client base, marketing, HR and other support. Where other start-ups have been thwarted before they have been able to truly launch, the heritage of CitySprint Group has propelled the business forward immensely.
What were your key marketing strategies?
So far, our marketing strategy has mainly been about cultivating organic and meaningful conversations with the right people. We’ve had a laser-focused approach which has involved events, social media and PR. Making the most of any speaking opportunities that come our way and attending the right industry events has helped us turn quality leads into something quite tangible. Some of our best business has come from meeting people at events and nurturing those relationships. We’ve also used other methods of marketing including: guerrilla, account-based and influencer marketing. Looking to the future, we are actively looking to invest more in digital marketing.
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What are the revenue streams?
We have two revenue streams. First, retail customers use the platform and their shoppers book their deliveries directly through us. The second is through licencing our platform in a SaaS model.
What are the main challenges you have experienced and seen?
One of the main challenges we face is the reluctance of retailers to invest in the digital sector. Retailers, given the current economic climate, are focused on net profit and struggle amongst the multitude of challenges to prioritise their IT roadmap.
“Retailers appear cautious about investing in digital technologies and combining logistics and technology is complex”
Often, retailers have the mindset that same day delivery costs will be too expensive for customers to stomach – when in fact, this isn’t the case! However, I truly believe that digital innovation will revolutionise the retail sector.
What advice would you give to early-stage businesses looking to disrupt markets?
Two things: keep your cash close and know your customers.
Ensure to look after your cash and spend it wisely! Impulsive financial decisions can often be the downfall of early-stage businesses. Be patient. Don’t try to rush important decisions.
Know your customers. Every business needs to recognise and appreciate its customer’s inner psyche. A business will only be successful if it provides a solution to a known problem and meets the wants and needs of its customers.