Our new Disruption by Blockchain series aims to highlight companies that are leveraging the incredible potential of blockchain technology to disrupt and revolutionize their industry. Through one on one interviews, we'll speak directly with industry leaders to cut beyond the hype and get directly to the heart of practical use cases and examples of how it will change the world, one industry at a time.
The following is an interview we recently had with Eran Eyal, CEO of Shopin.
1. What’s the history of Shopin?
EE: The origin of Shopin is founded on the realization that most retailers don’t know the customers who visit their ecommerce sites, apps, and physical stores. Retailers are closing at a rapid rate for many reasons, and while some of these reasons are related to decisions made, real estate costs, remodeling costs, etc., they tend to all share one basic foundation: Low conversions.
Most stores have 10 walk-ins, and often only 1 out of 10 actually leaves the store with a purchased item. The lack of cash, due to the above mentioned challenges, has resulted in retailers’ chronic inability to invest in technology to help increase their conversions. Even the most tech-savvy retailers and fashion brands lack the ability to understand the totality of their customers. Case in point, if you love Bally’s and have purchased shoes there for 20+ years, all that Bally’s knows is that you like brown boots. They have zero knowledge about what else might be of interest to you. This cuts both ways. The consumer may have become brand loyal to Bally’s, but only for brown boots, and they aren’t open to looking around for other items.
The rapid deterioration of so many incredible retail brands was the genesis of Shopin, the world’s first decentralized shopper profile built on the blockchain that enables shoppers to own and control their complete purchase data and be rewarded financially when they choose to share that data with retailers. Using next-gen A.I. and blockchain technology, Shopin is helping to create a more sustainable retail economy where retailers become stronger by working together and shoppers get rewarded based on the value of the data that they fully own and control.
By setting up a Shopin Profile, consumers automatically store all their transaction and preference information on a secure blockchain database. They can keep the information completely private or choose to share it with their favorite brands in return for personalized recommendations and other incentives and rewards. Consumers also use their Shopin Profile to monitor shipments, initiate returns, and share their wish lists with friends.
The Shopin Profile is the first Federated, permissioned blockchain system that combines value (the Shopin Token) and data (preference and transaction information). Storage and distributed application processing nodes are provided by retail partners, while keys to the profile data are controlled by consumers. This design enables up to 1 million transactions per second, far more than those that use public blockchains.
The Shopin Token is used to facilitate the mutually beneficial exchange of information between retailers and consumers for more personalized and efficient transactions. Retailers exchange tokens with consumers in return for access to their profile data, and for permission to send them marketing offers and rewards for loyalty. Consumers can exchange the tokens for merchandise at participating retailers or into Ether that, in turn, can be exchanged for other fiat or cryptocurrencies.
Shopin is owned by UnitedData Inc. and recently established a Gibraltar entity that will enable it to operate more safely within the legal framework of a country that is crypto-forward. The company’s HQ is based in Brooklyn, NY, where Shopin’s more than 17 employees reside locally or work remotely from other cities.
2. Who are the founders and key team members?
EE: Our team has more than 15 years experience in building ecommerce startups, behavioral marketing solutions, and user profiles. Shopin’s engineering team includes the first and core engineers that architected the entire Priceline system from launch.
Eran Eyal, CEO and CoFounder
Eran is a serial entrepreneur with three exits as a founder and more than a decade of experience in retail and ecommerce. He is the winner of the United Nations World Summit Award for Innovation, Fast Company’s Most Innovative Startup, and he is an investor and advisor for many startups.
Divakar Rayapaty, CTO | CoFounder
Divakar was a Principal Software Engineer at Priceline for 14 years. As a leading member of the engineering team, he was instrumental in building Priceline’s core processing platform. Since then, he was the co-founder at Flowhealth, Director at Mezoclick, and co-founder and CTO at Maker’s Brand.
Abhishek Yermalla, VP of Engineering
Abhi is a seasoned architect with more than 12 years of experience in ecommerce and engineering.
Formerly a long-time member of the Priceline design and integrations team, he was twice awarded the annual CEO achievement award.
Jeremy Harkness, Blockchain Technology Officer
Jeremy served as the CTO and Head of R&D at Barrows, the CTO at HP Ticket, and CTO and Founder of Strattice, where he invented the world’s first remotely managed mini server and failover router.
Michael Herman, CRO
Formerly President of Global Sales at Elie Tahari, Michael has spent the past 20 years in senior executive positions working with international luxury brands Natori, Donna Karan, DKNY, Wacoal, and Valentino.
Doron Wesly, CMO
Doron has extensive B2C and B2B marketing experience and has worked for companies such as Lotame, Tremor Video, Mindshare, Samsung, Millward Brown, IAB, and Applebee’s.
3. What problem are you solving? Who are you solving it for? What is your solution to this problem?
EE: Shopin is reinvigorating the retail economy by streamlining the entire shopping experience. By deploying blockchain technology to store value, purchase, and profile data, we are scaling to facilitate a million transactions per second that empower retailers on the open web to provide a decentralized Amazon-like experience to their shoppers with recommendations powered by A.I.
- Fast checkout
- Recommendation engine
- A single wishlist
- No more forms
- Share your profile
- Shopin Token wallet
- Reconnect with customers (advertise directly to real people and reward them for their attention)
- Data on previous purchases
- Artificial Intelligence
- SKU-level information
- Personalization IQ games
- Crypto incentives
4. Why is retail ripe for disruption?
EE: Retail isn’t working. While online retail has taken off, there’s a lack of personalization and convenience from the shopping experience. A major contributor to the shift in shopper experience is Amazon. It accounted for 44% of ecommerce in 2017, according to eMarketer, up from 38% the year before. Needham predicts it will control more than half by 2021. More broadly, Amazon represents 4 percent of all retail sales in the United States. (Some analysts suggest that if you remove categories that are rarely purchased online, such as cars, gasoline, and (for now) groceries, Amazon’s share looks twice as big.
As a partner and retail rival, Amazon also presents a conundrum: While also providing a huge platform for wide product distribution, logistical support and marketing, all of this comes at the expense of a personalized relationship between the brand and their customers.
Sixty percent of small and mid-sized businesses say that more than half of their online sales come through Amazon and other marketplaces (such as eBay and WalMart’s Jet.com), according to a survey by NetElixir. The same study found that while these businesses found the marketplaces helped them increase sales, they are increasingly hobbled because of decreased margins and not owning the end customer.
As the owner of the shopper data, Amazon has given partner brands a disadvantage in personalized advertising. In a survey by Accenture, 73% of people said they prefer to do business with retailers who use personal information to make their shopping experiences more personal. In another study, 83% said they want to be recognized with personalized experiences across all devices.
In addition to dependence on Amazon, the retail industry has an issue with the utilization of rewards programs, which has largely left consumers unsatisfied. Consumers are growing ever more frustrated by the many complex point systems they are being offered that only rarely provide real benefits. There always seems to be a loophole that prevents you from getting the points you expect. Go to the same store in a different country, for example, and you are treated like a stranger. And when you finally accumulate enough points to collect your reward-surprise!–half the points have expired, or they don’t apply to the dates or products you want.
5. What’s the future of your retail?
Prediction #1: There will be consolidation in retail. We’ve already seen it with Amazon’s major purchase of Whole Foods and American Apparel last year, but prepare to see more big acquisitions from Amazon, as well as from Walmart, Target, etc. Large conglomerates will buy brands you’ve known as standalone, and some will be surprising. Brands are looking at middle market names with the widest reach and that are easy to distribute.
Prediction #2: Supply-chain tools will become better integrated with blockchain. More retailers will track supply chain through companies like Salesforce and Oracle. These brands will introduce new solutions on the blockchain, including distributed ledger accessibility.
Prediction #3: Retailers will increase their acceptance of cryptocurrency like Bitcoin as legal payment. We’re already seeing this from brands like Overstock.com, Expedia, NewEgg, and Dish and expect the list to grow in the coming year, especially as consumers are becoming more curious about Bitcoin