Tech entrepreneur aims to revolutionise shopping

March 4, 2014 12:20 am

Tech entrepreneur aims to revolutionise shopping

By Sally Davies and Andy Bounds

Dan Wagner, one of the most controversial figures of the UK’s dotcom boom and bust, has vowed to save the high street from “tumbleweeds and lawlessness” with the launch of a new digital shopping venture that he claims will change the way everyone shops forever.

The 50-year-old tech entrepreneur says more than 240 brands have already committed to using PowaTag – a smartphone app that will let users buy products straight from print and audio advertisements by detecting embedded codes.

The app is also enabled to interact with iBeacons, a new technology that enables brick-and-mortar shops to send messages to customers’ smartphones depending on where they are in the store.

“This flips the balance from online players to physical retailers,” Mr Wagner said, speaking from his airy west London offices of Bright Station, the company that manages his various businesses. “It’s an omni-channel platform that’s unique in the world.”

With his slicked-back hair, clear blue eyes and iridescent purple tie, Mr Wagner looks like the consummate salesman.

It is a role the serial tech entrepreneur knows well. A self-confessed “posterchild of the dotcom crash”, Mr Wagner became notorious for posing for photographs in a Donald Duck waistcoat as chief executive of Maid, a database aimed at advertisers that ended in a humiliating fire sale to newspaper group Thomson.

He went to found Venda, which runs websites for more than 100 retailers including Tesco, JVC, Universal Music and Boohoo.com, the fast-fashion seller set to float. Mr Wagner built Venda using technology bought fromBoo.com, an early online clothes retailer that crashed spectacularly during the dotcom bubble.

But unlike some of his past ventures, PowaTag relies less on whizzy innovation than it does on versatility and scale.

By bundling together various technologies and getting a large number of retailers to access them through a single app, he is hoping to create a ubiquitous purchasing and marketing platform that will become second nature for shoppers.

Customers include Universal Music, the world’s largest music company, British chains Waitrose and Argos, and Carrefour, the world’s second biggest retailer by revenue, which plans to introduce PowaTag’s audio watermarks into its television advertising.

Picking up his phone and launching the app, Mr Wagner took a photograph of a small geometric mark, known as a QR code, in the corner of a magazine advertisement for a peacoat. The app recognised the product and in a few taps Mr Wagner had bought it in the right size.

Other uses include letting people buy a product direct from a shop window or from a broadcast advert, to sending special offers to their smartphone based on their purchase history and location in the shop.

By merging the digital and physical worlds for consumers, PowaTag is pitting itself against innovative start-ups such as Blippar and Mike Lynch’s Neurence, which use algorithms to recognise real-world objects rather than relying on embedded tags.

But analysts say PowaTag faces an uphill battle to realise its greater ambitions.

“None of the technologies are groundbreaking, and I think the change in user behaviour to make people interact with them will be a hurdle,” said Sandy Shen, an ecommerce expert at research group Gartner.

“The company needs focus on the user value, whether through loyalty points or personalised messages based on consumption,” she added.

Apps such as Shazam – which lets people use their smartphones to detect the name of songs that are playing – might help acclimatise people to using audio triggers to buy products on their phones, Ms Shen said.

But PowaTag has its admirers. “When we saw the technology we thought it was amazing,” said Valerie Dassier, head of ecommerce at women’s fashion group Comptoir des Contonnier.

Comptoir will be including PowaTag marks in its advertising from May. Within six months, it expects to let shoppers scan clothes in the store to see how they look on models and when matched with other pieces. After this, the fashion company hopes to deploy PowaTag’s beacons to send greetings and offers to customers’ smartphones when they enter the shop, according to Ms Dassier.

While the iBeacon integration will start with marketing, the ambition was to eventually let it act as a checkout by recognising when the consumer is leaving the store, Mr Wagner said. The app will only be enabled for PowaTag’s beacons, which will go on sale for $99 for three sensors in the next few months.

PowaTag has attracted $96.5m of investment in total, mainly from Boston-based fund Wellington Management, for about a quarter of the business. The business will make money by taking a cut of each transaction – whichever is greater of either 0.1 per cent of the value of the sale, or 25p, 40c or 30 euro cents.

Mr Wagner expects PowaTag to be enabled in 500,000 physical retail outlets by the end of the year in Europe, the US and China.

If he achieves that, he may have a chance to reinvent himself from posterboy of the last dotcom crash to becoming the British face of the sector’s revival.

 

 

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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