Transcript
Peter Crosby:
Welcome to Unpacking the Digital Shelf, where we explore brand manufacturing in the digital age.
Peter Crosby:
Hey, everyone. Peter Crosby here from The Digital Shelf Institute. There is nothing more fun for us than bringing back an innovative guest two years later and seeing how their idea has blossomed to reality. The company Cooler Screens has spent more than five years setting the bar for creating human-centered digital experiences in physical stores. The combination of vision, strategy, and smart technology, along with collaborations between innovative retailers and brand partners, is now bringing the ease, relevancy, and transparency of the digital world into a human shopping journey at an impressive scale, including hundreds of stores at Kroger and way more to come. And selling more product as a result. Arsen Avakian, CEO and founder of Cooler Screens, rejoined Lauren Livak and me to fill us in on what's now and what's next in this transformative collaboration between brands and retailers.
Arsen, thank you so much for coming back on The DSI Podcast. We're really grateful.
Arsen Avakian:
Thank you. Thanks for having me.
Peter Crosby:
When you joined us initially in June of 2021, I mean it seems like yesterday and somehow forever ago, but your company was one of the early entrants in really bringing digital experiences alive in physical stores. And now two years later, we're really excited to get caught up on how that vision is becoming to life and how it really has intensified the collaboration between retailers and their brands to, if I can badly mangly paraphrase your website, to bring to the ease, relevance, and transparency of the digital experience into brick and mortar. You recently had a chance to bring them both together, retailers and brands, to talk about the experience that you were trying to create in store. And so you had that gathering. What were some of the takeaways that you had? Because they get together less often than you'd think and they need to talk to each other. So I'm excited to hear what you heard at this event you put on.
Arsen Avakian:
Peter, thanks for having me. And you're right, time flies. A lot changes, and this has been definitely a fast moving situation for the industry, for us, and I think for all of the stakeholders.
Yeah, you're right. So every year we have this private invite only innovation summit. And this year we co-hosted that with Microsoft, Kroger, and media, a bunch of great companies, publicists. So it was a much wider participation. But it's a small private event. About 200 folks, invite only. In fact, we had a sold that situation. One of those situations have to pick and choose who you let to come into that event.
But we curated the conversation because we learned that over the past five plus years since we started the company, that retail media sits at the intersection of a lot of different stakeholders that all come from different backgrounds and different perspectives and almost like different vocabularies.
Peter Crosby:
Yeah.
Arsen Avakian:
Media guys have their perspective. Technology entirely different view. And then of course, retailers have their retailer talk and from data to what they really care about what's important. So we learn over these years bringing a curated list from multidisciplinary, I guess, areas, into one room and facilitating a conversation where brands and agencies and retailers and tech companies, platforms, all can speak, not at each other, but with each other, speak to each other, to understand and translate what's important and find a common ground. So that's really what that's about. And every time there's a different twist to the theme and where we double click. So a lot of interesting takeaways, but that's the summary of what the event is about on high level. And we'll have another one soon. We'll send a save the date for in our invite list for next year. I think it's, let's just say it's the first time we'll take the show to Silicon Valley, because we think that's where the puck is heading with the retail media.
Peter Crosby:
Well, I know it's very exclusive, but if by chance an invite happened to swing over The DSI way, we'd sit in the back, we wouldn't say anything, I promise, but just to witness the-
Arsen Avakian:
Peter, I might even ask you to be on a stage with some folks.
Peter Crosby:
Oh my God. Well, now you have something to look forward to regret, if you do that. But, yes, I mean it's a little bit stunning to me, and I've been in this business for a decade, which is, wow, just sometimes the barriers that can rise up between not only retailers and brands, but also the teams within them all. And not necessarily through anyone's intention, but just the world's become so much more complicated.
Arsen Avakian:
Right.
Peter Crosby:
And more immediate, and it just requires just much more intense collaboration that requires these kind of conversations. It's just all sped up, right?
Arsen Avakian:
Yeah. And I think there is also the newness element. I mean, as I like to say, detail media is being repackaged as we speak.
Peter Crosby:
Yeah.
Arsen Avakian:
Because the sophistication levels are rising and the early versions of what retail media meant, were really jumping into what Amazon is doing and mimicking kind of that playbook. Which has worked obviously extremely successfully for them in the online world. But as the brick and mortar larger retailers like Kroger and Walmarts are entering the space, they're bringing both their sophistication but also the nuance of a physical world being entirely different. And I would say the biggest elephant in the room that perhaps only now people are noticing is most of the retail is actually still happening in physical stores. It's not happening online.
And when these stakeholders kind of start saying, "What is in common between all of our different angles and views as well as obviously commercial interests?" I hope, and I think it increasingly is becoming the obvious that we all find one thing in common. That if we don't nail the consumer experience, with those, what maybe been media guys will refer to as the eyeballs, and the retailers will refer to them as the shoppers, and then maybe the tech guys will refer to them as traffic? Everybody will have a different kind of a word for calling it. These are at the end humans, that are experiencing something that's either additive and valuable. And when we talk about retail media online or in store, we're solving some unmet need or a need that they didn't realize can be satisfied in a better way. We're never going to get to the destination, which is there a business model to create where everybody wins and we can monetize the media in a way that is a win for the consumer, it's a win for the retailer, and a win for the brand.
Peter Crosby:
And that's why I sort of stole the line from your website. What the digital world brings with it, almost by its very nature, but also because it's continually refined, sometimes from minute to minute, is ease, relevance, and transparency. And I love the idea of being able to merge that into each human being's experience within a physical store. So can you tell me a bit if that was where the conference was at, what were some of the takeaways and the kind of big headlines out of that conversation and how is that coming to life in the world?
Arsen Avakian:
Yeah. I would say there are three important takeaways that are near dear for me as personally, but also to our company's vision that we discussed at that conference. One of them is to achieve that superior in-store consumer experience or even online, we have to be working backwards from the need and a goal, objective, to achieve a better human outcome, by connecting what we call heads and hearts of the consumers in the stores. Number one, and I can unpack that in a second. Number two, all of this technology and sophistication is continuing to mature and find its way into, I guess the world and into our everyday life. So applying the analytics and the science of digital commerce technology, but very importantly with the creativity and the content and all tailor built for the physical store, is a core component of I guess what we hope to be the winning formula. And then finally all the store is a stage. If we treat the technology and the capabilities as the backstage capability to help deliver on that both the better consumer experience as well as a better performance for the business, whether it's the brand or the retailers.
I think the combination of these three things is where the sweet spot comes together. And so the takeaways from the conversation we held with all those guys, all those participants, was what is the North Star? And I think we arrived let's find the consumer experience that satisfies some real needs for human outcomes, which could be everything from like you said, the ease, relevance, convenience, efficiency, or even entertainment and delight, helping people make decisions when they shop and be rewarded for their actions. If we can satisfy some real needs for the consumers and we bring a thoughtful application of a technology and analytics and science to this new environment, then I think we will achieve this, I guess trifecta of the win. Consumers will win, retailers and brands will win, because we will have a better performance.
Lauren Livak:
I love the human element that you bring into it because I think sometimes we forget, on the brand side, you're thinking about how you're reaching the customer and you might be thinking more tactically and the retailer's like, "Okay, how am I driving more people in the store?" But at the end of the day, the consumer is looking for an experience. And you've used that word a lot. And I think that resonates so much now with the consumer of today. It's not just transactional. They want to have the ease, the convenience. They want to have an experience that's different than other stores. And that takes that collaboration between the brand and the retailer side in order to do that because both of those pieces of the puzzle equal experience. So I would love to hear from you what experiences you're seeing to be valuable or examples of how those two sides, retailers and brands, are coming together to create those experiences.
Arsen Avakian:
So, I mean definitely Lauren. I couldn't agree more with you. And again, a lot of people ask me over now six years doing this and doing it at a relatively large scale saying, "How come all the other guys in the past have come in, everybody thought, 'Oh, we got a bunch of eyeballs in the stores. Let's go monetize it." It's a very simplistic approach and I would say, "Look, I just happen to have now more time where I have made more mistakes than others." So it's kind of like when people say, "Why Cooler Screens? I say, "Well, because I made more mistakes than pretty much anybody else out there."
But I also had the opportunity to look back over decades of other attempts, whether it was digital driven or not. But the idea is that there are a lot of people in stores online or in physical, let's just go monetize that in addition to selling them physical products in the aisle but also let's sell them I guess, impressions. Even if it's a paper sign hanging. Why didn't that work? Why did Walmart rip out all of the Walmart TV triad? There is plenty out there in the graveyard, examples that we can point to and say , "What is different and what should be different going forward?"
And I think it goes again to that the consumer experience approach should start with the human outcomes. And when you start saying what really matters to humans and you personalize it, it comes down to we go to stores because it's convenient, because we want the efficiency. We want entertainment and delight. I mean, at least my kids look forward to those samples at Trader Joe's or at Costco. At the same time-
Peter Crosby:
I am your child, in this scenario.
Lauren Livak:
Ditto.
Arsen Avakian:
That's usually my lunch, sometimes.
Peter Crosby:
Right.
Arsen Avakian:
We also have been so much trained now by the Amazons and all online players that when you prioritize information that helps you make a decision when you're looking for products or services. We all know the filter boxes. You sort by the ratings, by calories, by sizes, by colors, you name it. All of those ways where you can prioritize the information to make a better decision. Well, the analog world of physical stores just didn't have those capabilities prior to recently. You would walk in and the consumer experience was limited to metal shelves with the product on it and maybe a paper plastic sign that was hanging, screaming at you, "Buy me, buy me," or, "I'm really good." That was it. Nothing was coming at this from a human perspective saying, "Am I giving you an information that helps you?" Maybe I don't know the difference between Advil and Tylenol? I don't know if this particular product is covered by my HSA or FSA or Medicare card? Or I'm on a gluten-free diet and I'd love to find that cauliflower crust pizza easier.
So you can start all of a sudden applying that across products, across categories, across channels and say, "Wait, if we actually start talking from what need we're solving for, which is not overly sophisticated or complicated. We're humans and we just want to have fun, make it convenient and easy for us, and give us information that helps me make a decision? I will reward that as a consumer back to the business. And also feeling rewarded for the business we give. We know that one of the biggest drivers are the coupons and the loyalty points and the discounts, the TPRs.
So I think those are some of these that I hit on, Lauren and Peter. I think these have always been the North Star from my perspective, but it's clearly a messy road to try to find your way to that intersection where you can apply, I guess this consumer experience driven North Star to the monetization need, because something got to pay for the whole thing. And that's where the mistakes happen. And that's what I guess that conference really spent a lot of time about that. And then of course then it kind of deep dive double clicked on saying, "Well, how do we do this so we make money? How do we do this so we can measure to make sure that we're not wasting money? How do we do this so that the retailers lean in with us and don't see this as a retailer or vendor kind of a fight, let's just twist their arms and get more money out of that." But rather this is together. Let's do something good for the sake of a consumer and the consumer will be rewarding us with more business.
Lauren Livak:
And Arsen, who's doing that well? Who's leaning in? Do you have an example of a retailer who's really kind of working through a program like that?
Arsen Avakian:
Well, Lauren, I'm biased to be honest with you, of course, because I mean, you probably heard at that innovation summit we also announced of a big national relationship partnership with Kroger. We've been in a very kind of a quiet three and a half plus, nearly four years, pilot with them. I would say testing and learning, making these mistakes, until we saw that we're hitting the sweet spot close enough. I would never say that I'm hitting the bullseye. But I think Kroger has been very inspirational in their mindset and the culture as a merchant.
Like give you guys a particular specific example of how that manifests itself in real life. So we'll have a few hundred stores rolled out shortly, but the first 100 stores of Kroger, which is billions of dollars of addressable sales for the CPG companies to start investing marketing in, that's happening as we speak for the fourth quarter activation. So we invited select brands to participate in submitting applications for those marketing programs in the stores. And the criteria that we set out was not, "Oh, you give me more money and give me now, and that's it." Which a lot of times could be the simplistic way of thinking about it from an advertising side.
We, together with KPM, laid down a very clear set of guidelines. We said, "First and foremost, tell us how does that help the consumers," which is this human outcome part. "How's this additive to the experience of shoppers when they walked into the Kroger stores?" So just that question alone sets the tone of this conversation. Secondly, we talked about, "Tell us how you're going to make a creative use of this canvas." I think a lot of times we also fall victim to thinking that the technology and the algorithm is going to do everything for us, and we forget the pure human part of it, which is it's got to be fun, it's got to be cool. When you think about a lot of ads on TV, I think many of us get glued to the Super Bowl ads because we think that they're going to be fun. It's almost like an entertainment part of, even though we know it's a promotional content.
So we wanted to ask the brands that start with the consumer experience about what outcomes you want, how do you want to help the shoppers? Then two, tell me how creative you're going to be. And only three tell me commercially how you going to make this all work and how deep you're going to look into the analytics and the capabilities of the platform so that you can drive a better performance? We don't want people to waste their money, spray and pray that it actually works. We want measurement, we want accountability, and the transparency upfront. Because if they win, and again, this is I think what Kroger has been always preaching in the retail media. They want to bring a transparency to the supply chain of media. They want the brands to feel the value that they're getting back. But at the same time, they want the brands to understand what value retailers are expecting, which is consumer experience improved, the creativity that makes their stores to be experiential, and three, understanding the data and be driven by the data to drive their performance versus let's just hope it works.
Peter Crosby:
Can you give us a couple of examples, from the human being's perspective, some of the experiences that have come to life that really stand out to you as the smartest combination of all three of those?
Arsen Avakian:
So food and beverage aisle, I would say, Peter, always comes down to the nutritional preferences. Consumers are looking for as simple information, and I know you guys at Salsify you know better than I do this. They're like, "How important is that simple data to satisfy different needs for diets?" People want to know the calories, they want to know sodium, sugar. But you have to understand maybe frozen food, sodium and calories or fat is more important, and of course beverages and sugar. So you have to bring that level of, I guess, nuance to give the people the information you need. I think in a physical store, we are always constrained by how much information you can squeeze there versus on a website you have this unlimited digital ability to put anything you want.
So in a food and beverage, I would say that's a very clear use case that we see every day. When you go into the pharmacy, you go into the health area. I would say there is not only understanding, like a pure educational element that's important, like patient education, explaining them to understand that very simple example I brought up earlier, what's the difference between Tylenol versus Advil versus Aleve? They're all painkillers as far as we're concerned because that's the big shopper navigation banner hanging in the air. That's all we know. But understanding the differences and the nuances, which today with stores being labor strapped and not having pharmacists on hand easily or shop assistants to talk to, that becomes an opportunity.
Another one that we saw firsthand at Cooler Screens is pretty sad to learn that in a healthcare crisis that I guess the company has or the country has, medication adherence is a buzzword, which is a problem for a lot of people. In other words, doctors would tell you, "Go and take these specific medicines or vitamins," you name it. And a lot of times people assume they can't afford it and they don't adhere to the instructions from their medical providers. If only they knew that maybe their FSA card or their Medicare could cover that, the adherence rates would go up significantly. And that's another example where you can have a real human outcome.
Kroger has another general strategy which we're so excited about to bring to life through the technology. They call it Food Is A Medicine. As the largest grocery in the country they realize that they have an enormous power over the diets of the people that leads to a better, I guess, medical outcomes or health outcomes where the shoppers are also patients. So can we use the canvases that's in stores on those end caps, on those walls, at different parts, to educate the consumers about healthy lifestyles, which lead to a better outcome both for a consumer but also to better business because they're buying better products, which usually are probably more expensive, unfortunately.
So those are examples. And I'm also excited, and we're working on that at Cooler Screens in partnership with Nvidia, as I think generative AI and natural language capabilities start becoming real possibility. That UI, if you will, UX, can become also very natural. Imagine being able to speak to the Kroji, which is the symbol of Kroger, inside their stores and being able to ask a question which will point you where the gluten-free cauliflower pizza is. Or ask that question. So information starts becoming a powerful lever, not only in a visual format, but also potentially in this other gen AI use cases.
Peter Crosby:
Well, that's what I was curious about because sort of your genesis came in the frozen food and beverage aisle with the big doors and putting displays and messages up there. But in order for you to be in other aisles, that can't be the case any longer. So how are these experiences coming to life for the individual human being that you're talking about? Like technically, technologically, how is that happening today?
Arsen Avakian:
Yeah, Peter, that's a great question. So for us, the vision was, I mean, we started obviously applying the technology in the cooler freezer aisle because that's where our first customer, Walgreens, wanted us to focus.
Peter Crosby:
Yeah.
Arsen Avakian:
But as we have grown, we realized with our partners that they're looking what, I guess some of us will refer one store, one platform. We want a smart store that is able to coordinate all of these digital experiences across the whole box but embedded into the consumer journeys in the stores.
So the approach we have taken, we said, "If we treat the store as a stage and we have built the sophisticated technology, which is a combination of IOT sensors that all of a sudden give us the analytics on what the shoppers and products doing in the store?" All of a sudden a physical store became like a website. I know what's on shelf. I know what's in stock. I know if the customer is just on a browser approaching these, I don't know, let's say home goods or the pharmacy section. I know if they're clicking on a Proctor and Gamble page, if they approach the diapers. And then I know if they're on a product detail page and they're spending 20 seconds or five seconds.
All of these data signals in our technology overlaid with the retailer data sets, which is understanding from their transactions, from their loyalty databases, from their pricing data, from the promotional prices to the regular prices, to planogram data sets, the brand or category development indexes, we can start deriving a algorithm to know what content to show to people that will lead to a better conversion. Internally, we refer to that, I guess, and getting a little technical, as an intent coefficient.
This intent coefficient or the intent index, very similar to how Google has created their version of that, what you search and what was your history, that they will look up for the cookie. They can I guess, extrapolate the intent and thus serve you up the content as your top three or four search results on the website. We will have a very similar, except we will leverage the data signals we collect in a store about the products and about the consumer motion, attention, and action, with the retailer data, like what's on sale? Is it on regular price or on discount? Is there a coupon? Does it have five facings or three facings and so on. And being able from all of these, I guess data signs, I hate using the word AI, guys, because it's such an overused right now kind of word that it's almost offensive when some people doing it. They're really doing it and then everybody else is talking about it.
But once you are able to analyze this data and from there have a recommendation engine that says, "This content will hit the sweet spot of helping a consumer and driving them to essentially make a purchase." Which drives the performance. So we built that software and that's I guess the five, six years of failing and making mistakes, I call it. And then we realized that the retailers are looking for this software or this technology to be applied across the store. Because you don't think of a shopper who walked in, "Oh, she just walked in at the entrance or she's at the coolers or she's at the diaper section." In fact, if you look at the data, you'll learn that most young moms will actually go first to the coolers to pick up the dairy. They'll pick up the milk. And then only at the end of their shopping journey, they'll stop by the diapers because they're bigger and bulkier, and then they'll go to the checkout.
Peter Crosby:
That's interesting because I always go to the chocolate bar aisle first and start having some chocolate-
Lauren Livak:
Through the store.
Peter Crosby:
-to keep me going through the store.
Arsen Avakian:
My journey is always-
Peter Crosby:
I pay for it.
Arsen Avakian:
-the sampling station at Costco. That's where I start.
Lauren Livak:
I go to the ice cream at Costco and then shop. But Arsen, so I mean that's really exciting, all that data and information you have about not only the shopper, but how they're shopping and what their journey looks like in store. What does this mean for brands? When we think about what's going to happen in the next six to eight months, only because I don't think we could think about a year because too many things would change. What's the major opportunity for brands with all this data, with thinking about the human element? What should they be thinking about from your opinion?
Arsen Avakian:
I mean, Lauren, simply said, it's all about who has a better mousetrap for people to drive better performance. We're all capitalists. And all of these brands they're going to talk about, "I want a better consumer experience," but they're really there to sell more product. I'm trying to simplify this. So at the end, brands are not waking up and saying, "I'm going to spend more money on Instagram or in store with Kroger or on Amazon online." All they're trying to do is they want to sell more of what they make. But at the same time, they want to build the brand equity, which is a relationship with that customer. So the long-term value of these customers becomes much more profitable and much more enduring, just like some of our iconic American brands have done over centuries now.
So they have two goals, brand equity, building brand equity, and driving performance. Nothing else at the end is going to matter. When it comes to building brand equity, they're aligned with the retailer because they want better consumer experience. If you give a bad consumer experience, brand isn't going to buy your Coke or your diaper from P&G. Similarly, they're aligned with the retailers because they both want to make money. Retailer wants to move the product off the shelf and the product is made by the manufacturer so they want to sell more product and ship more. So the good news is that I think on that fundamental trivialized way of saying it, they're all very much aligned. But the tactics of execution get very messy and sloppy. And this is where those mistakes, or paper cuts I refer tom can end up become very costly and very, very grave if you forget what matters, which is the consumer.
So I would say what matters going forward is understanding that technology is then only if it's applied for a good human outcome. And if it's only there and it's sustainable, if it drives performance. If it doesn't perform and it doesn't help solve a real problem for consumers, it's going to be dead. So I saw the recent announcements. Everybody now is rushing, "I'm going to put up a bunch of screens in my walls in Walmarts and blah blahs." In some ways I say, "Well, they're going to go through this kind of a 1.0 version of making the mistakes and saying, 'Oh, shoot, what's going on?' And then they're going to say, "Well, philosophize, we're going to align on CX and performance. And then two, well, how do I do that sustainably?'" Which is where the AI and data and the algorithm become important, because doing that at massive scale and doing it sustainably, that is what's going to make a difference. Otherwise, you'll have one-off initiative that works, but then you can't replicate that, you can't sustain that.
Peter Crosby:
Well, and that's the beauty of digital, is that it can respond quickly from the data it's getting. I mean, I know there's steps to it, but it's so much more changeable than standard in-store experiences. If you find out something doesn't work on a Tuesday, in theory, on a Wednesday, you could have that campaign updated so that you are testing a new result, which is super exciting. So when I think about the great swath of our listeners, all of them incredibly intelligent beautiful people. So when you think of them, in a reasonable timeframe of say by the end of 2024, is it still an application program where only certain brands are getting access to these kinds of programs?
Where do you see the adoption? Because I'm sure it's expensive for retailers to put in all the sensors and do all this, so I'm sure it's a significant investment besides of course what they pay you and et cetera. So how do you see this scaling in a way to start to bring this to more brands within grocery? And then do you see a time where it's happening at Lowe's, where it's happening across in apparel stores? Or are you sort of for the next couple years we're getting CPG right, and then we can figure out. I'm just trying to see how excited our listeners should get.
Arsen Avakian:
No, it's a great question. And I guess, look, if I could predict the future, I'll be working on Wall Street.
Peter Crosby:
Don't do that, Arsen.
Arsen Avakian:
I think, no, I love tech. I love retail, guys. There's no way I'll be dealing with Wall Street. But, look, my view is it's inevitable. I can't give you a timeline. Is it six months or it's going to take two years, but I think it's in the short term. It's an inevitable evolution that's happening because of two macro trends. One of them is I think the digital advertising of the past, kind of the last 20 years, is under tremendous pressure because of the privacy. They have built an algorithm for that one-to-one, I know that's Peter, I know it's Lauren. I'm going to kind of get creepy and look into your trackers and cookies and all that, and then I'm going to give you this perfect creepy experience, which we said, "Timeout. It's not good. It's not acceptable." So the regulators woke up to it, others woke up to it, humans woke up to it. So that world is kind of scrambling right now to figure out what to do.
In the meantime, retailers have smelled the opportunity. They realize that the simple trade or shopper budgets that they were getting through analog circulars on the bottom of the baskets or the paper plastic, they were only scratching the surface. They're sitting on a tremendous, not only a scale of their stores, touching essentially every American, every human, but they're also sitting on a tremendous trope of data that tells us a lot more. Who caress about likes and taps? We care about did customers buy it? Did they come back for it? Did they spend time talking and engaging with that product?
Now, again, digital online has a tremendous pure world of opportunity to learn about what is happening with products and customers. Don't take me wrong. I'm not saying online is going anywhere. It's going to continue to grow. But we learned that majority of sales are in stores. Technology is just inevitably going to make its way into the stores. And this is where there's going to be trials and errors and evolution to try to hit that sweet spot of a consumer experience and business performance that we talked about earlier. And some will get it right, some will get it wrong, and then others will learn from others and they will repeat. And so this will be an iterative process.
I think the big dominoes are falling. Obviously you learned about our expansion with Kroger. Walmart announced their version of that, blah blah. So I think when the big dominoes fall, others are going to have a FOMO to want to follow. But this also going to drive now the rethinking by the CMOs and the budgets, I guess at the brand side, which is, "Okay, where is the puck heading? I can keep on sending the money into one of these digital platforms without naming one of them and pay for the likes and followers and really be guessing if any of these money brought me more money, made me more sales? Or I can actually work with the retailers who are going to give me a lot more information about what's happening with my marketing investments."
And then if the AI tech gets even better, as it's inevitably happening, then you have this precise marketing activation opportunities that are recommended to you by the retailers and by the algorithm behind it, where I know that I'm putting a dollar and I'm getting three back. Why wouldn't I want to keep on doing that versus my alternatives of the past where let's spray and pray and let's just say that whatever that dancing video on TikTok has given me a bunch of likes, but I don't know if that really turned into business? So I think the forces of gravity are eventually going to settle this in a slightly different mix of marketing they say than it has been in the past 20 years.
Peter Crosby:
And just to close out, I mean you mentioned privacy. It's so important. And one of the things that I saw on your site was you guys were the first digital platform to be certified for the Privacy by Design Global Framework. And I think that's so important because as you said, everyone's scrambling. But when you approach it, you've been in a way lucky enough to approach it from scratch in a time where you knew this matters and we need to have a different way of not being creepy. And it sounds like you've found that as well, which is critical to making that human being feel helped and excited and relieved rather than, "Wait, how did you know what I mean?"
Arsen Avakian:
Peter, listen, it's also very near and dear for me because I mean, I wanted to build a business with that consumer kind of CX is a North Star, and when you say that CX is a North Star, besides the utility and the emotional element to it, there's also basic, you have to respect and advocate the consumers. You cannot just apply technology unbeknownst to them in the ways that they may not be okay with. So that's just a human value that me and people I work with and the retailers I work with, we all share that.
But then there is another very technical kind of a part of this. When we started the company, we said, "If you take the algorithm of the digital world," which is optimized for that one-to-one experience, it's one person with one device, my laptop or my phone, and it's a one-to-one experience. The technology that of the old, I guess big tech, big media of the past, have been built on optimizing that one-to-one experience by understanding everything about that one person, which is identity intrusive way of doing it.
When you go to a physical world, in the aisle at any point in time there will be me, Allie, Lauren, and Peter at the same time. It's a one too many world. So when we say we've built, I guess I don't want to use the word, but I guess we've built a Google, but tailor built for a physical store, physical world environment, the fundamental difference between what Google does, it's a one-to-one experience versus when you go on, I guess our platform in a store, it's a one-to-many experience. So we needed to understand not the identity. We said we're going to be identity blank because that doesn't matter. If I give a perfect content that appeals Peter, but Lauren is pissed at me because whatever I'm serving as a content to Peter, I'm optimizing for one human in the aisle, but three other people are saying, "Well, that's irrelevant to me. You're just blasting ads at me because you can and I'm not okay with that. You're intruding my kind of shopping experience."
So that, like I said, is the technical reason why we embrace privacy by design, because we said, "We have to build for one-to-many, and that algorithm needs to have a contextually relevant content predicted and served in a store that appeals to that segment of customers, which is 3, 4, 5 people at the same time." Versus online you and I and Lauren can at the same time go on amazon.com and guess what? All three of us will have a different experience because their algorithm is trying to maximize the performance just for that one-to-one relationship. Versus physical store, it's a one-to-many relationship. So I'm saying this because people think that, oh, we embrace privacy because we just had the altruistic vision that it's what's going to happen six years ago. Well, we believed in basic human value. You got to respect us. Don't collect things and don't do things to us without us knowing about it. But at the same time, like I said, physical world has very clear nuance of a one-to-many that doesn't exist in a pure digital one-to-one relationship.
Peter Crosby:
Well, we started talking about the collaboration between brands and retailers to bring this to life and I love that you've found a way to, because we talk about this all the time, the pressures of business today, of doing more with less, of making more money, and making a profitable omnichannel business is at the top of everyone's mind. And that can sometimes cause bad behavior. and what you've been able to do is point towards a North Star of both an excellent human experience that leads to an excellent business experience. And that's exciting, and I look forward to experiencing it myself and seeing what happens. And thank you so much, Arsen, for updating us on what's going on. It's so exciting and cool for Cooler Screens to be on again.
Arsen Avakian:
Thank you.
Peter Crosby:
Thank you.
Arsen Avakian:
Thank you, Peter. Thank you guys. You're very kind. And like I said, we live and learn and we make a ton of mistakes, but all with the right kind of a North Star. And if our heart is in the right place, then all the minds will work on achieving that.
Peter Crosby:
My best wins have been my failures.
Arsen Avakian:
Exactly.
Lauren Livak:
And we're all humans and we have to remember that. So I really love that. So thank you, Arsen for sharing all of your knowledge with us.
Arsen Avakian:
Thank you, guys. Thank you. Thank you. Pleasure.
Peter Crosby:
Thanks again to Arsen for this glimpse into the present and future of the digital and physical shelf merging for better outcomes, for humans and your business. Swing on over to digitalshelfinstitute.org and become a member to keep up with everything that's cool in commerce. Thanks for being part of our community.
