Successful online and offline: Startup LocaFox shows retailers how to move into the future
Less customers, less turnover – many retailers are currently worried about the increasing trend towards online shopping. Their problem: They missed the boat and have no idea about how to make their business visible in the age of digitization. The Berlin startup LocaFox offers a clever solution. With an innovative POS system and highly individualized advertising on Google and other channels, customers are guided from online research back into the offline world and directly into the store. We talked to LocaFox founder Michael Wendt about his experience in working with small and medium-sized companies as well as large concerns.
Michael, how did you come up with the idea of founding LocaFox back then?
My later co-founders and I have already been working in the field of e-commerce, partly in our own companies, partly employed. We noticed that the normal population is shifting their search for information further and further into the internet. For retailers who could not keep up with this, this led to real problems. We were wondering how retailers could be represented as a real alternative to online shopping in the future.
Today, there are numerous providers who support retailers in digitizing their businesses. What kind of advantages do you offer?
We are familiar with this topic and know, for example, that it is of no use to an owner-managed small shoe shop to open the next online shop or to participate in local platforms that have no traffic. When I open a local website for retailers in my region, I first have to make sure that the people who are at home there start using this site on their own. This is extremely difficult. In the Internet there are currently fewer but larger providers that attract customers. For the retailer it’s better to be visible exactly where his customers are already looking for products.
How does it work for you exactly?
LocaFox has two central services that we offer to retailers in order to achieve measurable results. First of all, we help them digitize their businesses. Many retailers still don’t have an inventory management system that can automatically communicate stocks and prices every day via the Internet. That’s why we offer them our POS system.
As soon as the retailer is able to send us detailed, up-to-date information about his actual product range every day, we take him to the really important channels his customers use to search, first and foremost Google. We are a partner of Google and are promoted by Google to digitize merchants. Ultimately, the point is that a normal person can search for a product on Google and then find out that it’s available at a particular retailer 1.7 km away.
How do you literally get your foot in the door and convince dealers to use your service?
LocaFox has existed for over 5 years. One thing has definitely changed during this time: Dealers today know that they urgently need to do something in the field of digitization. There is a fundamental willingness to talk to young and smaller companies if they offer the right solution. So we have no problem being taken seriously.
In order to socialise, we tried everything we could at the beginning to go to the shops with small dealers. At this point, however, it is important to mention that we have several newspaper publishers as partners with whom we cooperate. These know the dealers from many years of cooperation, e.g. with newspaper advertisements, and especially in the first years they sought a conversation and suggested LocaFox as a solution. If you have a solution like LocaFox that is really innovative and that dealers cannot implement on their own, you will be heard. Today, retailers find us on their own, especially via Google, when they seek information about new POS systems.
Still, I’m sure you met some reservations at first, didn’t you?
With small traders it’s often about every cent. Sometimes we also have to help them to implement the investment in our POS system correctly to make sure that the expenses quickly return to the store. It was also important at this point to make retailers understand that it is about getting more people into their stores and not about them becoming online retailers and shipping their products to Turkey, for example.
As far as digitization is concerned, companies can obviously learn a lot from you. But what have you learned from the established companies you work with?
Large companies can be real role models in terms of how to manage projects. The willingness to pull something through and raise money for it is often much stronger in corporations than in smaller companies. If you are lucky enough to meet the right contact person, you can simply say: Ok, we’ll do it now! Startups can learn a lot from this self-confidence.
Do you have any suggestions for other founders who are just making their first contacts in this direction?
I think companies appreciate when you don’t constantly present yourself as the small start-up that you are, but as a competent business partner. Often they don’t want to bake small bread rolls, but really get going. One risk for start-ups that work with large companies is that their own existence depends too much on a single order. Don’t let it be seen through, but show your self-confidence! You can make clear that you are prepared to make certain compromises, but not at any price.
Finally, the question of questions: Does retail have a future?
Absolutely. Of course, online trading already offers a few advantages, such as information transparency. For example, I have the feeling online that I can look at all opinions about a product and at least seem to get a very independent picture of what I should buy. And, of course, the choice is much wider, because you can access millions of products from home, but at the same time, normal retail offers advantages that online retailing can’t copy: I get a product immediately when I need it. You can also touch products, try them on and try them out. This is extremely important for clothing and expensive products. Another role is played by the personal approach of a salesperson who really gives good advice. But: The dealers have to show themselves where the customers are looking. And that happens far too little.
Contact info LocaFox:
Ambivation connects established companies with startups for innovation partnerships. As an innovation consultancy and matchmaker, Ambivation facilitates collaboration between founders and executives for general exchange, concrete customer, supplier or research partnerships. Ambivation supports companies in the identification of needs, startup identification, startup evaluation and initiation of cooperation. Formats such as research of relevant startups, startup monitoring, strategic cooperation consulting or event formats such as startup tours or Design Thinking workshops serve this purpose. The monthly newsletter also informs curious company representatives about current collaboration examples and events related to these cooperations.