CNME Editor Mark Forker secured an exclusive interview with Guy Mordoch, CEO of smart cart platform Cust2Mate, to find out more about how the Israeli start-up company is primed to completely disrupt and transform experiences in the global retail sector.
Guy Mordoch has enjoyed a phenomenal career in business.
In a decorated and distinguished career, one spanning two decades, he has worked for some of the world’s biggest multinational corporations in places such as Tokyo, Singapore and London.
However, Mordoch has now decided to change direction and move away from the corporate world and pursue a new challenge with mature start-up company Cust2Mate.
In April of this year, Mordoch was appointed as the new CEO of Cust2Mate, an Israeli-based user-friendly self-checkout ‘smart cart’ technology provider that is revolutionising customer experiences in the retail sector.
In a candid interview with CNME, Mordoch discusses his vision and aspirations for the company, one which he believes will completely ‘disrupt’ the retail industry on a global scale.
He kickstarted the conversation by outlining the capabilities of Cust2Mate’s smart cart technology.
“Cust2Mate is the leading ‘smart cart’ solution provider to the retail industry. The fundamental basis of the smart cart is the self-checkout capabilities it has, but it is also infused with a lot more value-added services that is being driven by data in real-time. I believe that our smart cart solves most of the pain points that are faced by retailers. If you examine it from a consumer perspective, we make the shopping experience a lot more enjoyable and time efficient. There are a lot of applications on the smart cart that only serve to enhance the experience. From a retailer perspective we are significantly helping them to optimise their operational efficiency and reduce their operational costs,” said Mordoch.
Mordoch added that the data provided to the retailer in ‘real-time’ empowers retailers better manage their inventory, and real estate in-store.
“We enable the retailer to utilise the real estate in a much more effective way. We also help the retailer to significantly increase their revenues, because we see that the average basket size of a smart cart is 30% higher than that of a traditional cart. We help generate personalised promotions in real time based on the shoppers’ habits and location in the store. In addition to this, a third of the screen is dedicated to advertising, which can either be done by the retailer, or through advertising that we sell to the CPGs and manufacturers. All these factors help retailers increase revenue and gives their customers better shopping experiences,” said Mordoch.
One of the biggest flaws since self-checkouts were introduced has been their inability to combat theft and fraud.
However, as Mordoch points out the sophisticated technology used by Cust2Mate makes theft almost impossible.
“It’s almost impossible to steal when using the Cust2Mate smart cart. We have implemented four different security measures on the cart that gives the retailer 100% bullet proof protection. Once a customer scans a product, and puts it into the basket there is an AI camera in the basket that identifies if that’s the correct item that has just been scanned. We also have a security scale within the basket, so if I am supposed to put in a product that weighs 1.2kg, and I put something in that weighs 1.1kg, then that will raise a red flag. In addition, we are in the process of implementing RFID for high price SKUs. These security measures that are built in are completely seamless to the customer, and doesn’t in any way impact on their experience at all. As I aforementioned above the technology deployed by Cust2Mate only enhances the shopping experience,” said Mordoch.
In terms of adoption of new technologies, Mordoch conceded that it is human nature to resist change.
He spent a large chunk of his career in the telecommunications sector, and he referenced the fact that when the telco industry underwent huge digital transformation around 10 years ago, they faced constraints in terms of adoption.
We know that some retailers have had their fingers burnt with previous self-checkout technology, so was it hard to convince them to adopt this new technology by Cust2Mate?
“The way we are helping our retail customers overcome this fear of technology is to conduct a POC phase. I’ll put 5,10, or 20 carts into a store, agree on the KPIs with the customer and when the KPIs are achieved after 30-60 days, we move to a full roll-out. Customers love our technology. We generate a lot of data on the carts and we can see that the shoppers absolutely love the smart cart experience. We can see that almost 60% of the traffic is returning customers, so effectively what this means is that people that use the smart cart overwhelmingly want to come back and use it again. So, even if you have a retailer that is a little bit conservative when it comes to new technology like smart carts, when they see that the average basket size is bigger, the valuable data which is generated, and customers really like the experience, then it’s a no-brainer for them to add more smart carts to their fleet in-store,” said Mordoch.
He added that the access to data in real-time was completely transforming the relationship dynamic between the retailer and the customer.
“Data is the name of the game, and we know that traditionally the consumer only meets the retailer at the end of the journey. However, with the smart cart the retailer meets the customer when they come into the store, and that really is a huge difference to the entire experience. It’s completely transformative for both the retailer and the consumer,” said Mordoch.
Cust2Mate have had huge success in Israel, and recently penned a significant deal with the largest DIY chain in the country. It has had wins internationally too, and also signed a deal with a convenience store chain that has 16 outlets in Manhattan.
However, as Mordoch pointed out, a lot of Cust2Mate’s focus over the last few years has understandably been on the product.
Mordoch’s job is to change their strategy and move away from an approach he described as ‘opportunistic’.
“My role as CEO is to change the strategy and our overall direction as a company. I think since our inception from a market perspective we were very, very opportunistic. Israel is an easy market for us, and we had a lot of success there. However, everything that we did globally was on an opportunistic basis. Essentially, what that means is we didn’t really have a strategy outside of Israel. I have a made a number of decisions since assuming the reigns as CEO, and the first of those is to make Israel my showcase market. The second decision that I want to take is based on the fact that we see around 50-60% of the smart carts globally are based in the United States. Cust2Mate is a subsidiary of A2Z, which is publicly traded on the NASDAQ. Most of my investors are in the US, so I need to have a bigger presence in the US and I need to increase our investments in this market, because it represents the biggest smart cart market globally,” said Mordoch.
Mordoch is planning on hiring a local sales team in the United States, that will lead the penetration of the smart cart market for them.
“There are many Israeli companies that believe they can conquer the world from Tel-Aviv, but I don’t believe in that. I firmly believe that you need to have local people on the ground., so our local sales and pre/sales team is going to be a key driver for us in terms of really cracking the US marketplace,” said Mordoch.
As referenced at the beginning of the interview, Mordoch has enjoyed a storied and fabled career with some of the biggest companies in the world, so why in the twilight of his career has he chosen to enter the volatile world of start-ups?
“When I’m asked why I joined a start-up company, the joke I tell people is, when you work for a big company, you make good money, but you’re not rich. I wanted to take the knowledge that I acquired from working for so many large corporations and implement it into a start-up company. The reason I came to Cust2Mate is because I feel that the company is really going to completely disrupt the retail industry. The beautiful thing is in our space it is a blue ocean, and the potential of the market is astronomical,” said Mordoch.
Mordoch declared that he doesn’t want Cust2Mate to be a hardware company, or a smart cart manufacturer.
“I want to have the best smart carts that are easy to use, but the whole idea here is the customer experience element – and the data capability, and value-added services that we can deliver on top of the cart. We changed our business model too. We no longer sell carts. I don’t want to sell carts. We have moved to a subscription-based model, and we can add additional services to that. The customer will pay more for value-added services based on data. I’m strengthening my product team right now, and I’m hiring a lot more data scientists, AI experts and computer vision personnel to develop this value proposition, which is based on unique services that are based on the data coming from the smart carts,” said Mordoch.
Mordoch concluded by saying a big advantage the company has is the fact they don’t need to sell the concept because the needs are there.
“We don’t need to educate the market on why they should adopt the technology. We just need to build the right strategy and execute it. I love a challenge, but this company already has great technology, a great product, and a proven track record of success. My focus is to take the company to be the global smart cart platform leader, and I believe as I said we will completely disrupt the global retail sector,” said Mordoch.