Personalizing the Meridian of Technology and Human Sentiment: An Interview with CEO BIRDZI, Shekar Raman
Personalization is the critical differentiator for grocers operating at the intersection of data and human emotions. Consumer intelligence is pivotal for effectively improving grocery margins and is a crucial aspect of personalization, which is vital to attracting and retaining busy consumers juggling multiple responsibilities at work and home.
Birdzi’s Customer Intelligence and Engagement Platform uses artificial intelligence (AI) to help grocers increase sales and provide an enriching, personalized experience for shoppers. Birdzi synergizes loyal shopper data to create unique profiles and leverages AI and machine learning to provide valuable analytic insights to grocers. Birdzi offers VISPER, a self-service platform for grocers that provides a comprehensive suite of personalization solutions structured into four distinct levels that drive shoppers back to the grocer and increase basket size, helping retailers develop customized promotions and improve revenue.
In this exclusive interview, Grocery Doppio and Birdzi founder and CEO Shekar Raman discuss the company's vision and objectives on how it's transforming the retail grocery industry by providing holistic insights interpreting customer data to grocers resulting in a significant increase in their incremental revenue as much as ten times.
Grocery Doppio: Tell us about yourself and what inspired you to start the company.
Raman: My educational background includes a master's degree in electrical engineering from Villanova University, where I specialized in signal processing and pattern recognition. After completing my studies, I worked on human genome projects for several years, utilizing neural networks and pattern recognition techniques to analyze and identify DNA sequences. I gained valuable experience during this time, working at UPenn and UNLV for a combined period of about five years.
Following my work in the human genome projects, I joined Bell Labs in New Jersey. There, I became part of the speech recognition group, where we focused on developing speech models, collecting data, and running speech recognition algorithms. I dedicated approximately five years to this role, further expanding my expertise in the field. After my tenure at Bell Labs, I transitioned to Wall Street, where I worked with a Fortune 50 firm and managed multiple data centers for them. It was during this time that I had a fortuitous encounter with my eventual co-founder and founding team. Interestingly, at that point, my involvement in the grocery industry was limited to being a shopper.
At that time, my daughter, who was around 11 years old and attending elementary school, approached me for assistance with an invention project. Eager to lend a hand, we brainstormed ideas for her project while navigating a supermarket's aisles, armed with my wife's shopping list. Frustrated by the difficulty of finding items on the list, my daughter suggested inventing a solution to help people locate products in a supermarket. Excited by the potential of my daughter's suggestion, we embarked on a project to create a solution for finding products in supermarkets.
We assembled an interface, although it received little attention at school. Fast forward to a lunch meeting with my eventual co-founder, Franc Borges, where I shared the idea and belief that many people need help finding products in large stores. Franc immediately recognized the value of the concept and enthusiastically agreed to pursue it further.
Despite no first-hand knowledge of the grocery landscape, we saw an opportunity and built a few prototypes with our technical expertise. Along the way, we realized there was untapped potential in the data collected by retailers. While store mapping was intriguing, we saw the need for a platform that could leverage the vast amount of first-party data to help retailers gain insights into shopper behavior. This critical insight pivoted the shape of the organization's foundations today.
Grocery Doppio: Can you explain the architecture of your personalization system and how it scales as the number of customers increases?
Raman: At the heart of our operations is collecting first-party data from retailers. This data encompasses transactional details, pricing information, and customer loyalty data, which we integrate into our system and analyze on a shopper-by-shopper basis. The key outcome is the creation of personalized shopper profiles, wherein we track a wide range of parameters for each individual. To ensure that our profiles remain up-to-date and relevant, we consistently refresh and enhance them with data from retailers, including real-time updates in some cases. By leveraging the power of AI and machine learning, we gain valuable insights into behavioral trends, which enable us to deliver recommendations and a comprehensive host of services to retailers.
Grocery Doppio: What is your predominant market? How do you ensure your products meet the needs of your target market?
Raman: Our primary focus is on the supermarket grocery sector, specifically focusing on regional chains. We seek partnerships with mid to large regional chains with established loyalty programs. To ensure customer privacy, we prioritize using tokenized data and avoid collecting personally identifiable information (PII). By leveraging customer identification, such as loyalty card numbers or unique identifiers, we gather valuable data related to individual shopper purchases. The frequency and patterns of grocery shopping habits offer significant insights into consumer behavior, allowing us to provide our partner retailers with valuable analytics and recommendations.
Grocery Doppio: What unique insights have you learned from analyzing customer behavior over the past decade?
Raman: Customer insights within a grocery store need to be examined from various perspectives depending on the roles within the organization. Marketers, merchandisers, and sales teams each approach consumer insights from their specific standpoint, seeking unique information relevant to their department and store. Marketers may focus on customer acquisition and retention, while merchandisers concentrate on department performance and sales. Sales teams often analyze margins and identify the most profitable customers. Our goal is to provide a comprehensive and bird's eye view of the data, enabling retailers to understand their business holistically. We emphasize the fundamental thesis that stores exist because shoppers want to purchase. Therefore, understanding shopper behavior is vital as it influences decision-making and mitigates risks associated with relying solely on sales figures and product movement. By considering shopper preferences, needs, sentiments, and behavior, retailers can optimize their strategies to enhance sales and overall business success.
Grocery Doppio: How do you balance providing personalized recommendations and maintaining customers' privacy?
Raman: Privacy is a crucial concern, and I understand that mainly because I am a customer. To illustrate the issue of customer privacy, let's draw a parallel with Netflix. When you watch shows on Netflix, your viewing trends behavior creates a profile unique to you, and Netflix collects data on your viewing history, preferences, and the amount of time you spend watching. They utilize this data to enhance their service and improve your viewing experience. Similarly, in retail grocery, personalization aims to understand your purchasing behavior, frequency, and price preferences to deliver a tailored experience that is enjoyable, seamless, and valuable. Two primary objectives are in play: the shopper's goal of obtaining the best value and products and the retailer's goal of increasing sales and attracting the most desirable customers. We strive to strike a balance and provide an effective medium that fulfills both objectives and is the ultimate goal of our personalization efforts.
Grocery Doppio: What is the VISPER personalization tool? How does it help grocers?
Raman: VISPER offers a comprehensive personalization solution suite structured into four levels. These levels cater to consumers' preferences, shopping behaviors, and individual characteristics. The first level, known as Netflix personalization, involves organizing and ranking content based on user behavior and preferences. The system maintains a library of relevant content and surfaces content that aligns with a user's interests. The second level, targeted personalization, focuses on understanding shoppers' demographics, segments, and characteristics to design campaigns targeted to specific segments. The third and fourth levels of personalization involve letting the system design promotions for shoppers individually.
To better understand, imagine knowing a customer’s behavior and figuring out how to drive them back to the store and increase their basket size. These decisions are made on a one-by-one basis, customizing promotions for each shopper, even when dealing with an enormous shopper base. Machine-driven systems play a crucial role in enabling this level of personalization.
Grocery Doppio: Tell us about your individual KIC scores. How does it help a grocery retailer?
Raman: KIC scores serve as the fundamental basis of our personalized solution. By drawing parallels to the FICO scores used by financial institutions, we can understand their significance for shoppers. Similar to how agencies track spending habits and financial transactions to create a composite index for credit decisions, we have applied a similar approach. We analyze a shopper's complete purchase history, breaking it down into factors such as expenditure, spending categories, purchase frequency, and discounts. The information analyzed and compressed serves as a single KIC score, ranging from zero to 1000. A higher score indicates positive attributes, while a lower score suggests room for improvement. Our algorithms are designed to optimize this score, focusing on maximizing marketing effectiveness.
Grocery Doppio: What was one of the most challenging moments you experienced when building Birdzi, and how did you overcome it?
Raman: One advantage of being outside the industry or lacking experience is the freedom of ignorance. It allows for an open-minded approach where anything and everything seems possible because there are no preconceived notions about what can or cannot be done. Drawing from our expertise in big data financial systems, we brought a fresh perspective to problem-solving. However, we encountered challenges along the way.
One major challenge was the need for standards in retailer data. Although there has been improvement with the rise of e-commerce, in-store data still needs to catch up in quality. Another challenge was the numerous integration points within retailers' systems. Many of these systems operated in silos and lacked effective communication, often relying on manual processes like entering data into spreadsheets. It was astounding to see how such inefficiencies persisted in the industry.
Additionally, brick-and-mortar retailers faced a unique challenge in executing technology solutions in-store. While the back-office infrastructure may be impressive, the success of a program ultimately relies on store associates and the overall operational execution. High turnover rates and part-time employment adds complexity to ensuring seamless execution. Despite these challenges, it's essential to acknowledge that shopping is fundamentally a human interaction experience. While e-commerce has its merits, there is still an irreplaceable pleasure in receiving excellent service and interacting with humans when walking into a store.
Grocery Doppio: How does your company measure the success of its personalized recommendations and customer engagement efforts, and what metrics do you use to track that success?
Raman: As a company, we analyze two key factors to determine the success of our efforts. First, we examine the return on investment (ROI) and the incremental revenue generated for the retailer. Second, we evaluate whether our engagement with shoppers increases their average KIC score. A higher KIC score indicates that shoppers either purchase more, visit the store more frequently, or buy from a broader range of categories. By focusing on these metrics, we can ensure that our strategies are profitable and effective in driving customer behavior.
Grocery Doppio: Can you share success stories about grocers who have had an exceptionally positive experience with your personalization system?
Raman: Over the past year, we have witnessed remarkable results, with several retailers implementing our VISPER campaigns. On average, we have achieved a 10x increase in incremental revenue compared to the actual spend on these campaigns, which is truly impressive. Our open and engagement rates have increased, and we can attribute this to shoppers sharing their experiences with other shoppers. As a result, we have seen a slow but steady increase in engagement rates, which is a testament to the effectiveness of our campaigns. To illustrate, we have 100,000 shoppers, and the engagement level begins with 20,000 shoppers initially; as the halo effect takes place, where one shopper talks to another, gets an email, and gets a good deal, the engagement begins to grow to reach 40,000. Now you have shoppers engaging.
Another significant benefit of our campaigns is the automation of marketing functionality for retailers. Previously, it would take three people up to four weeks to run a single campaign. However, with our system, one person can complete the same task in just 20 minutes. This operational efficiency has resulted in significant savings for retailers, allowing them to allocate their time and resources toward other essential duties.
Grocery Doppio: How do you plan to continue innovating and improving your personalization system?
Raman: Throughout its history, the grocery industry has relied on legacy systems, making it ripe for disruption. However, disrupting established norms can be challenging as people tend to resist change due to the discomfort it brings. Once a routine is established, people often forget the underlying reasons behind their actions. This presents an opportunity to disrupt traditional thinking and approach the industry with fresh perspectives. As newcomers to the grocery industry, we recognize the intricacies of effectively stocking products and enticing shoppers to visit our stores. We deeply appreciate the significant effort and coordination necessary to operate a thriving store. However, as individuals who hail from outside the grocery industry, we possess a unique perspective. Our viewpoint is untainted by preconceived notions or legacy thinking, allowing us to approach the industry with fresh eyes and innovative ideas. There are numerous opportunities to enhance shopper engagement, bridge the gap between digital and print mediums, and adapt to the changing landscape where traditional print media is diminishing. Moreover, we see great potential in facilitating stronger interactions between brands and shoppers in collaboration with retailers. Brands often invest significant resources in various advertising methods but may need direct access to customers. Our platform offers the potential for closer cooperation between brands, retailers, and shoppers, creating a more integrated and practical marketing approach.
Grocery Doppio: Can you provide insight into any upcoming products or services your company plans to release?
Raman: Last year, we launched VISPER and have transformed it into a self-service platform enabling retailers to run their campaigns. Additionally, we are currently working on modifying pricing to allow retailers to run 10 monthly campaigns on select audiences. These changes are set to go live this month. As previously discussed, we have several exciting projects in the pipeline that we are eager to share with our clients.
Grocery Doppio: How does your personalization technology differentiate itself from other AI-driven systems in the grocery industry?
Raman: Birdzi’s competitive advantage lies in its exceptional team of dedicated individuals who prioritize customer satisfaction. In today's rapidly evolving technological landscape, it is the people who truly make a company successful. While technology may change, the value of a skilled and committed workforce remains constant. Our team is the key to our continued success and growth.
Grocery Doppio: How do you see the market for AI-driven personalization in the grocery industry in the next 5-10 years, and how does the company's vision fit into this?
Raman: During the pandemic, people cooked at home at a much higher rate. People became more conscious about what they ate and what they cooked, which allowed them to engage in the concept of food as medicine. Grocers are transforming to become the community's health centers, finding opportunities to better serve shoppers by adopting a healthier lifestyle and making those products available. Data processing and driving insights to fine-tune the offerings and individualize these campaigns and provide frictionless actionability for the retailer is the need of the hour. Traditionally, marketers have faced challenges in working with data due to their reliance on internal IT teams for access. However, internal IT teams are often more focused on operational aspects rather than driving innovation in data usage. This is where our role comes in. We serve as a marketing technology solution that empowers marketers to utilize their data and accomplish tasks efficiently and swiftly.
A little about yourself
We have been asking you predominantly questions about your company and would like to learn a little about you. Do you listen to music? We would like you to tell us three songs that helped inspire you during your company's development.
Grocery Doppio: What song did you listen to throughout your journey, from ideating Birdzi with your daughter at the grocery store to today?
Raman: It's "Lucy in the Sky" with Diamonds, by The Beatles, because it's just imaginative. The song has a strong visual component that resonates with me as I am a visual person.
Grocery Doppio: When establishing the company, there must have been many challenging moments. Can you tell us about a song that got you through those moments?
Raman: One of my favorite Kishore Kumar songs is 'Yeh Jeevan Hai".
Grocery Doppio: Can you tell us an impactful piece of advice you followed during the challenging days that helped you continue your journey?
Its a quote by Steve Jobs: "Simple can be hard and complex; you have to work hard to get your thinking clean, to make it simple, but it's worth it in the end because once you get there, you can move mountains."
A Quote for the Entrepreneurs
If you want to start a company, this is an opportune time, If you have ideas; there are more people open to ideas, more capital, and irrespective of what the economy says. That goes in waves and cycles.
The Infinite Game - Simon Sinek.