Q&A: Tapani Talvitie, CEO, Noccela
Noccela is a Finnish startup specialising in indoor positioning tech that recently announced a collaboration with Nordic sports giant XXL. Humanity, not technology, still drives retail, CEO Tapani Talvitie tells RTIH
RTIH: What were the main reasons behind founding Noccela and how did you get things off the ground?
TT: There was a clear problem in the market that needed to be solved. We had a few customers before the company was actually founded and who we worked in close cooperation with to create our product installations for them. We had an idea, but they made it better and told us that no major innovations in product security had arisen for the past 40 years, so if we could make it work, it would be a game changer. And we did.
We do all of our R&D in-house, and product development is ongoing all the time. We’re constantly working on different ideas from retailers. At the beginning, we started with just two co-founders, but now we have almost 20 technical employees, and about half of those are engineers with a Nokia background.
RTIH: Do you think that brick and mortar stores are reluctant to take on new technology?
TT: Absolutely not. We see retailers as forerunners and they are seeking new possibilities with innovative solutions all the time. It’s not only about security and product protection technology. It’s about using technology to sell more and seeing in real-time what’s happening in their stores. Customer experience is still key. Even though shopping online has its advantages, we’re still human and we like to have a conversation with people.
The salesperson should bring added value every time they come face-to-face with the customer, but they need an appropriate tool to get that information, and preferably as close to in real-time as possible. We’ve also seen a rise in the use of VR in stores. For example, customers can use VR to mix and match products and decide what looks the best in a certain setting.
RTIH: What’s the biggest challenge for brick and mortar stores right now and in the future?
TT: Quantity over quality. We’ve heard of the recent closures of stores and chains, and online shopping is often blamed for this trend. Yet physical stores still drive the majority of sales with around 80% of purchases still made in-store. Humanity, not technology, still drives retail.
Online players like Amazon are now opening grocery stores, and existing chains are choosing to downsize and become more efficient with fewer stores. Now the fight has been taken to the brick and mortar retailers to adopt new technology, tools and services to find some unique ways to compete on their own turf.
RTIH: Can you comment on the size of the retail market and how you expect it to change in the next few years?
TT: Real-time indoor positioning technology brings a lot of added value to stores, and the market is growing hugely. If you don’t only consider its use in retail, the whole indoor positioning market is estimated to be $5 billion and is estimated to grow to $23 billion within the next four years.
Retailers will make investments in the future as well. The trend is heading towards more and more buying a service instead of just investing in hardware. When retailers look at the bigger picture, they will see product protection solutions providing other services like improved customer service and store analytics. Older technology such as magnetic tags and CCTV still have their place in retail but are being supplemented or supplanted with more advanced solutions, and we expect to see more multi-functioning devices in the future.
RTIH: Will new technology change the way store personnel do their jobs?
TT: It’s not the technology; it’s what it enables. Everyone is OK with using mobile applications nowadays. But they usually can’t see in real-time if the customer needs assistance or if they attempt to steal the product. For example, our technology detects when a customer moves a product to a fitting room. This then provides a real-time notification to a member of staff to go and provide assistance to the customer. The shop personnel can concentrate more on sales and worry less about shoplifting. We hope to see tech driving more human interaction, not replacing it.
Also, new technology for providing analysis about how a store is performing overall is being utilised to a greater degree. This means that stores can pinpoint how to be more efficient and how to make the process more comfortable for the customer.
RTIH: With GDPR coming into effect this month and personal data being closely regulated, what do you think the consequences for brick and mortar stores will be?
TT: Well, we follow the products, not the customer. The data our service provides only relates to that specific product. For example, how the product moved around the store, how long it spent in different locations, and were there attempts to tamper with it?
RTIH: What is Noccela aiming to achieve in the next few years?
TT: We are currently in a strong growth phase. If you look at the next three years, we will be present in all major markets and hold significant market share in Europe and the US.
We are also disrupting the existing product protection markets. Noccela is not only being seen as a solution for loss prevention, but also a perfect tool for personal security, analytics, increased sales, and improving the consumer shopping experience. Its strategic strengths are a service-based business model, knowing our customers, and providing them with the best possible service.