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Prostor Capital invests $2 million in retail marketing solution Smart Checkout

Open Retail, a subsidiary of marketing communications agency Open Group, has raised about $2 million from Prostor Capital to develop Smart Checkout, a hardware and software system that identifies customer preferences during checkout and produces a targeted advertising message via coupon.

The company claims that its technology currently has no direct competitors on the Russian market but admits that it is similar to those developed by US-based Catalina Marketing and India’s Intellex Marketing.

After receiving information about the customer’s current purchase and information from an ID loyalty card, the system analyzes data on which goods are purchased, purchase total, payment type (cash or credit card), gender, age and purchase history. Smart Checkout then determines which deal to offer to each customer, with full-color coupons printed automatically at checkout.

The system allows stores to encourage trial purchases, incentivize repeat purchases and brand loyalty and identify customer preferences. Manufacturers, meanwhile, can announce new products, inform customers about product advantages and obtain information about consumer activity for a specific period or about sales and attendance in outlets.

The system is already in place in 19 “Victoria” supermarkets in Moscow and the Moscow region and 13 “Monetka” stores in the Urals. Further regional development of the project is in the works. Smart Checkout also has existing contracts with brands such as Baltika and CocaCola. By the end of 2017, it plans to sign contracts with a minimum of 120 brands and achieve sales revenues of $100 million.

Prostor Capital’s Managing Director Alexey Solovyev sees in Smart Checkout “a revolutionary advertising market project that radically changes the understanding of advertising and targeting possibilities.”

He added that the company is particularly interested in the technology’s potential uses in online-offline sales, a rising trend in e-commerce as described in EWDN’s 2013 E-Commerce Report.

“The modern consumer is so spoiled with all sorts of options to attract attention and simply does not respond to them. He needs to be constantly surprised and engaged by the brand. It is this problem that our system solves,” according to Open Retail Director Alexander Shurov.

Smart Checkout has already helped Victoria supermarkets to “predict that a particular product that is not yet represented on our shelves will become popular. For our last promotion, Smart Checkout accounted for 17 % of traffic and 31% of coupons have been activated,” said marketing director Irana Katsieva.

Among the other startups of Prostor’s portfolio are medical portal VitaPortal, educational social network Dnevnik.ru, online video service provider Dulton Media and US cloud telephone service provider Infratel. In 2013, the $20 million fund also invested in online ad management startup CPAexchange and narrated slide-show startup Penxy.

Prostor Capital also recently announced plans to create a second, $60 million fund to be launched next year. 

2013-10-23, East-West Digital News, Marie Ashley Kummerlowe.

Keywords: hardware, software, retail sector, Prostor Capital, funding

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