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Antoine Azar’s Thirdshelf unlocks the power of marketing automation for independent retailers

One of Antoine Azar’s favourite moments comes when he sees the light bulb click on in the head of his customer, usually some time around when the co-founder and chief technology officer of Thirdshelf helps them realize how much more money they’re going to make.

“It’s a huge eye-opener when they see the data they could be having,” he says. “It changes the way they look at their business.”

Started by three co-founders in mid-2015, Thirdshelf is a loyalty marketing solution made for small, independent retailers. Its customer tracking capabilities, paired with artificial intelligence (AI) that automates many aspects of customer relationship building, is the Ingenious Award winner in the SMB mid-market solution category for 2016. Azar, who nominated his own firm, says winning is a huge recognition that reflects his own business mission.

“It’s not technology for the sake of technology, it’s to help retailers,” he says. “We’re extremely passionate about helping people grow their business and be successful.”

Etiket a fan

That’s a sentiment that Simon Tooley, founder and CEO of Etiket – an early customer of ThirdShelf – agrees with. He founded Etiket after years of working at a larger retailer and was looking for an “innovative solution” to replace the analytics, loyalty, and marketing automation he enjoyed there, but for his smaller venture.

“It’s great to see people passionate about what they do being recognized for building innovative solutions,” Tooley says. “Showing the level of care and dedication that they Thirdshelf team has always demonstrated.”

The award from the Information Technology Association of Canada (ITAC) is hardly the only validation that Thirdshelf has received. Earlier in 2016, Azar and his two other co-founders raised an angel funding round of $800,000 to scale their technology and find customers.

New opportunity for smaller retailers born

Azar, a computer engineer by education, first saw the opportunity for serving the independent retail market at a previous business he ran, an agency developing mobile apps. While his agency catered to large customers, conversations he had with smaller retailers revealed there was no good technology to help them develop a loyalty relationship with their customers.

“We figured out the right solutions was an AI engine that could analyze the data and do marketing actions on their behalf,” he says.

Today, Thirdshelf has about 250 retailers using its platform to manage 300,000 customers in loyalty programs and the firm has grown to 15 employees. Given that there are 1 million independent retailers in the North American market, Azar sees room to grow.

Here’s how the software works – Thirdshelf connects with a retailer’s Point of Sales (POS) system such as LightSpeed, Vend, or Springboard. From there, it can analyze the transactions happening and start to identify first-time customers and return customers. Certain retailers have dutifully collected information about their customers already, and that can be input to help build customer profiles.

The trio of Thirdshelf founders.

Making retail customer-centric

If customers of the retailer opt-in to the loyalty program – usually incentivized to do so by a rewards system that would include discounts on future purchases – Thirdshelf can analyze their purchasing patterns and design a personalized promotion for that customer. The software can also attribute actions to transactions, so retailers know if their marketing efforts are working.

“Retail has traditionally been very inventory-centric,” Azar says. “Every retailer should be customer-centric and we’re able to give you exactly that.”

At Etiket, Tooley says Thirdshelf does help shift the focus from inventory to customers. His team measures each action it takes with the solution to learn what works and what doesn’t – and for the most part, it’s working.

“We’ve evaluated that each dollar we invest in the platform has generated $14 in revenue,” he says. “Our customers also love the program, which means they keep coming back to see us.”

While retailers rely on Thirdshelf to run their loyalty programs, its operated as a white label product and invisible to the retail customers. The more data from customers that ThirdShelf can collect, the better it gets at helping out with marketing. That comes thanks to Azar’s machine learning algorithms. He’s been working with PhD holder Laurent Charlin from the University of Toronto on machine learning research, and the research duo have even won a grant from the federal government.

The power of the platform

“It also has vertical specific knowledge, so if you’re opening a bike shop tomorrow, you don’t necessarily have all the business insights about how to run promotions… but our system has that built in,” Azar says.

Thirdshelf’s goals are to collect 75 per cent of a retailer’s customer data and reactivate 10 per cent of dormant customers, as well as increasing second purchases by 25 per cent and increasing overall purchase frequency.

When working with one of his earliest customers, Azar recalls a “moment of truth” for his business. His customer was calling, saying that he felt like he was working with Thirdshelf, but unsure if it was generating more revenue or helping customers. Azar responded by working with him to develop a campaign based on the customer segments identified by the software.

“He generated an incredible amount of money in a couple of days,” Azar says. “He saw the power of the platform.”

In other words, you could see the light bulb clicking on.

ITWC is a media partner with ITAC for the Ingenious Awards.

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