Johannesburg - South African technology entrepreneurs are introducing the world to smarter ways of monetising an untapped up-selling medium for businesses — receipts.
Instead of landing up in the bin, being lost in a wallet or stored away in a filing system, receipts could provide a rich form of data that helps businesses find out more about customers and their buying patterns.
And two separate local entrepreneurs are tackling monetising receipts from different angles.
Cape Town based Adii Pienaar, who founded successful global website theming business WooThemes, has turned his attention to starting an email receipt and customer invoice venture dubbed Receiptful, which targets e-commerce websites on popular systems such as Shopify and Magento.
Receiptful helps e-commerce businesses send better-looking and more engaging e-mail receipts that include 'up-sells' and marketing messages. Pienaar says Receiptful is approaching sending out 300 000 receipts since launch while the startup has already raised $500 000 in funding from top names in the tech industry such as WordPress founder Matt Mullenweg and South African technology businessman Vinny Lingham.
Meanwhile, Durban-based Justin Raleigh is the founder and managing director at TillSlip — a startup that has developed an agnostic hardware device that acts as a layer between any point of sale (POS) system and printer to provide retailers and brands with a better system to communicate with customers, while also monitoring their spending habits.
Both of these businessmen are tackling a renewed awareness of receipts and their potential to boost sales, as recently highlighted by Jack Dorsey, the co-founder of social media giant Twitter.
“What if we see the receipt more as a publishing medium — a product unto itself that people actually want to take home, that they want to engage with, be fully interactive with?”
Tapping email receipts
Adii Pienaar sold his first WooThemes website theme in 2007 while he was still a student in university.
Almost six years later, in May 2013, he would step down as chief executive officer of WooThemes after leading the business into becoming a global force that powers the look and feel of many WordPress websites today.
"By the time I left, WooThemes had annual revenue of more than $10m,” Pienaar told Fin24.
"I learnt a lot in terms of being official CEO of the company, putting a management team together.
"Initially that was stimulating and a challenge,” he said.
But Pienaar wanted his next challenge, and he found it in an unlikely place after reading an article about the missed marketing opportunity of email receipts.
So, he sold all his shares in WooThemes and started Receiptful. Pienaar is still based in Cape Town but his co-workers are spread across the globe in places such as the UK - where Receiptful is a registered company - and South America.
Pienaar's new venture focuses on aspects such as helping e-commerce businesses to better incentivise customers to make a future purchase by, for example, offering them a discount coupon in an email receipt or customer invoice.
“Our data suggests that a recipient of an email receipt spends at least 15 seconds reading or interacting with the email receipts. So, what we do with that kind of captive audience or attention is we include dynamic and personalised marketing messages or up-sells we like to call them that is essentially designed at getting that recipient, that customer to take another action where they would then essentially spend more money with merchants,” Pienaar told Fin24.
Receiptful, to date, has notched up 5 000 users mainly in the US and UK, had email receipt open rates of about 70% and engagement levels of around 10%, according to Pienaar.
He told Fin24 that depending upon what data is used as a benchmark, Receiptful is producing about three to four times the engagement rate of current general e-commerce email marketing services.
He also claims that every Receiptful receipt generates about half a US dollar in additional revenue - a figure that is calculated by the total amount of revenue generated and divided by the total number of receipts the business is sending out.
Listen to Fin24 interview with Adii Pienaar below:
Pienaar is also careful to associate his business with that of email marketers as he is pinning his offering more on gathering information from online customers’ interactions with the businesses that they buy from.
"We're not a receipts company; we're essentially a data company," said Pienaar.
"In terms of any one or single interaction that a customer can have with an e-commerce store, the most data rich of those interactions is the receipt.
"Just the amount of kind of metadata we capture around that is incredible,” he added.
Like many startups today in places such as Silicon Valley in the US, Receiptful has not started earning money yet, despite having raised funding.
Pienaar said he is keeping Receiptful free for users of the service as he only plans to charge users for extra value added offerings, such as big data analytics tools, which will be rolled out in a beta phase in the upcoming weeks.
"We're keeping receipts 100% for free going forward and what we're doing instead though is we are basically building complementary products around it, so basically looking at other interaction points across the general e-commerce customer’s journey," he told Fin24.
Unlocking physical receipts
Over 1 000km from Cape Town, Justin Raleigh in Durban is working on his startup TillSlip which has developed a universal plug and play device that sits in between any POS machine and printer to create more marketing opportunities on receipts.
In countries such as the US, companies such as CVS Pharmacy have notoriously focused on bolting on marketing messages to receipts that result in long pieces of paper being given to customers.
Big retailers in South Africa are also already marketing on till slips, but those systems are often tied to the retailing brand, leaving little room for other brands or data analysis, Raleigh told Fin24.
TillSlip then is an agnostic receipt marketing system for all retailers that also captures data about customers’ buying habits.
As a result, Raleigh aims to help small and big retailers and all brands better understand their customers’ buying patterns.
TillSlip is also planning to launch an app that helps customers track their spending patterns. The app is also planned to provide customers with an option to receive digital receipts every time they shop instead of physical receipts.
"We see it almost as an untapped medium where receipts change hands in the millions daily and there could be calls to action on any front to almost engage with the consumer with that.
"We are able to intercept that com and dynamically put any form of communication back onto their receipts based on what's been purchased at that time.
Listen to Fin24's interview with Justin Raleigh:
Raleigh told Fin24 that this communication on receipts can range from anything such as discounted barcodes, competition entries and web addresses.
The likes of liquor franchise Spar Tops has already piloted the system, resulting in what Raleigh says has been a 24% boost in sales and 84% customer engagement thanks to the receipts system.
"If you look at a receipt today when you go shopping, we're able to look at all of that data, so from a store level, through to a time and day of the week, all the way down to what's actually purchased at that time," Raleigh said.
Raleigh told Fin24 that plans are in place to officially launch TillSlip in September this year.
Retail growth prospects
Raleigh and Pienaar's ideas on using technology to boost sales for businesses both in the online and physical world have interestingly been born in a South African market that is not known for translating well into the e-commerce world.
Last week, the managing director of World Wide Worx, Arthur Goldstuck, told attendees at an event in Johannesburg that while the country's e-commerce market has been growing, it is still fledgling.
Only 1% of South Africa's R867bn retail market in 2016 will be e-commerce transactions, said Goldstuck. This means South Africa lags behind other countries such as the UK where over 10% of overall retail sales happen online, according to Statista.com.
Goldstuck further said that online retail in SA is expected to grow 26% year-on-year in 2015 to reach a market size of R7.5bn.
"For now things look great from a point of view of growth rate, but at the same time in terms of what it represents of the overall retail space, you have to understand that online retail is still in baby’s shoes," Goldstuck told the audience.