Portland mobile validation company Validated has rolled out in 10 new cities, CEO Tov Arneson announced Wednesday.
The company allows stores to give credits toward transportation options, such as Lyft, ReachNow, BikeTown, Uber and Luxe, if they spend over a certain threshold.
Until now the company, which is based at Jaguar Land Rover's tech incubator, has been operating in Portland at stores such as premium rain jacket company Arc'teryx.
The expansion sees them onboarding many local retailers and expanding nationally if they have a national presence.
For example, leather maker Tanner Goods has joined the Validated system. Tanner will also use Validated at its San Francisco and Los Angeles stores. Outdoor retailer Marine Layer is also joining.
Validated's Tov Arneson, Ian Lyman and Alex Wilhelm appeared on ABC television's business pitching show Shark Tank on Friday, April 14, but the Sharks did not bite. However, the show was taped 10 months ago, before Validated had dropped QR codes for receipt scanning.
"The user will still see the same experience in the store on the app," CEO Arneson told the Business Tribune. "When you reach the required spend it pushes credits at you."
Expanding into other cities might seem like block-by-block struggle, but Wilhelm, the team tecchie, says that a lot of the transportation networks have things in common.
"Some of these bike shares, like Biketown and Citi Bike in New York, are branded differently but the back end is the same. In this case it's operated by Motivate. It would be extremely straightforward to add them in San Francisco."
They are looking at cities with good multi-modal transportation infrastructure – places where a consumer has a wide variety of choices. Trying the reward of choice to retail is key to Validated.
Validated is working on tying in street parking to the system. Americans are very comfortable with parking validation, and currently it's the missing, obvious piece of the Validated experience.
Another improvement in the product is the dashboard. This speeds up the "onboarding" process, as initiating new customers is called.
"With the dashboard, we onboard (the merchant) then let them set up their offers and set their spend thresholds,"
"But for further expansion, we need a more scalable approach, where they can onboard themselves," says Alanna Beckman, Validated's head of partnerships and marketing. "We give them the tools to calculate their best ROI (return on investment)." They have also added live chat for shop owners to get help when setting up the system.
Searching has been a matter of following word of mouth leads and looking at Yelp's top rated upmarket stores.
"We have inbound leads, but we started by looking at the brands that represent what Validated stands for, which is an enhanced customer experience."
They are in "early conversations" with Columbia Sportswear and Nike.
"We're small and scrappy," says Wilhelm. "We work our way up and see if we can get to a decision maker." That route is usually general manager of a store, regional manager and ultimately CMO or chief marketing officer.
With brick and mortar retail losing ground to e-tailers, stores are trying to entice customers. Some are going for discounting, which can be counterproductive. The sort of stores Validated is aiming at are upping the customer service ante. And providing a reward linked to transportation has a multiplier effect, since it's a win for the storeowner, the customer and the environment, in that alternative transportation reduces miles per vehicle.
Recent data – well after the Shark Tank fiasco – has shown the rewards system is working. Arneson says customers are on average spending 58 percent more than the target. For example, in a clothing store where the average purchase is $80, the shopkeeper might say if you spend $100 or more you get a $5 credit towards Lyft or ReachNow. On average people are spending $150 because of that incentive. The cost is 6 percent.
The company consists of six staff and is about to add two more engineers.
The national exposure of Shark Tank has brought in inquiries, according to Arneson. The company is also talking to a local Portland transportation network software company about possibly partnering.
"When I speak to a merchant, I stress it's a social media tool they can use as they like," says Beckman. "It's pay for performance, which minimizes risk, and it enhances the customer experience. We're a rare product that is not punitive to anyone, we benefit everyone. Each part of that multi-sided market is happy to promote us."
Arneson added, "If mobility is the lifeblood of our cities, brick-and-mortar businesses are the backbone; and by connecting them, we make it easier and more affordable for people to explore, and ultimately enable whole cities to thrive in full."
Validated is a free mobile app that lets shops and restaurants pay for your transportation. Parking and transportation providers on the platform include:
Other partners include:
• Fat Head's Brewery
• MadeHere PDX
• River City Bicycles
• Bridge & Burn
• The Athletic Community
• Deadstock Coffee
• Compound Gallery
• EcoVibe Apparel
• Broth Bar
• Samurai Blue Sushi & Saki
• Akasaru Ramen
• Sabina's Style
• Hal Shoes
• Centrl Office