How To Revolutionize Your Visual Merchandising with Simon Molnar

SHOW NOTES

In this episode of the Bringing Business to Retail podcast, I sit down with Simon Molnar, founder of Flagship, the retail tech platform that’s giving bricks-and-mortar stores the kind of data insights we’ve long taken for granted in ecommerce. 

From humble beginnings helping his parents run a jewelry store in Sydney and hustling Pandora charms on eBay at age 15, Simon has gone on to raise millions in funding and build a tool that is fundamentally reshaping how retailers approach the physical store experience. We dive deep into how most retailers today are still relying on PDFs, paper plans, and gut instinct to decide where products go in-store — and how Flagship is digitizing that entire process by turning every floor plan, shelf, window, and mannequin into a measurable, testable, and optimizable asset. 

You’ll hear how Simon’s platform allows retailers to track exactly how much revenue is coming from each part of their store, run A/B tests on product placement (yes — even in-store!), and empower store managers to take ownership like mini-CEOs using real-time sales data and custom KPIs. 

We also talk about the surprising impact of click-and-collect as a trust-building tool, how omnichannel behavior boosts lifetime customer value, and the psychology behind how people shop in different store layouts. 

Whether you’re managing a single store or a global retail network, this episode is packed with gold for anyone who wants to make smarter decisions, improve in-store conversions, and finally bridge the gap between digital insight and physical experience. 

If you’ve ever looked at your store floor and wondered if it could perform better — this episode is the one you’ve been waiting for.

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 In this ever-evolving world, we constantly talk about taking the in-store experience and ways that we can translate that to the online experience. But we very rarely talk about taking the online experience and bringing it back to in-store shopping. And one of the benefits that I know about selling online is just that sheer amount of data that we can collect.

Even with the Apple updates and everything, we can still look at buying behavior. We can look at browsing behavior, abandoned cart. All the information that Google Analytics gives us and that information is used to help us buy better products, create a better customer experience, and essentially just put more money into our pockets.

And up until recently, bricks and mortar store just didn't have access to that same level of data that we get when we sell online. And today, Simon Molnar is on a mission to change that. Welcome to the Bringing Business to Retail podcast, where we talk all about different ways to grow your business and your bank account.

Simon, welcome to the show. Thanks for having me. No problems. I would love to know what conversations around your dinner table were like when you were growing up, because I know in my house it was generally something along the lines of whose turn it was to wash up and who hadn't cleaned their room up that day.

Yeah. I can't remember the exact conversations that we had, but it was always centered around business. It was new opportunities. I think even while we were in high school, I, my brother and I were, were hustling, so it was all around what, what we could do, opportunities. And it was my parents also talking about what they did in the store and I guess it all just kind of rubbed off.

Rubbed off on us. So tell us about that, like how did you end up with these conversations? Your parents were in retail? Yeah, my parents were in retail. They had a jewelry store in, in Sydney, c, b, D for over 30 years. So I was really brought up on, on retail and specifically jewelry and. The, my journey started long before any, anything materialized.

It was really growing up and being privy to, uh, to, to the journey that my parents had and how hard they worked to, to achieve what they did. So I will, I always tell people, if you've listened to the podcast before, I'm gonna tell you this story again. And the story is about how proud, my proud parenting moment when my child, I got a text message from one of the other moms at school.

She was in. I think year five. And I got a text message from one of the moms that says, I don't believe it, but your child understands cost of goods. So they had a school fair and they had to, in groups, they had to buy a prize and then they had to like do something, some kind of um, you know, fair or a raffle or a game for people to win the prize.

And then they were donating that money to charity. And so she had worked out that if they spent anything more than $10 and they were charging a dollar, that they would only need 10 people to have a go and then they would be able to make the most amount of money. So when they went shopping for the prize, she put a $10 limit on it, and then from there they decided they were gonna get a stuffed toy.

She wanted to find the biggest stuffed toy, so she was like going for quantity over quality and apparently she had a whole store, a whole department store looking for this giant llama that was $9 95 and from, they didn't, they could not find it. It was supposedly in stock and I still remember getting a phone call one morning at 6:00 AM from the store manager saying.

We found the llama like, can you come in and get it for your daughter? She was on a mission to do that. So what the conversations that you guys had or what were the conversations that you had even in store that brought you to where, which we're gonna get to in a minute? Which, which, where you are and the way you think today.

Yeah, I would say it all started. When I was working weekends here and there in my parents' store, and I would man the Pandora box selling Pandora charms because I knew that everyone coming in would want them. It was the, the, the hot brand. And, um, it sold itself. And I got really excited that I was, that I was selling.

And I would've been 15, probably 15 or 16, and. It was the kind of early days of, or early-ish days of eBay. And I kind of thought to myself, what if we, what if we sold these Pandora pieces on eBay and just listed them for auction and see what happened? And what we found was that they were consistently selling.

And I think that for me, I'm not, I, I can't speak too much, like more broadly, but for me personally, I would say that was kind of my. My initial kind of foray into everything retail. It was, oh, there's this opportunity, there's this other opportunity. Let's combine them and see what we can do. What year was this?

I need to get my head into e-commerce. eBay. Like when? When are we talking? You said about 15, so you'll have to work backwards from there. Yeah. This would've been, I would say. 2000, end of 2007 into 2008. Ooh, OG Retail Online. That's my happy place. I started my first online business in 2007. Right. And it was interesting because back then eBay sold a lot of secondhand products.

So were you selling like sick. I'm guessing you were getting this, these, this jewelry from your parents' store. Were you buying it from them? Like, let's just, just give us a little bit of information about this. You weren't Yeah. Stealing them. Were you? So essentially what I had was I had my parents stock on consignment.

Um, I had, I can't remember exactly how, how I ran it, but I basically had like a stock report of what they had in stock, what they had available, and I think it was, again, back in, back in 2008, no one was expecting next day delivery. So I had the luxury of being able to sell products that weren't necessarily available in stock today.

And then my parents would go and order the stock after it's sold and then bring it home and we'd package it up and sell it and, and send it off. Nice. Because I was, I was about to ask you, did you ever run into that age old problem that I know I certainly had. When I first started my bricks and mortar store, we ran our website on Aus Commerce.

That's how long ago it was. And then we, like, we didn't have a way of syncing up our point of sale at the time because this was, you know, fledgling retail times. And so the, the sellout, like you would sell something online and I need to discover you'd already sold it on store, but that doesn't sound like it was happening to you because you had this luxury of being able to order it after you sold it.

Yeah. I think that that was definitely a part of it. And it's funny, even kind of thinking, thinking through that. That was the model we ran at ICE for, for years. Um, but I also think I was probably a little bit more controlled, I guess I wasn't looking at building this as necessarily a scalable business.

It was more a little hobby for some, for some pocket change. And so I would probably list like 20 to 30 pieces at a time and have those pieces all aside, just listing one of each. And then once it sold out, then I would go get another one and then relist it. And so it was really about, um, may maybe it tapped into scarcity in consumer psychology.

I wouldn't say I was smart enough back then to think about it, but about that there's only one available. And once it's gone, it's gone. But the great thing about eBay, and I haven't sold on eBay for a very long time, I'm assuming it's still the case, is you could, uh, tap into like Second Chance offers. Oh yes.

So I remember that. And so let's say a charm sold for a retail for $50. I sold it for $45. I would go and find every bid above $35 and accept the offer and sell five or six pieces at a time. Oh, that was smart. Yeah, you're hustling every, everything's about, everything's about the hustle. It's, I remember selling, selling on eBay at back when I first started my first shop, and the only reason I did it be was because back then I feel like it was the only way to shop online that people actually trusted.

So we had an online store, but there was that whole level of, you know. How do I put my credit card online? And it, this sounds so like, guys, remember in 2008 we didn't have data on our phones? Okay. We were like pressing the, you know, the number two button to get c. That's, that's how far away it was in 2008.

And so for me selling it was just natural selling on eBay because that was where the people shopped when they shopped online. So you clearly tapped into that, which means you are also much younger than me because I was selling a little bit older than that when I was selling my stuff on eBay. I, I would say, I would say, um, that trust or, yeah, that, that trust in e-comm.

Really spanned into our early days at ICE, because I remember when we told people that we were selling jewelry online, everyone's response was. How are you going to, how are you gonna get someone to put their card into a website to buy a thousand dollar engagement ring? Oh, see, I was thinking, I was thinking how, like, I literally mouthed the word how, but mine would've been like, how do people know that it's going to look good or, you know, there's no ar put it on my hand and you know, back in the day.

Yeah, it was, it was hard. We had to spend a lot of time building trust in our customer. It was free returns if you're spending over a certain dollar amount because at a certain, at a certain price point, you, you are expecting quality, you're expecting a certain aesthetic, and you are not guaranteed to get it.

Um, so it was really about giving them that flexibility or that that ability to be able to return something if it didn't work for them. We also lent quite heavily into branded product as well. So we had, I would say half our half our assortment was kind of generic white label, white label jewelry that we would source from around the world.

And then the other half was all branded product where the customer knew what they were getting. Like the Pandora charms. Exactly. Um, unfortunately, when we launched ice. We didn't, I can't remember why, but we, we couldn't sell Pandora on through the website. But the brand that we did lean into was Thomas Sabo, which was really strong at the time.

And that was, that was our trust builder. It was someone being able to buy a $50 bracelet with a $35 charm and to. Build that trust that they're actually gonna receive what they're purchasing. And then once they get their foot in the door and they receive the purchase and they know that we're not a scam and that you can actually buy jewelry online, suddenly that would then drive that repeat purchase.

They would keep coming back. What did your parents think? Like they were traditional, what you said, 30 year bricks and mortar, you know, serve the customer. You've got, you know, you've got to, uh, I, I'm pretty sure that all the jewelry people I know are all about customer experience. And back then we didn't have the same levels of customer experience.

So how, I guess first thing I would like to know is what your parents thought. You know, they were probably just shaking their head in the background going, this is not going to work. But then also I would love to know how, like the customer experience, what did you do apart from the free returns? What did you do to make people realize that when they bought something, there was a good chance that they were gonna get what they ordered?

Yeah, it's a really good question. I'm actually gonna start with the customer service piece because it's really, it's a really important one and I think it's missed a lot today. Um, we made it really easy and clear to the customer that they could, that they could call us. We had a big phone number, plus on the website we had chatbots.

We had email addresses anywhere where they needed to. If you didn't have chatbots, you had live chat widgets. 'cause chatbot chat wi didn't exist back then. You're right. Sorry, you. We had live chat widgets. You are correct. And we would encourage them to pick up the phone and speak to us because speaking to someone, hearing us across the phone and being able to kind of build that relationship really helped settle those nerves.

And so it was, for us, it was really around, all around unique selling propositions and the things that are going to give someone the trust that we are legitimate and nothing's gonna build legitimacy more than giving them the ability to speak to a human. And so that was, we, we always really focused on the customer service first.

Even if we, as a take a hit, it was how do we make sure the customer has the best possible experience? And then coming back to my parents, I think dad was, was probably a bit frustrated because he saw us taking, taking sales away from his store. And we would have certain products that we would sell on sell at a discount or something like that.

And he would get really annoyed at the number of times that someone would walk into his store with our website, open at the price and say, can you price match these people? And my tat is just shaking his head saying, you're costing me money here. Mom always saw the opportunity and sure he saw that, that e-comm and, and the internet was the future.

And so she was really, um, really pushing us and eventually one of the other things that built a lot of trust in our customer. Was the ability to offer click and collect. And I feel like we offered click and collect before it became mainstream and we, we did the same thing. Yeah. And my parents' shop was the collection point.

And so even that became a trust builder because they knew, oh, okay, there's a store in the city I can go collect this from. And that actually ended up becoming an upsell opportunity for my parents because. Yes, someone would purchase a watch. This watch could be sitting in the warehouse for a year or two.

They would come, bring it in, and my parents would offer a watch change, a battery change on the spot, and then, uh, be able to, to take a clip that way. So they, they started to see, and it's a, and it's a component that I think is missed heavily in retail today. Is that that click and collect experience is an opportunity to bring someone into your store and drive an added experience.

Is it an upsell? Is it a customer engagement? And my parents really leaned, uh, quite heavily into that. I stumbled onto that same thing by accident that you just said in my stores, and it was honestly for a lot of, we sold baby products and so we would. Get people saying, my baby is asleep in the car, so I can't come in.

I'm on the website. Can you bring me out? You know, this, this, this, this, and this. And so we would ring up the order and then we would just walk out with the fpos machine to their car and hand it over. And it was like, that's amazing. Oh, this is a thing. And I still remember. You know, sometimes you, you feel like you deserve credit for a whole entire movement.

This is one of those moments where I took this information and we offered, we, we teamed up with kids photographer and to do Christmas photos. And I knew that as parents, the worst thing in the world is standing in that line at the mall with 50 other families waiting your turn and the kid starts crying.

And so I just made a booking system and it was like, you know when your kids go to sleep, I don't know when your kids go to sleep, you just book a slot. And honestly that brought so much money in and our, our, the parents were just so thankful that someone had thought about their needs, that we would book out those things.

Like we would have to get other photographers in because we had so many people requesting them. And like you said, that other, the other part of that is while they're standing there waiting, where, whether it's the click and collect or the photography. They generally end up buying something. Exactly.

There's always, there's always an opportunity, and it might not be an immediate upsell, but there's always a future opportunity. Um, one of the data points that we have found consistently across the brands that we work with is the value of an omni-channel customer. So a customer that shops in both online and offline, and if there's any other vertical, each additional channel that, that a customer can purchase just increases the value of that customer.

And the realization was that if you can and continues to be, if you have an online customer and you can bring them into your store and complete a perch, a purchase in store as well, the lifetime value of that customer increases substantially because they no longer see you as a means to an end or to a facilitate a purchase.

They actually see you as a brand and they end up seeing you as a lifestyle and you get that loyalty that they didn't have. It's just like when you meet someone, you know, we always say the deals are done in the after party. And that's because when you have that connection with somebody, it's so much easier to make a decision or to take the next step.

I think you've just built this perfect segue to talk about your product, and you were telling me I didn't know about your product and congratulations on your latest capital raise. I literally had no words, guys. When Simon told me what this product does, I was just like. Why didn't this exist when I had my store?

And so I'm gonna get you to tell us about it, but I want to just seed this conversation with, here's what I used to do. I had no retail experience. When I opened my store. I had a business degree, which taught me nothing about running a business. And so I would, I would, you know, I'd have window, a window display, and then at the end of the month, or whenever we changed them out, I would go and look at.

Oh, how many of those things did we sell? And we used to call it money mapping. It was like, oh, so we had that thing in the window and we sold this many units, so you know, that's either good or that's bad. We should put that thing in the window. Similarly, we had different areas of the store that I would look at and go, oh, you know, point of sale upsell, like counter upsell, great.

But we knew that it had to be less than $15 and I could see we had a very funny shape store and I could see in the one, the first store we opened. It was kind of like a U shape, whereas the next door we opened was just a straight run. And it was interesting to see when people came into the first door where they would walk to, but when they came into the rectangular store, they would go in like a clockwise direction because we had a table down the middle.

And so we started to realize I had an excellent team member who could visual merchandise the most beautiful things in the world. And so she would sit down and she would go, okay. Back in the day, I didn't, I didn't know this was not a thing, but I used to charge brands if they wanted to be in my window.

So they had to pay me $500, like in cash or in stock. And they always pick stock, which was exactly what I wanted. 'cause then that's like a thousand dollars to me. But I used to charge them to be in the windows and then I would report back and I would say, you know, being in the window, you sold this many units.

And it was interesting because when no used to sit down and do the visual merchandising. She also, she wasn't experienced, but she also knew instinctively that the demographic in one store was very different to the demographic in the other store. And she would adapt the windows to cater for those different markets.

And like, I think this was just a very good skill that she had. But what you have just introduced takes my whole conversation and fixes it with the click of a button pretty much. Absolutely. It's funny everything that you've said, I'll speak to speaking of retailers all around the world over the last couple of years, and the thing that constantly comes up is that the best retailers in the world are money mapping.

But the irony is that the vast majority of retailers are money mapping with pen and paper or just going back to an Excel document. Yeah. And what we are looking to do, to your point, is be able to do that at a click of a button and when you. When you were looking at your window and taking that back and working out the performance, you were looking at it potentially a week, and then you couldn't go and look at a single day, or you couldn't go and take that over two weeks, or you couldn't it, it's not, it's today, it's not really easy or possible to slice and dice that data or pick a different date range or look at that just for a specific product that's in the window and it's being able to.

Take that the, the way that a lot of people just look at e-com naturally and apply that to a physical space. Yeah. Well, on a, on a website we can put heat mapping software on so we can see where people are looking and clicking and browsing. But it's very difficult to do that in a store, especially if you have a higher traffic store or a larger store.

And I think it's very, um. Like there's bias based on the person who is taking that data because it's, some people might think, oh, that's a lot, and some people might not think that's a lot because we, we have our individual, you know, ways of interpreting data. So explain exactly what it is your software does and I am probably gonna sit here with my, like jaw dropped again.

Because what I will say before Simon tells you is I love your. I think the initiative that you said is you wanna be the Canva, like the, you know, the, the, the thing for the people, the Canva of the visual merchandising world, and this is not just about visual merchandising guys, but I love that because being able to give the.

Even the more, you know, the more independent or the smaller retailers, the ability to have access to that same kind of technology, like it makes my heart sing and I love you for all the world for it. So tell us about what your software does and I will just sit here and smile I app. I really appreciate all, all the kind words.

Just to kind of give a bit of background. So through speaking to retailers over the last little while, the realization. Is that the way that most retailers are doing this visual merchandising? So what you've kind of said around deciding where to place products and what should go on the window and the counter, the vast, vast majority of retailers are doing that with a PDF document.

And so what we have realized is that that process is the process that if done differently, can tell us where products are placed in a store. And if we know where products are placed in a store, a whole new world of opportunity and possibilities opens up. And so what we do is every store gets loaded in every store's floor plan gets loaded in and their floor plan is overlaid with their store's fixture set.

So instead of it being this one generic guide that's being sent out to all stores, every store actually receives their own individual tailored directive. And then what we have the ability to do is bring in a product feed and merchandising a fixture or a table or a wall or a window becomes as simple as dragging and dropping products onto that fixture.

And then with a few clicks of a button, you can then sync that out to all the stores. So we know that the layout of all stores are different. We also know that the stores, a lot of stores will have a front table, and so you can merchandise that front table and sync that out to all stores that share the same front table.

And you can sync it out to all grade A stores or all grade B stores or your hot doors, your cold doors. And so what you're able to do in a really seamless and scalable way, you can start to build a tailored directive to each store based on its floor plan and its fixture set and its assortment, which is really great.

That's really exciting and I love doing that. But what is really exciting for me on the back of that is that we now know across the entire store network, where every single product is placed, and we can then feed in sales data to then say how much revenue is coming through each part of the store. We can tell retailers in, in the click of a button how much revenue is coming through.

Not only one store's front window, but every store's front window. How much revenue's coming through? Every store's mannequin, every table, every shelf. With the ability to compare the performance across stores, so being able to see which stores we getting the most dollars through our windows, which stores we getting the least dollars through our windows, which store windows are improving or declining, to know that we need to make improvements or changes to those parts of the stores.

And so it's really looking at brick and mortar through an e-com lens. And to your point, we've got the heat map and we've got the tool. We've got all these data points at our fingertips. And giving retailers the ability to do that exact same thing from a brick and mortar perspective so that you're not relying on someone in store shouting really loud about something that they heard from the one customer who was really challenging.

They're actually using it based. They're actually making decisions based on data to the point where. We now hear stories about store managers that are jumping into their money map every single day, looking at what worked yesterday and didn't work, and making improvements based on, based on the insights that they're finding and basing on the stock that they have available and triggering conversations to speak to their regional managers.

Say, Hey, this pair of leggings is performing really well on my front table and I don't wanna pull it off, but I'm about to break my size curve. Can you, can we get more stock? And so it's starting to turn store managers into little business owners that know how their store's performing, know what's working, know what's not working to create and trigger those conversations to drive improvement.

I have so many questions. My first question is, not everybody out here who's listening is gonna be having a chain of stores. There will be people who do, but I wanna bring this down to something that is pretty universal. How am I getting my floor plan into the software? Yeah, so the fortunate thing for us is just about every retailer, large or small, will have a floor plan of the store.

Um, I mean, we even just took out a new office space and we could get a floor plan of the office space. So the floor plan exists that then gets sent through to us, and we just have a team of people who are tracing it up and loading it into the platform. So. Coming back to the customer service that we had at ICE and the customer service my parents offered in their store.

Um, it's about making it as much of a no-brainer as possible for the, for the customer and try to take as much of that lift as possible off their plate. So we do the tracing, we do the training, we do the onboarding. Um, it's about making it as seamless as possible for them to, to get uploaded. Okay, so then I connect my product catalog.

Is that how it goes? And then I just, I literally just start dragging and dropping stuff that is literally as simple as that. Okay. I love that. Okay. And now once we start selling, it's going to know what we sold based on where we dropped it in the picture. Exactly within the platform, there is also compliance and communication, so the stores can attach photos back to the platform.

So if you do have a widespread network of stores that are scattered across the country or the world, you can see how every store looks. And the really great thing and exciting thing is that. If every single one of these directives is live, it's not. It's not a fixed moment in time with a PDF document, like an e-comm site, we can go and make a change whenever you want.

You can go into a store and make a change whenever you want. The only difference is that you need a person physically to go and action that change. But from the perspective of head office, you're treating your store in the exact same way that you were treating the eCom site. We jump into a part of a store, you make a change, and then you, and through our compliance, you'll then validate that that change was made.

And then once the change is made, we can then track the, the change of performance or the, or the absolute performance on the back of that. Okay, so. I just wanna make sure I've got this correct because I already, you, you can tell, I, I love this in so many ways. I love this, that you are enabling store managers to, like you said, take ownership.

Take responsibility. Those KPIs that you set for them, you can now, they now have the ability to be able to help. Help themselves achieve those KPIs because they have the data that they can use to say, well, we changed the store around, but actually this, the product that we stuck on, what we thought was a really hot shelf is not moving at a level.

Is that something you can set inside of the software like a KPI of what that shelf or that positioning should be doing? Absolutely. We've got retailers that will set a target for a spur and fixture. It could be a dollar amount, but it could also be a percentage of store revenue. So we'll have retailers that know that a specific fixture should be driving X percent of revenue, and the store managers know to keep jumping in to see how that fixture is performing because they know that that is the focal point of their store.

I love that. So we teach everybody that, whether it is a warehouse or it is a stockroom, or it's a bricks and mortar store, every square foot. Is real estate and it has to pay you back. And so I, what I love is all of this stuff I've been saying for so long is now. In the, you know, people are able to get their hands on something that will help them translate that data in real time at a cost of what is probably a couple of sales a month to be able to afford this.

And then they have this ability to go, but that's not moving. That's not moving. Oh. But when we had that type of product over there. It sold so much better. And just bringing it back to what I said before, I found that in different stores there were different hotspots. And so having that concept of, oh, we're going to stick this product on the first rack on the right when it comes in because we want to sell more of, it doesn't translate necessarily to another shop with a different footprint.

And so being able to go, well, what we want is, can you grade each area like. Absolutely. See, I didn't even know and he is already built the things I want it to be able to do. The, the really cool thing is being able to understand at an individual store level what the, where are the hotspots, because to your point, the front rack on the right might not be the hotspot across every store.

We've got re we have, we'll have stores in, in some of, some of our customers where the top fixture is the one deepest in the store. The realization in this process, and you kind of touched on it before that every part of the store is real estate, and the realization is that not all real estate shares the same value parts.

Some parts of the store are more valuable, some parts of the store are less valuable. You wanna make sure that every part of your store is performing relative to the value that it should be Driving a window is more valuable than a low performing rack. A mannequin is more, is more valuable than a signed hard t-shirt, and being able to understand where the value is coming from to make sure a, maximizing the performance of the high value areas.

So does your software, I dunno the answer to this, but it's a question I would ask, so I'm asking it. So does your software have the ability to look at profit margin of the product and say, you know, this is a high volume, high margin product, and can it suggest where it might think that it should go? It's a really great question and something that we are working towards.

The realization for us has been that no retailer anywhere in the world has ever used software like this before. Well 'cause it didn't exist. And so we've had to walk before we run. Um, the, the long-term view for me, so I come from a pretty heavy digital marketing background, and when you're building a digital campaign, you're setting the goal that you're trying to achieve for that campaign.

You say, I wanna optimize for a row hour or rate your cost per click. And you're setting that goal and that ad is constantly being up, being. Being improved and optimized for what you're targeting, and I will, my long-term goal is to be able to set a goal for a store. If we're going into peak trade, we can optimize for margin.

We're going to sale, we're optimizing for, for stock depth. We're going into new collection. We're trying to clear all, we're trying to clear the most recent collection. And so whatever the, the objective is that the store is trying to achieve, being able to provide the recommendations in almost auto make.

Suggestions and improvements to the store based on what we're trying to achieve. Because if we're going into peak trade and people are going to be shopping anyway, we don't want to be necessarily moving our low margin product because we are just taking a hit on profit. Do you know what you'll finally be able to do?

Oh, you probably can do it now, is you will be able to answer the age old question of where should we put the sale rack? Absolutely. Should it go out the front or should we stick it down the back? The, the exciting thing is that we can, we have the ability to run ab tests or control tests and in some stores we can put the So rack out the front.

In some stores we can put the so rack out the back for some, uh, retailers, they'll treat their core product like the milk in the supermarket where they'll put it in the back of the, the back of the store because they know their customers are going to go there. And the question is, is that fundamentally true?

Because. A customer who knows the brand, sure they know what they're looking for and they're gonna venture there. But are you missing out on opportunity by not showing your best product to new customers and these, and being able to understand, and we, retailers are getting better with capturing customer data on purchase in store and being able to understand are there certain stores which, which skew more towards new customer acquisition versus existing customers.

Being able to tailor even the store that level of granularity, because if I'm tailoring towards existing customers, then I can keep my new product at the front and my evergreen and core product at the back knowing that my customers are gonna come in and shop and look for the, and find their way to the core product.

Versus maybe I've got a store in a, in a tourist destination or a holiday destination, and I'm more likely to get new customers and therefore I wanna put my best product forward where that I know is going to sell. And also the, the same you were talking about before about where you may have a store in maybe a lower socioeconomical area or like a tourist area where people on holiday and they just want something cheap to get them by, they're not gonna take it home.

Or if you're in a lower socioeconomic area or not an area where people, like you said, are looking for new customers, then you adjust your store because what is important to those customers and what drives the most sell through could be very different to the same store in another area. Absolutely. Even, even as, as simple as climate in Australia, you could have, you could be the middle of winter and Melbourne is freezing cold and far north.

Queensland is still nice and sunny, and you'll put all your winter coats and, and Uggs and everything like that in your, in your hot stores, even though that customer isn't gonna buy it because it's not relevant to them. Yeah, I do. I remember so many times sticking kids' raincoats on the racket, take, bringing the sale rack in and putting kids' raincoats out the front when it was raining.

The, these are all things that, again, there's, there's a certain level of intuition. I'll speak to some of the largest retailers in the world, and when I was speaking to the founders of these retailers. They'll turn around to me and they'll say, this is everything that I know to do. I'll walk into the store and I know where products should be placed, and I know the flow of the store, and I know that this is what should be here and that should be there.

And I say, great, you can do that for the stores that you can physically walk into. How do we take your mindset and scale that to every single store across the world? And that's what we are looking to, to enable. It's you've, there are incredible retailers in the industry, people that are seasoned that know what to do, that will put the raincoats out front when it's raining.

But when you've got an 18-year-old straight out of school that's working a casual job, they don't have that same level of experience or knowledge. And we want to give them the resourcing to be able to make those exact same decisions. And I think what you were just saying there about, you know, there are seasoned people who, I'm the same.

I walked into, I was in a, doing some consulting at a store the other day and they had the baskets. It was, it was just kinda like a mini tiny Ikea where you had to walk all around the countryside and they had the baskets. In a really weird position that you would never even notice at the beginning, but it was a gifty type store, so you didn't even know if you were gonna buy anything and there were no more baskets anywhere else.

And I just like picked up the baskets and moved them to the middle, and within 30 seconds someone picked up a basket and it's, and that's just it. We can see it, but it's taking that information out of our brain and being able to democratize that in a way that anybody can use with a little bit of training.

Absolutely. Yeah. The, the data points that we're able to find are really incredibly unique. I mean, there, there was a customer of ours and what they found was that folded product above Eyeline doesn't sell. That makes sense to me. Like I, that, that's, to me, that's a no-brainer of having had a retail store.

Exactly. And it, and it makes sense when you think about the customer walking in that they don't want to have to find a size in a folded, in a pile of clothing and, but without the data point, they didn't know. Being able to even, even being able to know to the products at the end of the rack or a product in the middle of the rack sell better, and being able to understand if we are trying to clear product.

If we've got product that we are low on stock of that we don't wanna move as fast, we move it to the areas that aren't as fast moving. And if we have product that we need to move because we've bought depth in and we're about to go into sale, and if we don't clear it, we're going to go onto sale and the impact margin, then we wanna put into parts of the store that are going to inflate sales for that product.

It's really as simple as that. I know and it's, it sounds as simple. In my head. All of those things make sense. But like you said, we all have different skillsets and when you, when you take that information and you need to put it across multiple stores, across multiple different ways that people learn, the ways that people think you, at the end of the day, you, we are here to make money and you need to be able to make money from all of your stores.

Can you tell me, I, I dunno if you, can you tell me what kind of uplift do stores see when they implement your software? Yeah, we've seen a lot of really interesting, interesting use cases. So we've had, we had one retailer that sent a flip to a store, new collection, and within a, within a couple of days, they realized that their windows were underperforming and they went and made wholesale changes, not to every store, because some stores were performing well, but to the stores where the windows were performing, and they made changes.

On average across those stores, they saw 170% uplift across their windows. Yet we've seen ex, I mean, we've seen significant examples where a retailer had a mannequin and week on week that mannequin had dropped by 85% week on week in revenue. And when we looked at the mannequin, we saw that what was on the mannequin was the last of each style on the mannequin.

And think about how often that happens when you walk into a store. You see a jumper on a mannequin, you like it. You ask them where it is, and they say that that is the last one in the store where a mannequin is your avenue to drive additional sales, and you're not giving 'em that mechanism. And so this retailer was like, okay, we've dropped 85%.

We don't have the stock. Let's change it out to clear more stock. And here's the thing. Right. I can understand as you were saying that you actually went on a different tangent to what I was thinking. I was thinking the person in the store is thinking, I don't want to. Get something grubby or use some of our good stuff on the window, so on the mannequin.

So I'm just gonna take the thing that no one was really gonna buy anyway, because they're not thinking about it as this is a display point, this is an ad, this is a marketing point. They're just thinking, well, I'm trying to do the right thing by sticking something that if you. If it got damaged or whatever, nobody's gonna care.

And so, yeah, it, you took a completely different tangent, but they're both right and that is the benefit of what it is. I'm just clearly very excited about your software. I'm not an investor. I wish I was, but I'm clearly, clearly very excited about this for the industry and for bricks and mortar retailers.

Yeah, I, there was something that you just touched on there around that mannequin being ad space and the, the realization has been, I'm, so I'm living in, I'm living in Los Angeles now and at Westfield Century City there is this massive billboard, um, in the lead up to it and like. A brand has probably spent $15,000 US on that billboard, and there is zero attribution to that billboard.

There's probably very little tracking. They just think it looks nice. It's in the good spot, we're going to do it. And we have some marketing budget and West Phil, were really nice to us. So we, we said we'd spend some money. What? What they don't realize is that every part of their physical store is also an ad unit.

Their window is an ad unit. Their mannequin is an ad unit. Their fitting room mirror is an ad unit. The point of sale is an ad unit, and what these retailers are missing coming with me, coming from this like kind of marketing background is they're missing this opportunity to. To look at a store as if their parts of the store are revenue drivers, because that is fundamentally what they are.

And being on being able to understand what, what return on investment. If they were spending, if a retailer was spending a hundred thousand dollars on a wall and it was driving $50,000 in return, I guarantee you they would throw that wall in the bin. And rent of, of a store is expensive. That wall is expensive, yet they're not looking at the return on investment on that wall, which to me is just, it's such a missed opportunity, which is, you know, the complete opposite if we go back to online, which is if you have your stuff sitting in a warehouse or three pl, you're getting charged by how much space you're taking up.

And so, you know, I mean, not necessarily where it's placed, but how much space it's taking up. And that's where this concept to me of real estate is. If I put it in a warehouse, if I put it in. If I put it in three pl, I get charged for that space. And we have to take that same mindset, whether it is in your garage or whether it is in a stock room or in, like, I was just thinking, I went to Westfield the other day for a skirt and they had to go off site to get it.

And I was, I didn't even know that was a thing. And she came back and she said, oh, sorry, our store room is just a cupboard. And I just, it was the last one and I just had to look, you know, I had to throw everything around looking for it. And, uh, uh, that to me was like, what a waste of time. Like that they don't even know where their stock is, let alone, you know, what, where it should be or what it should be selling.

Absolutely. And being able to know what is the likelihood that someone's gonna come in looking for this product, and do we actually have it available and should this be out on display or should it not be out on display? There's so many different, um, so many different kind of opportunities that, that are just completely being missed at the moment.

Alright, I have to ask you, we've been talking for ages and I could probably talk to you for so much longer, but I have to ask why the move from Australia to la. So around 12 months ago today, um, we were, we got an indication that we were about to sign, um, America's fastest growing athleisure brand in a company called vui.

They had just raised $815 million led by SoftBank, and they were gonna be our launch partner into the us. And so I realized that there was, that the, the problem that we were so solving for in Australia didn't discriminate geographies and it was also present in the us. And so I decided to pick up my young family, move us halfway across the world to try and take on the biggest market in the world, and it's clearly working.

Yeah, we, it's since then, um, we've signed some really amazing brands. We've, and the great, the really exciting thing for me is we're not, we've got a, some retailers with hundreds of stores. We've got a retailer with two stores. We've got a retailer selling jewelry. We've got a retailer selling footwear or apparel, and we are finding that this problem doesn't discriminate.

It's every single retailer. Um, has a need for this. I'm literally gonna be your biggest advocate from now on. Like, honestly, there are a few things in this world I get super, super excited about, and this is one of them. You know, the, you know, the funny thing is, is even on this conversation, it's when, when I start to speak to people about what we are doing.

Everyone's eyes light up and they'll say, oh, you can now do this, and you can now do that. And we've got some retailers that now want to use our, our platform to understand their capacity and tailor their buy to floor space availability. We've got retailers that want visual merchandising and planning teams to collaborate in our platform to make decisions and buying teams to use the data to influence the next collection.

And there's, there's so many different opportunities that have been created out of this. And what's really exciting for me is that there is so much that we can do. We've got some retailers now that we're speaking to that want to integrate RFID to be able to know this is what's meant to be on display.

Is it on display? We've got retailers that want to integrate foot traffic counters to know this is what was in our window, did a pull some into the store. Because if you think of a window, it's an ad unit and your someone walking to your store is your click through rate. And so there's all of these different opportunities.

It's kind of like the moment. We digitized a store, the world became our oyster. And what's really exciting for me is just working with great retailers, working with great tech providers as well, because there are really good tech providers out there that are looking to solve also for, for retail. And we're starting to find that there's so many great people and brands that we're able to work with.

I think that's the perfect place to finish up. You and I will definitely be chatting some more. Simon, thank I appreciate, thank you so much. For people who are listening and they want to look at this software, honestly guys, they have done such a good job of even izing, what's the word I'm looking for? Um, visualize visualizing, thank you.

Visualizing exactly what the software does on the homepage of their website. Like you don't even have to know before you go, huh, I think I might need that. So where can they find it? Websites, flagship.ai. Really simple. Awesome. Simon, thank you so much. Thanks, Selena. Great to chat. So that's a wrap. I'd love to hear what insight you've gotten from this episode and how you're going to put it into action.

If you're a social kind of person, follow me at the Selena Knight and make sure to leave a comment and let me know. And if this episode made you think a little bit differently. Or gave you some inspiration or perhaps gave you the kick that you needed to take action, then please take a couple of minutes to leave me a review on your platform of choice.

Because the more reviews the show gets, the more independent retail and e-commerce stores just like yours, that we can help to scale. And when that happens, it's a win for you, a win for your community, and a win for your customers. I'll see you on the next episode.



Simon is the founder of Flagship, a brick-and-mortar targeted suite of technical solutions to bring new efficiencies and insights to the offline world. Prior to starting Flagship, Simon was the CEO of Ice Jewellery and involved in both the data and marketing teams at Afterpay.

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