Case Study: Local Bakery Chain Scales With Hyperlocal Tools
Merchant: Cako
Location: Bay Area, California
Size: 7 Locations
Platforms: Revel and Index
Bottom Line: Hyperlocal tools can be useful to businesses that are trying to scale.
Growing up is hard, especially for locally owned businesses that have become known for having great customer service. At Cako, a mini bakery chain in the midst of expansion, co-owner Albert Chen says it’s difficult to provide the same level of customer service when he can’t be present inside all of his stores on a 24/7 basis.
“We [the owners] used to be able to work at the stores, and when people came in they’d always ask, ‘What’s good? What do you suggest?’ It’s important that we are still able to continue to communicate the discovery process for products to our customers, even with the owners not being in the stores. As you hire more employees and scale, this concept of discovery becomes more difficult to manage,” says Chen. “When you don’t have owners at the store, and you have employees, it’s just more challenging for them to communicate with the same vigor and passion and accuracy when trying to find products that you think a customer will really love and come back for.”
One way that Chen is working to avoid the mistakes that other growing businesses have made is by utilizing hyperlocal tools that provide him with data about what products and flavors his customers are buying. He recently introduced a mobile loyalty and coupon program, which utilizes the company’s POS user display interface, along with a branded mobile app that that includes a mobile payments component.
“Based on this process, typically when someone comes to the store they ask, ‘What do you suggest?’ With the data now, we’re in the process of optimizing something where we can personalize recommendations and perks to customers based on what they already purchased before,” Chen says. “What we ultimately really want is for customers to come back and try different things. This enables us to actually suggest other products based on their existing history of purchases.”
Utilizing the mobile payments feature in Cako’s new mobile iPhone app, customers can pay for their purchases without removing their smartphones from their pockets. They can also redeem coupons automatically.
“All you do is you go to the store, and based on the geo-sense and the location service from your phone, it just knows [which] people are within this radius. When the user PINs in with a five-digital PIN, [the system] knows which users of the ones that are in the geo-sense are actually available to [pay]. With just the login, not even with an email address, you can [pay at] our store,” Chen says. “All of the coupons that you have in your app, they get added into the discount of your basket when you checkout. If you had free cupcake perks that you received, they get automatically deducted from the purchase amount, and then the balance is actually charged to either the [connected] credit card or the gift card.”
Integration was incredibly important to Chen as he evaluated which hyperlocal vendors to work with. He ultimately chose Revel and Index because the companies were able to connect his POS to his website.
“The challenge we had was, if you had an account on the website and you’re buying stuff at the store, we wanted the points to be the same account. That was actually more challenging than we anticipated, to get the systems to be able to talk to each other,” Chen says. “There were some security issues, too, because an employee or customer could just say they were someone else and use their points or add points to someone else’s account.”
Combating these issues and managing Cako’s growth as a company went hand-in-hand. Integrating the company’s front-side POS with the Revel POS enabled Chen to directly connect logged-in users to Cako’s back-end system. This provided insight into what each user was buying at the source, and it made the process of applying points to a loyalty account more efficient. It was only after that system was implemented that Chen rolled out the company’s iPhone app. He’s planning to release a similar app for Android phones later this year.
“The difficulty is that we’re still rolling out to all the stores. Our customers actually do go to different stores, and we want to make sure that their experience is pretty uniform. I also think from a training standpoint, we want to train [our employees] at one time, too,” Chen says.
In the coming months, Chen hopes to identify more hyperlocal vendors offering tools for managing user growth and operations. He would like to gather insight into what his customers are interested in buying, so he can find products that fit in that market and optimize his business processes. And of course, he’d like these tools to integrate into the hyperlocal platforms he’s already using.
“We definitely have a lot of things coming out,” Chen says. “The roadmap is still being worked out.”
The Takeaway
Hyperlocal tools are extremely useful for businesses that are beginning to scale. Vendors that provide insight into what’s going on at a business, even when the owner isn’t in-house to see for himself, provide a tremendous value. Cako has discovered this fact, which is why the company is currently in the process of evaluating even more hyperlocal platforms to be used to improve operational efficiencies as the company continues to scale.
Stephanie Miles is a senior editor at Street Fight.
