When Tim Griffin was in college, he got a job at the Apple Store. He wanted to make some extra cash, be able to pay his bills. He didn’t expect to stumble upon the idea that would transform his career and make him an entrepreneur.
But it happened as he watched customers walk in, day after day, and use the Apple Store app to scan a product on the wall with their phones, pay with their iTunes account and walk out. No contact with an Apple Store employee required.
The ease and stickiness of the app made Griffin worry briefly about the future of his job: If an app could do it, why would you need a Tim? But then he realized: This was cool. And it would be even cooler if the functionality wasn’t limited to the Apple Store and instead was inclusive of retailers across a range of verticals.
Five years later, Griffin is using the $300,000 he won from North Highland’s Big Idea Campaign back in April to build just that. This month, Griffin is introducing Cloosiv, a mobile app that allows customers to buy what they want right from their phones. Think Apple Store app that can be used anywhere you want to make a purchase, from a boutique to a restaurant to a brewery.
In fact, Cloosiv is launching with a tour of four Charlotte breweries, running from Oct. 18 through Oct. 25. QC Brewers Fest has signed on to sponsor the event, and $1 from every purchase made throughout the tour will go to benefit Acing Autism.
Throughout the tour, customers will be able to test the app by ordering and paying for drinks from their phones. No waiting in line or fighting for the bartender’s attention. And Cloosiv will buy the first drink for users.
The breweries are just a few of the local merchants who have bought into the Cloosiv concept. To date, 16 merchants representing 22 locations have signed on to use Griffin’s mobile solution.
“The merchant response to this has been overwhelming, which leads me to believe we’ve hit the mark there,” Griffin said.
And that’s a big part of the battle.
Many merchants have a sour taste in their mouth over the viability of retail apps, after spending tens of thousands building one of their own, only to see limited adoption.
“Merchants really believe that their brand carries a lot of weight and value, but they’ve made a bold assumption that customers care enough about it to download the app,” Griffin said. “[For an app to be successful], it really needs to add value to your life.”
So Griffin thought, if a retail app was inclusive of retailers across a variety of verticals, that would make it useful enough to justify the download.
That’s where the name Cloosiv comes from: It’s a play on the word “inclusive,” which is the experience that Griffin believes will drive the market.
“Everyone says this is big. It is big. It’s a lot to bite off, but I’m confident we can do it,” Griffin said.
However, for an app like Cloosiv to be successful, it will require buy-in from both merchants and customers. So the brewery tour will allow Griffin to collect ample customer feedback, while tossing back a few IPAs.
Cloosiv has come a long way from when Griffin developed the idea fresh out of college, in his first job in management consulting.
“But at 22 or 23, the business model I came up with was horrible,” he said.
He wanted to charge retailers a percentage on every purchase made. But as he learned, the margins in retail are thin.
“The last thing you want to do is take more money off the top,” he said.
He has since shifted to a SAAS (software as a service) revenue model, in which merchants purchase tiered packages depending on their needs and based on a per-location, per-month pricing structure.
The app then allows customers of a boutique, for example, to scan a barcode, pay for their items and leave without waiting in line or tracking down a sales person. At a brewery, you can order, pay and then pick up your drink at the bar when it’s ready. The mobile experience allows the customer to be in complete control, Griffin explained.
Griffin, 28, has built his company while continuing to work his day job as a consultant with North Highland, which gave him the initial $300,000 in funding that allowed him to enlist a team of part-time contractors. Now Griffin is preparing to launch a seed round and is looking to raise up to $3 million to support the expansion of Cloosiv’s app development and sales teams.
In the meantime, Griffin said he is focused on functionality before trying to scale.
“I’ve very passionate about clean and easy to use, but ultimately we need to be obsessed with how it works,” he explained. “We’ve got to get it right.”
Griffin expects Cloosiv to go live among all his merchants shortly after the brewery event. Along with the feedback, he also expects questions. For instance, theft: Wouldn’t an app that limits interaction with a store employee encourage bad behavior among customers?
Griffin’s response is an emphatic, ‘No.’
Theft, he said, is something that will always exist in the retail space. Customers aren’t really what retailers have to worry about: According to the US Retail Fraud Survey, employee theft is the single biggest cause of loss to retailers.
Griffin said that won’t change if customers can pay with their phones.
Then there’s the question about sales associates, today’s version of Griffin’s younger self.
Are they, in fact, no longer needed, as Griffin feared?
Again, the answer is, ‘No.’
While some customers will not need assistance, many others will. And enabling the associates to serve them – instead of ringing up sales – will only increase customer interaction and satisfaction, Griffin said.
Win, win.
