Earlier this year, Liron Slonimsky-Shemy, Co-founder & CEO of Awear, took some time out of her busy schedule to chat to our Editor, Lydia Hanson. Liron (with a background in scriptwriting) and Lydia (from the theatrical, creative world) spoke passionately about two industries: the entertainment world [the majority of which has been omitted from this transcript for length] and the fashion world. Liron spoke humbly of her co-founder and the entire team behind Awear, and shared for us the beginnings of the business, how it works, and the business pivot made early on to address specific challenges in Fashion.
Name: Liron Slonimsky-Shemy
Occupation: Co-founder & CEO, Awear
Likes: Escape rooms (my husband and I make a great team!)
Dislikes: People with no opinion
Words to live by: “Smile to the world and the world will smile to you” (my grandmother), and, “Not all opinions are created equally, sometimes you must ignore negativity” (my father) …I live in an on-going conflict between the two.
Lydia Hanson: Liron, thanks for taking the time out to talk to us – I know you’ve been jetsetting all over recently. Can I start by asking you to tell our readers a little bit about yourself and your partners, and how you came into the world of smart technology and the Internet of Things?
Liron Slonimsky-Shemy: No problem, and thank you to you too. So, I started my career as a scriptwriter, which is very different than a lot of entrepreneurs. But my Co-founder, Oren Zomer, the “smarter part”, is purely tech oriented, so we compliment each other very well. But I started as a scriptwriter, where I successfully raised money from two large funds to write a drama feature film that won first prize for Best Script in the Haifa Film Festival [in Israel]. Little did I know then that that would not be the end of my fundraising days.
I decided to pivot. I really enjoy writing, and my passion was science fiction, but unfortunately in Israel there is no real market for sci-fi in cinema; that falls far behind drama and political drama, which are interesting topics but they aren’t my passions. I wanted to pursue something else, and get involved with the high tech industry. So I pivoted and got my MBA; I took my passion for technology to the online gaming industry. I honed my skills in online marketing, which has been advantageous to [the business] Awear as well.
I wouldn’t say I set out wanting to be an entrepreneur. [Laughing] In my opinion, to want to be an entrepreneur you must be a combination of stupid and optimistic: stupid to get into this industry and believe you can make a change, but also optimistic enough to believe you will be one to make this change. I’m sure other entrepreneurs will strongly disagree with me, but that’s just my opinion.
Lydia Hanson: What a fantastic background. It’s lovely to come across an ally from the film world in Fashion, which doesn’t happen too often. (And I’ll be sure to pick your brains on this away from this interview.)
Liron Slonimsky-Shemy: You share in my journey. I took the side of making a start-up, which isn’t a huge way away from being a scriptwriter; as a scriptwriter I needed to raise money, and as an entrepreneur of course I need to raise money, and convince investors to trust in what we’re building, and then actually execute this. Just like you find the best producer, the best director, and the best cameraperson to shoot your film, you need to find the best co-founder, the best developer, the best hardware person, the best marketing person – the best everything – to produce your idea.
Lydia Hanson: Precisely – I can certainly see the similarities. And your co-founder is Oren?
Liron Slonimsky-Shemy: Yes, Oren Zomer is my co-founder, and the smartest person I know. He was an Elite Cyber Intelligence Officer in the Israeli Army, where we are all soldiers in Israel, at 18 and 19. He was in the ‘smart people’ programme – at the time starting his BA in unique programming, and then onto doing his Master in computer science and mathematics – and he really is the brains behind our encrypted technology.
I met him in 2013, and we developed Awear’s platform. He was the one to give our product a beating heart.
Lydia Hanson: What a lovely turn of phrase. So I supposed yourself and Oren bring very different things, and worlds, together to create something amazing.
Liron Slonimsky-Shemy: [Humbly] …and of course the team; everybody brings something to the table.
Lydia Hanson: Of course! Can you tell me a little more about the business, which is all about creating brand ambassadors through smart tags, right?
Liron Slonimsky-Shemy: Awear’s platform was inspired by the most successful loyalty program to date – the Frequent Flyer program utilized by airlines. What this means for us is the more that you wear an item, the more points you get – not only for wearing it, but also for wearing it in a certain location where the brand wants to increase visibility. Consumers are incentivized to wear an item and collect points for wearing the item and those points translate to a status. For example, if you have X number of points you achieve Silver status (the name of the status is up to the brand). This status unlocks rewards such as personalized targeted promotions, discounts as well as VIP experiences.
Experiences are the most important part for us; you can buy discounts, but you can’t buy experiences. And these experiences relate to the brand.
Lydia Hanson: Can you give us an example of a VIP experience?
Liron Slonimsky-Shemy: Sure. So an experience could play out like: a consumer arrives to the US Open or a concert wearing their smart tagged item and they receive a push notification that they have access to a lounge where they can enjoy a glass of champagne for being a brand ambassador. Or even, if a brand knows their customers love coffee, whenever you visit a certain coffee shop wearing the brand, you get something for free. It’s often about something small that makes you feel very special. It could be getting to listen to a playlist that it only available to you, or getting to see a collection before other people, but not because you purchased a lot from the brand, rather because you engage with that brand.
It’s the next evolution, in a way, of being a blogger but without the camera and a blog. It’s just about increasing the visibility of a brand. So Awear allows consumers to get rewarded for wearing the brand(s) they love while the brand is able to collect valuable insights on post-sale product behavior that will leverage repeat sales. We believe that a consumer who buys an item is a brand’s natural ambassador and should get rewarded for their loyalty.
Lydia Hanson: And just to check, we’re only talking about items that you can wear? Do you work with anyone outside of the retail, footwear and apparel space?
Liron Slonimsky-Shemy: We work with footwear, accessories and clothing only – no underwear [laughing]. Only things you can see. You may have an amazing bra, but brands probably shouldn’t push you to wear it more to get more points.
Lydia Hanson: [Also laughing] Yes, I can see the issues that underwear would bring. So, for the customer, the incentive is obviously there to get these experiences without having to actually do anything more than what they would presumably already be doing: wearing a certain item.
From a brand point of view, I suppose the benefits are that they are able to gain intelligence into their consumer base by working with Awear?
Liron Slonimsky-Shemy: Yes, the way I see it is like a relationship, and a relationship must be mutual. To know your partner, you need to know what they like and what they don’t like, which is not always communicated obviously. By harnessing the power of IoT and big data analytics brands can communicate, engage and reward their brand ambassadors in real-time creating a win-win for all. The brand can mobilize these brand ambassadors by incentivizing them to wear specific products to locations or events, creating large scale brand awareness.
Currently, after the point of sale the brand loses their connection to the product and cannot engage the consumer in a meaningful way. Awear provides valuable data to brands on their product’s usage patterns, which leads to a better understanding of consumers and their needs. Brands gain better control over marketing, advertising and product development. These post purchase product usage learnings, in real-time, enable the brand to understand a consumer’s lifestyle, which increases the likelihood for the brand to make a second sale.
These learnings are measure from actions; we see when they’re wearing an item, how they’re wearing it, how often they’re wearing it. We then study the behavior with the item, which is the way the consumer sees the brand. This is the way to build a relationship. And based on this data, you give value to the consumer. This is the opposite of what is happening at the moment, where the data is so broad. Today it’s only online data, where a brand communicates with all consumers the same way – through a Facebook group, or an Instagram profile – and this isn’t the right way to be in a relationship. The mutual part means a customer will be loyal to a brand, and feel proud to wear the design or the logo (although the trend right now is to hide the logo). With Awear you can bring back the value for the brand, whilst getting rewarded in a way that’s very targeted to you, because the brand knows you. I say ‘you’, but it’s very anonymous; it’s like how Google knows ‘you’ or Whatsapp knows ‘me’. The brand doesn’t know ‘me’ as Liron but as another statistic and the system automatically picks me the right experience for me.
Lydia Hanson: It’s very clever but it also sounds very – and forgive me for using this word – simple in its idea. It obviously isn’t simple in the execution and technology behind it, but the actual notion of this idea that seems so logical and so beneficial to both parties makes you wonder why it hasn’t been around for a long time?
Liron Slonimsky-Shemy: Yes, and your answer is in your question. You mentioned the technology and the execution. From my point of view this is the important part, and from what I could see this is why nobody was doing this before. Awear supplies brands with a BLE tag to embed into any fashion item and digitally connects to Awear’s servers using the consumer’s smart phone. The data captured gives brands a high-level view into product usage after the point of sale, and deep understanding of who their customers are.
The technology is not trivial; it’s very difficult to make a small Bluetooth tag that lasts so long, that is so tiny, embedded in the item, that is also encrypted. This encryption is another layer that not many IoT products or applications have – then we have layers of communication with the phone and with the servers, and layers of algorithms to know to identify usage etc. and it all becomes very complex.
We started to do the ‘Internet of Things’ before it was ‘trendy’ to talk about wearable technology. When we started raising money for this startup, three years ago, people told us we were crazy to think clothes could talk with customers. They said, “What are you going to do with the inventory of the hardware?” This question seems crazy today, but 3 years ago it was not trivial to use Bluetooth low energy as a technology. Because we started ahead of the curve, we had time to really work on our offering and make it better than other low energy Bluetooth devices in the market right now. We developed and fitted the technology to industry needs. We talked to so many CEOs and CMOs, and we know how to fit our technology to the market.
The other variant is the execution, you’re right. We all know – it’s no secret – that the fashion industry is one of the most old-fashioned industries in the world when it comes to adopting new technologies. Executing innovation related to fashion is very hard.
Lydia Hanson: I just wanted to pick up on your point about encryption. I think a lot of push back from consumers when the ‘Internet of Things’ became ‘trendy’ as you said, came from a place of uncertainty – from a place of “well, I don’t want my data freely available to anyone and everyone”.
Liron Slonimsky-Shemy: Exactly – and thanks to [co-founder] Oren for us! As an officer in a cyber intelligence unit, he had the knowledge and experience to make everything, for us, very secure. He wrote up the security aspect before we even thought about encrypting our tags, because nobody was encrypting anything. People don’t encrypt Bluetooth because it takes a lot of power from the battery; they try to save power by not encrypting their technology. Oren said, “no, we must”.
Lydia Hanson: It’s very important. You mentioned you’ve been building this for a few years; how long has the technology been available?
Liron Slonimsky-Shemy: Well, we pivoted our product. We actually started with something else. If you don’t pivot your product, you probably aren’t a ‘startup’. We started with ‘Shazam’ for fashion, which meant you could scan an item from a distance – 30 meters – and then identify the item and purchase it. We did a pilot with DKNY, and that’s where we got out first believer and active strategic advisor, Aliza Licht. She has been instrumental in navigating the fashion space and making sure we are always on the right track when speaking to a brand.
So we piloted this, and it got a huge buzz – more than a huge buzz – which opened the door for us to talk with so many fashion brands. It was here that we realized they all had an immediate need, more than anything else, to get the ability to make that second sale. They said that they didn’t really know their consumers, which is a huge pain point. Talking about second sales and consumers, we realized they hadn’t found the right loyalty platform to fit their needs. The more we explored the more we realized the older, standard loyalty programmes were not working well for fashion brands. Then we thought about how we could pivot our technology to a product that could give immediate value to these brands, and answer those pains – which is engagement. We are doing this in a creative way that will fit more to the younger generation, and that’s how we came up with Awear.
Lydia Hanson: So you actually created something based on real feedback, and to answer a real issue you found in the market?
Liron Slonimsky-Shemy: Yes. It’s like being a scriptwriter, or being a journalist – you see the facts and you write a story on those facts.
Lydia Hanson: There certainly are parallels not always obvious.
I understand you have some ideas around ‘gamifying’ your offering?
Liron Slonimsky-Shemy: We really believe in gamification. Gamifying is a great way to engage and activate a consumer. The Starbucks loyalty programme, for example, in my point of view, is one of the best in the market today. I think the reason it works is because it’s gamified; it’s fun. I think other loyalty programmes fail because they might have a great idea, but they aren’t fun. The gamification we’re using is a bit similar to Pokémon GO. We actually developed it before Pokémon GO, but then that hit the streets and validated what we were already showing brands in our app. Then brands in New York starting calling us “Pokémon GO for fashion,” which I really like [laughing].
Instead of catching Pokémon we were suggesting that consumer’s catch their next reward. We’re using geo-location so we know where the consumer is, and where they are wearing the item, and then we spread ‘hot spots’ – which are like boosters – where if consumers wear an item to these locations they get more points, like a game. The hot spots are bespoke to the brand; so if a brand wanted to increase visibility in music festivals, then festivals would be the hot spots, or if a brand wanted to increase visibility in very exclusive locations the hot spots would be places like Soho House. So, as a consumer, when I’m in a certain location with hot spots around me I go and ‘catch it’ and get points and often a surprise.
We have an incredible team of developers that are gaming experts and they have integrated aspects they’ve researched and experiences to bring the best experience possible to the end user.
Lydia Hanson: Well if the success of Pokémon GO is anything to go by, then I think you’re onto a winner.
Liron Slonimsky-Shemy: I think that Pokémon GO was such a huge success because people got excited to find and collect new things in new locations. People love to collect. 65% of Pokémon GO players were women and, historically, women like to collect. I know I loved collecting stickers as a little girl.
In our case, you collect new experiences when you wear your item to new hot spots relevant to the brand. And that’s what makes you the best ambassador.
There are more gamified aspects, like if you wear an item with a friend who also has a smart item you get double the points etcetera. There are lots of gamified aspects we’re using to keep the consumer engaged, and keep it fun.
Lydia Hanson: And who doesn’t love having fun? So you pivoted the business to reflect very real issues in the industry. Have you come across any other challenges for your business?
Liron Slonimsky-Shemy: Currently, there is no solution like ours in the marketplace and, while we have received great interest, encouragement and positive feedback from brands, we have found that a consistent barrier to entry is the slow fashion sales cycle. Implementing a disruptive technology like ours takes a forward thinking brand who can discern between wearable technology that can actually benefit both consumer and brand for the long haul.
Lydia Hanson: And have you come across any other challenges in the industry, not specific to you and your technology, that you think need to be addressed?
Liron Slonimsky-Shemy: I think that the fashion industry is a great market to approach, because for a very long time they did not adopt innovation, so the opportunities in this industry are huge. We’re addressing loyalty engagement and data for sales, but there are so many other areas that need to be addressed. One would be the high return rate in online purchasing; consumers return clothes very frequently and brands are losing a lot of money. I know there are some startups that are trying to find a solution to this. I’m not familiar with the success of these, but I’m confident that at least one will prevail because there are so many addressing the challenge.
Consumers have become increasingly discerning in their shopping experience. They expect personalized service and customized products in every aspect of their lives and fashion is no different. Brands are seeing this as a way to differentiate themselves to meet these customer expectations. We see a future where technology adoption will allow brands to offer individualized virtual shopping experiences and fitting rooms as well as 3D scanning for made-to-measure clothing production.
Lydia Hanson: That’s a great point.
Is your software ‘open’ (i.e. capable of working with other technology platforms)? Is that something you’re open to?
Liron Slonimsky-Shemy: We are open to working with, and integrating with, other technology platforms if it brings a better product to the end user but in the beginning we believe it is important to focus on our own so we can create the optimal product before we mix with others.
We are very open to using other technologies in our own platform, though. If, for example, tomorrow there was a different technology than Bluetooth’s low energy, that is better, then we will use it. But, whether or not our technology can be used in other platforms, I suppose it depends on the platform.
Lydia Hanson: We’ve discussed gamifying – which is a big development for Awear – but are there any other upcoming developments or plans you’re able to share with us?
Liron Slonimsky-Shemy: Unfortunately my lips are sealed. We’re working in a few directions, but we’re under NDA so I can’t disclose much. If they were my secrets, I could share, but as they are our partner’s secrets I cannot.
I can say that soon you will see Awear launch with a multinational fashion brand that is a leader in innovation and forward thinking. We could not have wished for a better partner.
Lydia Hanson: Not to worry – we understand the ‘hush hush’ nature of our industry. Finally, is there anything else you’d like to discuss that we haven’t touched upon? Any final words for our readers?
Liron Slonimsky-Shemy: I’m glad I’ve been able to share a lot with you. I hope you and your readers are excited to experience Awear. As you now know, we work well and develop well based on feedback, so if any readers want to share anything with me, I encourage them to reach out.