The Future Of Retail: A Decentralized Economy Of Data - Eran Eyal @ TOKEN2049

[Music] ready for joining us I'm going to be talking a little bit about decentralizing retail today and probably one of the most important things is how do we identify the user and put data in the hands of users in a way that's actually useful not just for the user but also for the retail economy a little bit about our product we actually have seven hundred and nineteen thousand users from two thirty-day pilots with major retailers we are the winners of BTC Miami the North American blockchain conference the largest one in the world as well as coin agenda and what we do is we're building a universal shopper profile we work with retailers to give you three to five years of your purchase data that you're in control and have total visibility of your data and you can use it to shape personalization across the web in a way that's never been done before as well as a cryptocurrency for retailers to then pay you to receive the adverts since this is the best data set to target you with and then for you to spend that within the retail economy we have a really strange time the brands that we love are going out of business we've all heard of Toys R Us American Apparel all kinds of other brands are going out of business and the big question we've got to ask is why while sea commerce is a massive opportunity only 7% of retailers can identify their user across multiple channels and devices eighty-five percent of retailers are inconsistent within messaging across devices if I don't know who you are as a customer how will I provide you the experiences that you deserve or be able to convert you into a sale it makes no sense I'll give you a good example of how this actually plays out in the real world imagine did you go to Nike comm and you look at 20 different items then you go over to edit Escom and you go buy a pair of pants what's wrong with us well because they don't know who you are for 30 days you'll be checked by put goodbye cookies and pixel tracking and you will receive adverts for 20 different items that are totally irrelevant to you that's frustrating for me as a user seeing all these adverts it's an assault on my senses sickening my dates is being sold and peddled and I'm not the financial a financial beneficiary of it nor do I get the personalisation I want the retailer spinning money in where does it go - it makes Facebook Google and all kind of ad exchanges really rich and it makes me know Richard not poor just poorer and also the retail economy gets poorer and of course Adidas and Nike don't share purchase data the most important thing they should be sharing because they're enemies so when you go buy something at night at adidas they don't tell Nike that you that a purchase was made it's not a very healthy scenario even worse than this we have GDP our compliance which is a great thing you know who knows what GDP our compliance is yeah by the way GDP our compliance is a data protection act that got passed two years ago in Europe and it affects anybody who is selling to a European customer doesn't matter if you're if they're in America Timbuktu you're selling to this customer then their European you're gonna fall under these laws and they state that the users the owner their data it's a very exciting thing for us as consumers and if you ask your data back you have to they have to give it to you in a downloadable discernible and shareable format they also have to offer data deletion not just from themselves but from the apartments and a full audits on what they did with your data I don't know if you've been watching what's been happening with Cambridge analytic and Facebook your data is being bought and sold and peddled and you're not the beneficiary that has to change the other side of that they're being assaulted by a formidable foe and what they've built at Amazon is this incredible a purchase data ecosystem where all the retailers actually do in a way talk to themselves and if these are all the retailers and this is the user this is the purchase data ecosystem they know exactly what you buy at every single one of their other retailers and they target to you and they give you incredible experiences within Amazon that are amazing it's so amazing that 46 percent of the world's e-commerce today is it driven by Amazon but here's the interesting point 30% of the world's Iike a 30% of Amazon's revenue is coming from the raw product recommendation bar which is driven by a purchase by purchase history that means a 15% of the world as being a world's e-commerce is being driven by purchase history from the product recommendation Bob how do we give that to the world well what we do is we use artificial intelligence driven games on retailers websites that we provide to quickly understand the user and also we have the we supply the one thing that doesn't exist right now which is that we collect all the purchase data from the last three to five years from all the different retailers and give it to you the user how does this play out well what we do is that we work with the retailer let's say Zegna and then you will send an email to their car to their customers and say you're gonna get the most personal experience you're going to get financial rewards and deals the way you've never had before and you'll control your data user signs up they play the game on the site of the of Zegna to understand them better but most importantly Zegna gives you three to five years of your purchase data with all the SKU level identifiers so we know what that means it creates an enhanced profile from that point we then reach out to all the other retailers in our network and we suck in three to five years of purchase data from them and this network is live so if you buy something from one retailer your profile updates and that's the whole of retail and all other product recommendations we're running on all other sites and emails in other places all update in a complementary way the best part of all of this is that we built a decentralized and distributed artificial intelligence and what it does is it sits between the just-for-you page where we supply these recommendations on the retailer and it keeps your data safe it only supplies the product recommendations based on the real-time inventory data that the retailer has by comparing it to your data and no longer you're handing your data over to the retailer to be bought and sold and peddled and do whatever they want to do with it so what does that look like so it's great to see a product in action so here you see us installed on jaylen zinberg's page the user goes to the just-for-you tab clicks on it I'm gonna log in with shopping I'll supply some of mine from some of my information and here you'll see this is actually my profile in action skinny jeans all these kind of things but these are not me right so what we do is 20% of what we supply for us called surprise and delight and our a our surprise recommendations that are diametrically opposed to what you purchased in the past or new fashions and new seasons you can also remove items that you don't like and your profile becomes more intelligence and that's the whole web it becomes more intelligence not just one site I go to buy an item the price is based on what I spend on average and other places my size of my jeans is pre-populated I click checkout it pulls my data from my from my central profile I check out with shopping and I've got one picture I check out on every single website you never have to fill out another form much if you realize that one point four trillion dollars is lost in my in in shopping cart abandonment every year because of nonsense like filling out forms who are we I've built and sold three businesses before in the Tekken design space the real stars of our team are people like the Vicari Apache how do we build something like a protocol to understand the user in this kind of scale well de Vaca was the first engineering high and principal program at Priceline for 14 years Prosser and today's a is a 100 billion dollar company and working with them is the VP of engineering of Praslin as well as the lead engineer of Praslin for 10 years Jeremy our blockchain technology officer my good friend of 25 years who helped us to create our resolution for a side chain on aetherium that allows you to run transactions at a million transactions per second in a public permissions and federated blockchain I will be making that technology available for free for everyone else to develop around much like Facebook had to develop Cassandra at the scale or ADA our Amazon how to develop AWS we're doing the same we're just gonna give the solution for free to everybody how do we get to the retailers well Michael our CRO used to be the president of global sales for Elie Tahari and the managing director of Donna Karen and DKNY and also the SVP at Valentino we understand retail it's in our blood and of course joined with me today is my colleague and good friend Doron it was the CMO of Lauder me the managing director of mine share and CMO of IAB amongst many other companies we're also supported by some amazing advisors and by the way the majority of our advisors are actually investors or participants inside our token sale so they're highly invested in seeing us all the way through here that includes Tom Ganza the founder of DocuSign I'm sure all of us have used okie sonnets on stage and Amedeo who is not only invested in over 120 startups resources family owns the biggest Dutch retailer in Europe we have seven hundred nineteen thousand users from two 30-day pilots but what's really more amazing is that when people see these product recommendations instead of a hundred people shopping 122 people on average shop we tested with Zegna a high-end men's suiting brand a million people received the email from zinnia and 130 people joined in 30 days 130,000 people joined in 30 days 5,300 came back to the just-for-you page on his site where we serve these aggregated product recommendations and it was into increase of 21 point 8 percent increase in transactional conversion we didn't believe these numbers so we went over to test it in another vertical which is Middle America instead of high-end with specifically focused on furniture and home goods and we saw that 500,000 people out of 4 million people who receive the email joint and out of that 86,000 people shops on Bed Bath & Beyond and generating 13 million dollars of revenue and that was a 22 percent increase in transaction we also saw a very interesting viral network effect that we had built in that 72 thousand users on-boarded 65 thousand other users we do this because we allow you to share your profile with friends and family so when it comes to gifting you're able to get seen this kind of gifting by them searching on your lens looking at the world of gifting through your profiles eyes and bang you the things that are in your size your style and in your fit you shouldn't be surprised by these numbers really 88% of users want to have a more personalized experience based on having their data leveraged so we had to build this on the blockchain because there's no ways that you can build a data set like this I mean nothing exists like this across correlated purchase data set like this you had to build this on the blockchain because you can't have a honeypot of data waiting to be hacked it was the first reason that retailers didn't want to wouldn't want to do this kind of a solution I mean you've seen how Yahoo got hacked and all these people got hacked so the blockchain saved us from that and then the other part of course is that retailers don't wanna share they purchase data with one another but because of the way then our artificial intelligence works your data never gets handed over to a retailer they never get to see what the history of your of your purchasing happen is they live in a Nirvana like state of showing the right product recommendations through our artificial intelligence by having by essentially having all this data handled by the AI and we had to solve some really big problems with etherium not that we've solved the actual problems in the theorem itself with etherium but we had to basically build a side chain in order to facilitate a million transactions per second which is visa level and the great thing is you're all your data is stored on a Federation of nodes retailers run the nodes and then your data is distributed among closing all these nodes but also because our AI is distributed the more retailers we have the more computing power we have and that means that we have several AI is essentially dealing with your data at any point in time so even though artificial intelligence itself when it's dealing with your data can't be hacked how do we charge a really simple model we charge like any other behavioral marketing company the more you call the data the more that we charge you will have our product ready about the end of August ready to be shipped into our first retail customer and we're quite far ahead of the game we have the we have agreements coming into play with with private equity companies that are owned 80 retail brands in certain regions so we're really ready to scale in a very large way we're also measuring some interesting things that have never been able to be measured before for example we've constantly been addicted to the lifetime revenue at to the LTV equation right not some value of the customer this is the CAC equation but that's not a great equation because it's only focused on one website generally but we are measuring your purchase history your Muller purchase history your conversions whether you're buying Givenchy or Louboutin are you buying at full price or you buying at part price we're measuring something new the lifetime margin of the customer the real thing that you really want to know about the customer because when you measure this you can build an ad exchange that delivers ads to the users in their own profile and pay the users was why do you want to pay these people for sucking money out of the economy of their own eg people should be having the conversation of engagement it should be between the retailer and the user no one else deserve to be there we give all the revenue all the advertising revenue over to you the user so that you can come and spend it inside the world of retail retailer once more users don't advertise for the users ask the users that you have the powerful advocates to refer friends they refer friends those people come and join pay them or shop in tokens and then you can come spin those shopping tokens in the world of retail where you face a high level of personalization from our engine based on your data which was what was used to target you in the first place and then you have a real economy of personalization and/or finance how are we going to hack getting the tokens to the users this is one of the biggest questions utility tokens do not answer we we had to really wreck our brains about this and thanks to some of our advisors along the path we came to a solution that I believe is very elegant and egalitarian we're gonna take half of the revenue that we get from the retailers in the first year for behavioral marketing which is right for the our revenue are we gonna purchase the tokens directly from the exchange and give it to the retailer for free so if they're paying us a million dollars in the first year of business we're gonna take half a million of that revenue which is right for the hours are we gonna give it to them in shop in tokens with the condition they have to hold onto them for six months and they have to circulate them to the utility holders the users by sending them adverts not giving it to freedom for free or air dropping them or anything like that pay them to access the to deliver ads and then they come in and they spend them with you and we start to create that circulation and less the quiddity out in the markets which we hope has positive effects for everybody we're showing 1.5 billion tokens a third are kept for the company which are under and the advisors and the early stage investors those on a three-year lockup and a smart contract we contact them ok every year a third gets unlocked based on hitting product milestones so we keep ourselves honest then a third is for deal-making for retailer incentives loyalty distribution user gifting a large part that's going to be actually held in reserve for 24 months for a secondary offering so we can't in any way affect the market and the market feels secure and a third is being sold not token sale I'm really proud to announce that we won when we won't be to see Miami we actually saw salt out of our private pre-sell in less than 48 hours and we're four times oversubscribed and right now we are well over 65% through our token sell I think by Friday we'll be at over 70% and if you actually got our starts it's remarkable despite the economy every few seconds you can actually see live people requesting participation and we're testing themselves from everywhere from Japan to Russia to you name it and we have chosen to exclude American investors but all participants for the moment until the SEC has decided to give clear regulation arise fishy around utility tokens and what's really interesting about being here today is that the majority of our participation has come from Asia we never really knew it would we were play out that way but Asia has a swung swung open its doors especially here in Hong Kong and in Korea in ways that we never expected we've been approached by everybody everybody from LG CNAs to Kakao pay because think about people like that we have 3,000 retailers and are looking for a new product to sell and they have 20 million customers but have data data storage issues with us you give the data back to the user nobody actually has to have to deal with holding the data anymore the most onerous thing that they have to deal with and then on top of that if we're more successful that they essentially process more payments because you have their shopping cart abandonment in you have higher conversions so if you would like to speak to me a little bit about our token cell it's not really what I'm here to discuss the what I'm here to discuss on stage today I'll be here please catch me afterwards but what we're here to really assure in is a new protocol for understanding the user and what's really interesting is that we couldn't have actually not achieved this in a pre blockchain state with right by the way because of the same issues again and again and all comes down to one simple thing we all know in our heart of hearts no matter who you are whether your eyes whether you own an ad exchange or whether you have shares in Facebook we all know one simple truth we all want our data and we all want to own it and we all deserve to own it in this house and it shouldn't be peddled around it shouldn't be sold but it's not enough to just give a person their data you have to give them an economy of personalization and an economy of Finance that makes sense and that's our mission and thank you very much for listening to me today [Applause]