The connected barbershop that knows a customer’s name and chit-chat preferences as a customer walks in the door is moving beyond being a novelty retailer. The founders of Spruce realized everyone wants a piece of their technology.
Taylor and Becca Romero said they will split the Internet of Things barbershop and menswear store in two, with one side focusing on hair and clothing, the other on licensing the technology to others. The realization came relatively quickly to the couple during the three-month Target + Techstars accelerator, which wrapped up in Minneapolis on Tuesday.
“We built a bot that helps us run our store. But what’s funny and interesting is we didn’t build a bot to sell to other people. But when other business owners saw it, they asked if they can use it,” Taylor Romero said. “It doesn’t come up often, when you have something people want to buy before you’ve even thought about selling it.”
Spruce, which started in 2014 on Tennyson Street’s retail strip, probably would have split eventually. But this is accelerator time. Intense, fast-paced programs like the one created by Boulder-based Techstars matches tech startups with mentors, investors and experience in exchange for some equity. By putting internet into ordinary things — like a store’s signs — or using internet to help workers check schedules or trade shifts, startups like Spruce and its cohort Branch Messenger are solving problems common to many retailers.
Like Target, which has a 3-year commitment with Techstars and started piloting Branch Messenger’s shift-employee service, said Jenna Reck, a spokeswoman for the retail giant.
Startups “move really fast. When they want an answer to something, it’s not a week later. It’s an hour later. We need to work at their pace and not get bogged down by the organization we are as Target,” said Reck, adding that 30 senior Target executives helped mentor the 11 startups. “Target has a lot of hierarchies that can get in the way. All the things that are inherent in a startup and how they work, we wanted to learn from that.”
Revolar, another Denver startup in the Target/Techstars program, graduated from a Techstars program in Boulder last year. However, the company, which made a personal security device that discreetly texts contacts for help, couldn’t pass up the opportunity to get inside Target’s headquarters.
“We learned a ton about what works — and doesn’t work — in retail,” founder Jacqueline Ros wrote in an e-mail. “When you introduce a new product, especially an IoT product, there is a challenge in building consumer mass awareness. How do you make someone excited about something they’ve never heard of? How do you convince them to go to a store or pick up your product off the shelf? Techstars afforded us meetings with amazing people at every level of Target to ask these exact questions, learn from each other, and try new things that frankly, we wouldn’t have been able to do without the program.”
Revolar’s mentor was Target CEO Brian Cornell. The two companies are now working on a pilot to get Revolar devices into a few Target stores.
Retailers want in on the Internet of Things but they’re not doing a lot about it, said Nikki Baird, an analyst for Retail Systems Research, which surveyed retailers on IoT earlier this year.
“They know what it can do for them but the reality is doing it,” Baird said. “There’s an education gap. It’s not like you can go out and buy an IoT package, which is why I can understand why Spruce is spinning this off. They’ve done all the hard work of putting it together and essentially have a platform they can take to other retailers.”
Spruce doesn’t expect customers to download an app. Instead, the store texts customers on their cell phone or on Facebook Messenger, which helps Spruce verify customers are who they say they are and helps the Spruce Bot better track customer preferences. Internet-connected objects are all over the store help customers too, from the old-timey menu board, which posts wait time in real-time, to a button that staffers push when turning away walk-in customers. Such data helps Spruce know busier times to ramp up staffing.
Because everything is connected — including the sign outside that sends a notification to staff as the next customer walks up the steps — staff can greet customers by name. A new, secure Spruce wireless network lets regular customers add their credit card to accounts so they don’t need to bring their wallet.
“After you visit for the first time, Spruce Bot follows up with you and asks (about your visit) so we can address your concerns right out of the gate and catch feedback and criticism before it hits Yelp and Facebook,” Romero said. “Your suggestions are attached to your profile.”
Spruce initially joined Techstars hoping to expand beyond Tennyson Street. That’s still the plan for Spruce Retail. Spinning off Spruce Tech to license the system to other shopkeepers just became an opportunity, Romero said.
“Techstars has put us in touch with a caliber of people who would not have even answered the phone before,” said Romero, who plans to sleep for three days after Techstars. “It’s not even that the doors were closed before. They just weren’t there.”
