Mister Beacon Episode #62
Connected Products - Talkin' ThingsJanuary 22, 2018
Can you even imagine any reason your motor oil would need to be a connected product? To stretch your thinking a bit more, how about pharmaceuticals? These are some of the cutting edge examples of how connectivity in packaging and everyday products is making a difference both to the consumer and the cost and production inherent in bringing those products to market.
In this episode of Mr. Beacon, Steve talks with Marcin Pilarz, CEO of Talkin’ Things, a company that integrates connected technologies with everyday products. In this conversation you will hear why this particular application of NFC technology is beneficial, the particular hurdles encountered when implementing it - especially with well-established brands, and how the industry is poised to grow in the next few years.
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The Mr. Beacon podcast presents connected products, Talkin' things with special guest, Marcin Pilarz, CEO of Talkin' Things. The Mr. Beacon podcast is sponsored by Wiliot, on scaling IoT with battery free Bluetooth.
Steve Statler 00:16
So Marcin, thanks very much for doing the Mr. Beacon podcast, it's great to have someone from Poland, he already, that's an amazing ecosystem that you've got over here. And we have tended to focus in this show interviewing the CEOs of companies that make beacons, which are generally about contextual experiences based on where you are, but you do something different Talkin' Things, your your company, your driving experiences, based on what people have about making you center your business around objects. And so I think this is fascinating. So far, I'm thinking that most of your businesses around NFC type triggers, but maybe we'll hear more about that later. But we're hoping that Bluetooth is going to come in the future. Perhaps the best way to kick this thing off is just for you to introduce us to what your company does.
Marcin Pilarz 01:15
Yes, so. So our company, in our company, we do connected products, but the connected products, I mean, everyday using product, we've asked to be connected. So you can think about a bottle of wine, you can think about medicines, you can think about even engine oil, which could be connected. So we are we talk always in our combined about not only about Internet of Things, but rather about Internet of everything to connect all of these products, which you buy via e commerce or you buy in traditional shops. So every single product which you can find on the shopping shelf could be connected. And this is exactly what we do in Talkin' Things.
Steve Statler 02:03
And the way you establish that connection, is that just with NFC technology, or are there other technologies that you're looking at.
Marcin Pilarz 02:13
We use, mostly we use NFC technology, but it's just a matter of triggers which you use for data, it could be from very simple technologies like QR codes, barcodes, it could be NFC technology, it could be in the future, probably Bluetooth technology as well. But also we are very open for other technologists visual recognition, like augmented reality, which we know is is quite common today for the for the for the for the products, as well. So everything we can use for to establish this connection between unique customer who's using his smartphone and, and any other technology which allows us to identify product to have this match and hence connection between a customer and the product.
Steve Statler 03:13
So and it seems like you potentially can do kind of end to end pretty much everything that needs to be done from helping with antenna design through to having a content management system and even some of the creative Can you kind of break down into pieces what your offering consists of Do you have kind of a content management system as well as tags?
Marcin Pilarz 03:39
Yes, of course, we have end to end system which combined as a first step trigger which we select with our client, what kind of trigger we should use to identify this product that could be LFC. And once we decide that we use NFC we support our client to decide what kind of standard we should use for that what kind of chip we should use for that then we make a make as we mentioned, we make a talk or we fit the technology exactly to the packaging, because everything what we do this connection we do fruit packaging. So we can say that we also do smart packaging systems. So once we talk about the NFC technology, which is our main trigger for the for the communication, then we we design specific antenna of attack just to fit exactly to the existing packaging not to change any anything or just make small changes for this packaging. Then we deliver full cryptographic, for the for the tax or for the selected technology, a background front of software with SDK to is to have an easy connection with existing mobile application of our clients. We deliver Full equipment, this is very important thing. So we deliver antennas and readers to establish connection during the distribution, distribution or during that production to assign specific attributes to every single product, then we decide and we support with building our campaigns, marketing campaigns around technology, because we used to say in our company that technology without the specific concept is worth nothing. So we have our clients to build this campaigns, very specific campaigns around the Internet of Things and this connectivity mobile. And in the end, we collect data. So we maintain this data and help we help our clients to analyze this data which which we which are collected, and this is exactly our end to end system. So based on the system, we deliver this portal total solution that our clients don't have to think about any additional company to have to join the project to really deliver the solution than they imagined.
Steve Statler 06:26
I'd love to drill into each of those areas that you touched on in a bit more detail. But before we do that, give us a sense of how develop this market is that you have focused on because this is pretty futuristic in nature. And my sense is that this isn't mainstream yet, but maybe I'm wrong Are you are your customers generally in kind of the pilot proof of concept stage? How widespread is the embedding of NFC in products and packaging at this stage?
Marcin Pilarz 07:04
Yes, we can say that this is something new on the market, you cannot find too many product projects products with NFC technology on the shopping shelf today. But what we what we see from our from our perspective from our clients perspective, that it will change in couple of next small couple of next years. Technology which we deliver to our clients this possibility of connectivity and to connect product with a client allows to solve many needs, which are existing on the market, but in a traditional way through traditional Packaging Companies are not able to solve them. So, having this possibility we solve some of this product problems. For example, protection against refilling wine bottles is one of the one of the one of the things that we that we deliver or loyalty programs through packaging without integration with retailers, so this is also the kind of solution we we we provide. So today you cannot find too many products products on the market, but it will change this year it will change next year. We have couple of implementations today. Smaller bigger implementation cycle is quite long. But you will see even today we even run projects which will be on the market summer 2019 with a big rollouts, so today, not today, you can find some pilots implementation on the market from our side, some of our regular implementations, but still in a small scale. But as I mentioned, we work on one big implementation two implementations today. So they will be on the market burgers.
Steve Statler 09:12
So you've talked about anti refilling as one application and I'm assuming that just anti counterfeit is another thing that people are asking you for. Can you give us some examples of some of the early projects that you have done and briefly summarize what what the driver has been for those projects?
Marcin Pilarz 09:37
We've done some some projects what I can talk on the market is for example, I Alba 1914. This is cosmetic company where we protect products against counterfeiting. So exactly functionality you mentioned and the connection declined because this company is selling got most of the products in Asia. They are from Europe or so. Oh, you know, this contact between this, these two continents is quite difficult. So they are trying to grab this clients trying trying to connect directly with these clients to provide them new information about the brand and to really drive this, this business. So this is this is an example of implementation we did what else we did, Exxon Mobil. With mobile one campaign in United States, there was additional information about about oil which you are going to buy. But the most important thing in this implementation was very easy access to information if this oil fits to your engine. So there was a there was mechanics implemented inside a web application that you just select your engine. And just after that, you, you get confirmation that it's all exactly fit to your engine. So this is great example that we show how we solve the problem of, of a product things connected with the technology side of product.
Steve Statler 11:16
I agree, I think it's a fantastic example, because I see some drivers the the brands care about that maybe the customers don't, if we come back to anti counterfeiting? How big an issue is it? And my sense is that the brands care about it more than the consumers. Like if I got a a Rolex watch for 50 bucks, I know it's not a Rolex watch. I'm not really that worried about counterfeiting. Because Because I know, I guess if I'm paying $5,000 for it, then I want to know that it's a real one, to talk to me a bit more about the balance between the drivers for the brands versus the drivers for the consumers and how you reconcile those two things.
Marcin Pilarz 12:03
Yes, your touch, very important point when you talk about the counterfeiting of a product, because you mentioned about one customer, a customer who buys a Rolex, which costs 50 bucks and this one who buy for 5000 Yeah, which is, which is a real price. And the problem is that this client who is who want to buy a Rolex for 50 bucks, is it will never be our client. This is not person, this is not a person who would like to buy genuine product, he's just he just want to have this role like this logo on it. So this is not our client, we rather protect this client who would like to buy genuine one, but somebody's cheating him. So he's not able to check if this is the genuineness of the product. So this is very, very important thing. And yeah, that's really good question exactly what is this relation, you know, between the client and the brand owner is depends on the industry is depends on the product because once you are buying Rolex, okay, you can buy it for 50 bucks, there's a lot of people who would like to buy a fake product, because there was a nice side on that and this is still the product that you can use, but once you think about the alcohol product bar or once you think about the pharmaceutical product, everyone cares about that everyone would like to take a genuine peel just to make sure that it will not hurt you or it will help you because this is very also important, I think, because there is a lot of fake product on the market. But it was it is placebo is still sometimes it's still okay. But sometimes there is a very, you know, very, I can say bad appeals, that it will really hurt you. So, it will not placebo will not help you I mean not make you healthier, but but but once there is something which is mix of kind of mixture, and you take this pill then you can then you can be heard. So, so this is very important, which industrial reconsider and we are talking about. So sometimes it customer really care. Of course brand, always cared about that. Because this is loss of revenues once you cannot sell your product and your clients are cheated. So, so so this is this difference between.
Steve Statler 14:50
That makes sense. And so it's really a matter of life and death if it's if it's pharmaceuticals, especially. I mean, some really bad things have happened. and even products like baby powder and so forth. Like that can be really bad if you're not if your child's not getting the nutrition so I can see a driver there. Can you give some more examples of why consumers would want to go to the trouble of tapping a product? And it seems so simple. It's so easy to do you have an Android phone, you tap, it's done. But the reality is, it's always challenging to get a consumer to do anything other than what they would do normally to consume a product, which is to open it and take it out. What are some of the things that you are doing? And how do you solve that problem of getting consumers to engage with the NFC tag.
Marcin Pilarz 15:44
There's always a discussion about about the specific use case. So it's why we establish, and we provide the service with with a marketing to have this call to action is access to the product, but there's always discussion about the incentive for the customer to do that. So for some group of clients, or some group of products, this is enough to give the confirmation that this is genuine products. So you have this kind of incentive in other in other products or products, you can check if this oil really fits to your engine. And the second option, you're like to collect loyalty points, people laughs, rewards last loyalty points, collecting all of these things. So once you can do that, through packaging, through the product without carrying with you another loyalty card, it's a great is a great incentive to do things like that. Another group of clients, you know, this is clients who is who prefer product like for vegetarian vision for who is buying only organic products. So you can have this possibility to to easy target product and check this view have green light to buy this product or it doesn't fit to your diet. So there is a there's a lot of incentive that we can provide for the customers and, and we can see that once you prepare the whole campaign in the right way, then it works really customer, this is not a huge require to take your smartphone and check this product to gather, again, this more information. And of course, on top of that, it's always fun for the customers to have fun using this, this technology using this product and have this connection because we we don't have fun just using technology. Of course, if you are a geek than you are, you have a lot of fun, a lot of fun just using NFC technology and things like that, or Bluetooth technology, whatever. But for the normal customer, this connectivity is something which gives you fun, if you will provide that in the right way. So this is our domain as well to make sure that we provide this fun for the customers.
Steve Statler 18:19
And I think it's really interesting. So part of this is kind of marketing strategy, you know, what's the value proposition, but also part of it is the creative that you surround it with. And your website's beautifully done. It's and I think that kind of signals that this creative aspect is important too. And you can have a great value proposition. But if people don't understand it, if the wordings not, right, if the imagery is kind of out of sync with the brand, then it's still not gonna work. It seems like you have a an incredible challenge because you've got you're really multidisciplinary, you've got to understand about antenna impedance, and you've got to understand about aesthetics, how do you cover such a broad set of things as a as a relatively young company
Marcin Pilarz 19:16
You know, this is this is our focus to really deliver this wide possibilities for for our clients and we always think about this value and we cannot talk about the technology. I will say that again because customer is not using technology, they use the user experience this is the key point and everything what you do needs to be very easy for the client. And there could be very difficult technology behind that. It's like with iPhone iPhone is really complicated inside and a lot of features a lot of Think about the for the customer is really easy to use that. It's why they win market today, it's why they selling so many iPhones on the on the market. So you need to think about how it will be easy for the customer. And we have in our company for this us women, as we start from this end to end solution, we have experts in our component in house, guys who is responsible for every single piece. So they are able to deliver this right value for every single smart part. And once we have a client, one is selling watches and different is selling solder. So the use cases are totally different. But thanks to this connectivity effects through these features, which we have, we can find that common ground for all of this implementation and just to fit it down for this specific product and for the specific use case.
Steve Statler 21:07
So let's just revisit that kind of chain of things that you have to do briefly if we can, but I think it's really each of them is interesting. Let's start off with embedding the chips in the product. You know, what have you learned about how to embed NFC into into bottles and jars and that sort of thing? And it's at the high level seems like you just buy a tag and you slap it under the label, and you're good to go. But I'm thinking it's probably a little more complicated than that.
Marcin Pilarz 21:40
Yes, yes, of course, this is not so easy. Once we talk with our biggest brands, or brands about the implementation. It's not only sticking, sticking, sticking and talk. And so there's a there's a great great story to show the example that we have a lot of followers today, we have a lot of competitors, small startups, they think that NFC technology is easy to implement, they buy a lot of tags from Alibaba or AliExpress. They buy tags, they add some software and stick on the product and they think that they can buy a tag which costs 20 cents, they add margin another 20 cents because of the development and they try to sell something like that just just tick tock on the product. But this is not the way that it could work. You know, this is a lot of this is really long a process implementation process. And a lot of things to do to fit the talk to produce this darker in the right way to have the right radio frequency signal just to make sure that everyone can read it from a distance. Once you have NFC tag with iPhone seven for example, customer needs to have reading this sounds like one age and you need to really fit this frequency to the to the to the to the right smartphones to the right product, you know, this is not so easy liquids inside the product for example, as you mentioned bottle of wine or jars, if you have liquids they interfere with radio frequency wave. So, so what kind of really frequency you should use. So, this is very complex process. Of course, we start with our clients with a decision about the specific campaign what is the needs what we need to solve then we decide are we which technology we use and how to fit it exactly to this specific product. So then we design on kind of the tag make a flip chip process. Now so come on in I know NASA bonding, so then then we deliver the full solution but this is not just a sticking of course you know the form of attacks us as a speaker because this is the common form but sometimes you have something which is called dry needling. So then you have just inlay without any adhesive and then then you need to combine in somehow with with a packaging. And what is what we do exactly we embed NFC technology inside the packaging during the production of a packaging Exactly. So this is that this is the different story. Because once you combine this traditional packaging with definite logic inside during packaging production, then your client probably doesn't have to care about the implementation of this technology just activated just to check if if technologists to revive the whole process. So there's a lot a lot of a lot of a lot of things to do. Also, a lot of improvement if they're in the process, you know, NFC RFID technology today, you can find it commonly in a payment cards in access card, Metro ticketing and all these things in some gaming. But nobody before us really made huge stamps on packaging industrial to use this technology inside of packaging. So the machines are very slow, or there's no machines. So we, during our development with we've made the two machines, just specific machines to adopt this technology to implement it very fast inside packaging, we made a lot of setups, we made a lot of implementations, I mean, the new designs of a machine some some some modifications of existing equipment to really make it happen. So it sounds very easy. But in real life, this is really difficult to maintain.
Steve Statler 26:06
How do you solve the problem of fitting in with a brand's well established packaging process? So they, you know, they're making. They've spent years figuring out how to get the right box with the right color and graphics and that sort of thing. And then you come along and say, Hey, let's put an NFC tag in it. Presumably they're not going to switch out the box production to to a provider that you like you have to work with? Do you have to work with the company that they're already working with? Or do brands switch? Is NFC a catalyst to say, hey, no, these guys are old school, and they'll never adapt to this new technology? How does that? How does that work out?
Marcin Pilarz 26:58
And basically, I love this question, because this is, this is exactly what we do what we do every day. I mean, this is a very long process, how to do that. I mean, once we once we get the real product, as you mentioned, for example, they produce that since 10 years, making just small, small, small, small improvements every year to have it better to have a cheaper to have it to have a better efficiency and all these things and then guys coming and they would like to put some technology inside. So do you have a lot of questions about the recycling of the eggs and and all of these things around? And, and yes, we solve this, we solve this, this a lot of issues. And we have great experience about that. And how we do that, of course, we go very deeply inside the process of overproduction of every single product and we are looking for some gaps and where we can find this possibility to put the technology inside and how we can do that. It's why I told you in the very beginning that we make a design of a tag which fits exactly to specific product to specific packaging, just to find this gap where we can put the NFC tag there just to make sure that we are not changing too many things in this existing existing process. So, so this is this is this is our everyday feeling what we do and and our cases to find this possible it is to implement that of course, sometimes there is no possibility to to implement that without some changes, but mainly this is small, really small changes inside the process or inside of production, we are always trying to find the possibility to show that the return on investment in this technology will be much higher than effort which they need to put to change something in this process.
Steve Statler 29:14
And so do you find yourself retrofitting adding a sticker on top of the existing packaging? Or do you find yourself building the tag actually into the packaging and kind of piggybacking on the existing production process, which which is the predominant way of solving this problem?
Marcin Pilarz 29:38
Of course, the second, second option.
Steve Statler 29:41
Okay. All right. So, this has been really fascinating. We should we could talk for an hour at many hours more about this, but let's just wrap up with one last topic, which is the data so you have we've talked a lot about getting the tags onto the packaging and And the creative around getting people to engage? And why they would do that. But what what kind of data are brands hungry for and what what have you been able to deliver them through your platform because that's part of what you do, isn't it, there's a dashboard and you deliver data?
Marcin Pilarz 30:19
Yes, so, we collect all of this information, which we can collect about the product, I mean, for us, every single product is unique, this is very important thing. And this is where everything really start. And what we do then, we assign some attributes for every single product every single unit product. So, once you have signed expiration day, once we assigned a batch number, once we assign other production attributes, then you have a user who is who uses a smartphone. So we know that the customer is also unique. So once you have unique product and unique customer, then you will make this, this this, this this match. And offense based on that we collect the information that we know that there is a Steve in San Diego, who who whose scan one product, second and third product. So of course, we save the information when you when you when you do that, what kind of product from which bus service, we know how often you use your smartphone for this kind of activities, we know where you are using your smartphone. Of course, of course, if you give us a location data, we know if you open the product or not. So this is very important thing as well. Because once you have, for example, just a QR code, you know that somebody just have a product and he maybe he was interested in the product, maybe he was interested in a cubicle, but we have three ways of communication with with with with between the client and the product first is just a simple tap that we know that somebody was interested in the product, then we measure interaction with a product. So customer rated, give a comment, share it on social media or something like that. And third, a very valuable option is that once you open a product, we can detect that and then this is really great information for every single brand owner that you know that somebody bought this product, so you'll know exactly that this is your customer and you know how often he he buys this product. So this is that this is the data which we which we collect. And you can imagine how big this data is today, and how how many information you can collect and how you can use them for marketing activities. Logistic activities for great market activities, prevention, to protect your products against partial distributions and all of this, all of this, this kind of activity. So this is this is data which we collect. Of course, there is a lot of details, but probably will not finish between them before midnight today, so so there's a lot of things to to discuss. But overall this is this kind of this kind of that.
Steve Statler 33:29
But this is really a revolutionary concept, isn't it because traditionally brands created the product and they handed it off to a third party and then they had no idea who was buying it and how they were using it and so forth. So there must be a lot of excitement within the brands that they're suddenly finding out who their customers are. Do you see that?
Marcin Pilarz 33:49
Yep, yes, definitely we can see this next time excitement and our clients really love this. This idea it's why we have so many clients today big brands whose really think about the revolution and really consider our technology as a revolution Inside Day Management inside the way how they treat the products how they organizing every single step of production, then distribution download all of this logistic activities installed communication with the client. Then in house communication with the client, even some clients are considered to use our technology also for the last recycling issues. So you can see this whole cycle how it can change the way brands thinks about the product and they can see how technology will is is really can change the the products.
Steve Statler 34:56
How excited all people In May, in monetary terms, there's $1 figure on this isn't there because you're taking something packaging, which the science was all about how to squeeze another half a penny, out of the cost of production, and you're suddenly bringing in all this extra cost, it seems to me that this is almost got to be seen at the CEO level, it's gonna, you know, are we in the business of, of shipping? T shirts? Or are we in the business of kind of connecting directly with our customers? Who do you see driving this? And, you know, what are your thoughts about? How do you qualify a client? You know, if someone just says, Hey, I'm from the packaging department, we thought it'd be kind of cool to have NFC in there. What's, how do you deal with that, and to, and how many of your customers are really tackling this at the top level in their companies?
Marcin Pilarz 36:01
Most of our clients really, really treat this technology as a top top innovation that they can implement inside this products thanks to the the possibilities of changing the way they communicate with in b2b and b2c. So there's a lot of Delos a lot of clients that consider that as, as a as a real future. In some of them, we are in the first place in innovation. And this clients really, and as you mentioned, they really, sometimes it's really CEO level to make the decision. But CEO needs to have return on investment. And once we talk with a packaging team, of course, everyone tried to squeeze and find a savings on this song is packaging. But once you have wants to show always wants to show return on investment, then then, then you can add even couple of cents to every single product, because you will earn more or you'll find more savings because we always talk about the two paths to find the return on investment in our solution. First is to find a savings inside inside existing processes, which is easy to calculate once we start discussion about specific implementation. And the second is increase of a sales. So this is also a way to find the return on investment. It's not so easy to really calculate what will be real response from the market before you make a pilot implementation or first implementation to calculate how many how much you will earn how how you will grow your revenues if before that, but it's always about the return on investment to find to find this possibility to implement this technology inside inside this product.
Steve Statler 38:07
While I was expecting you to talk about increasing sales, but to be honest, I'm kind of surprised that there are opportunities to save money, how can you save money by putting smart packaging in place?
Marcin Pilarz 38:18
You can find savings in some other areas down smart, just smart packaging. It's not smart, it's not packaging itself or you can find a savings but you can find savings. In logistic distribution, you can find some salary savings seen, for example, where you are losing a lot of money on a gray market activities. So this is this place. This place is where you can find this or the savings we've built for example for one of our clients special device which can recognize every single product so thanks to that they have stock monitoring, having sold more than going you are not driving to every single store to check if it is still full or not. You just go and refill only this. This products only go to the to the to the store where the this this specific machine is empty. So you have savings on this on this, this kind of activities as well.
Steve Statler 39:28
Wonderful. Well, I think we've covered a lot. We've talked about the technology. We've talked about the business margin, thank you so much. You are a real pioneer in this space. I wish you the best of luck and I look forward to keeping in touch with you as this as this area explodes, which I think it's going to.
Marcin Pilarz 39:45
Yeah, thank you very much. Thank you for the invitation and Happy New Year.
The Mr. Beacon podcast is sponsored by Wiliot, scaling IoT with battery free Bluetooth.