Innovations in Physical Retailing during COVID-19

Igor Pavelek, COO at Pygmalios tells us about customer data analytics for physical retail.

First of all, how are you and your family doing in these COVID-19 times? 

Igor Pavelek: Well, that’s a great question since I’m currently sitting in a maternity hospital waiting for my wife. So I would say we are doing just fine. After a year of pandemic, my personal life changed dramatically how we work and organize, and it looks like we are not done yet.

With regards to our business, we faced a challenging year (as probably any business in the world) that required us to change a couple of angles on how and where we execute our mission. Our customer base consists mainly of retailers running physical stores – a big part of this sector was hit hard by the crisis. They were forced to close their stores. However, retailers in the so-called essential segment remained open. And those were in a greater need for our services than ever before.

Tell us about you, your career, and how you founded Pygmalios.

Igor Pavelek: Pygmalios was established in 2014 by three founders with various backgrounds (IT, marketing, and sales). The initial idea was to bring the analytics we all know from eCommerce into brick and mortar stores by leveraging the newest IoT technologies. The idea won an Entrepreneurial Idea of the Year award in our home country (Slovakia), which got us going. Since then, there have been 5 long since then. We have grown from a local startup to a company that serves tens of enterprise customers across the whole of Europe, analyzes millions of shopping sessions per month, and provides intelligent in-store optimization services beyond analytics.

How does Pygmalios innovate? 

Igor Pavelek: The whole concept of data-driven brick-and-mortar stores or automated store has innovation in its DNA. First of all, there is a huge gap between how eCommerce retailers run their business and how traditional retailers operate. As they compete for the same customer base, there’s plenty of space for optimization on the side of traditional retail. Just imagine how much data is collected on customers’ behaviour browsing an eCommerce site and how big leverage this creates when fed back into the management process. Now, look at a traditional brick-and-mortar store. There’s nothing like that going on there. All the data that could be captured and used disappear into thin air. Many traditional retailers just fly blind. They don’t even know the true opportunity they deal with as they have no idea about how many visitors they really deal with. We try to fix it.

If you ask about how we innovate as a company, we’re very agile and close to our customers. That’s why we were able to react swiftly when the crisis hit in the past year. We had to think very creatively about how we would serve our clients in the new situation. I must proudly say that we have come up with solutions that we managed to execute and successfully implement on a large scale. I’m talking about our Occupancy Management solution, which addresses the pain that is still very prevalent — keeping shoppers at a distance so that stores are safe and retailers don’t face fines imposed by the government.

How does the coronavirus pandemic affect your business finances?

Igor Pavelek: As already mentioned, the pandemic hit us since our core business focuses on brick and mortar retail stores. Like many other startups, we didn’t have piles of cash piled up in a vault. A year ago, within a few months, all the stores were closed except the essentials like supermarkets or pharmacies. For those who did not close their stores, the coronavirus pandemic changed their priorities from how to make their stores more effective to how to make them a safer place. For some of them, the priority was just to survive. We had some projects postponed, and some of our clients closed their businesses. On the other hand, thanks to our core competency, which is R&D and swift reaction, we were able to attract new customers that saw value in our new products. All in all, we did fairly well compared to some other sectors.

Did you have to make difficult choices regarding human resources, and what are the lessons learned?

Igor Pavelek: We had a few difficult moments last year regarding this. I’m quite proud that we were able to navigate through this without any losses. I’m also happy to say this as I work with some of the most talented people I have ever met. Having great people around when facing a crisis is a great asset itself. Historically, we have managed to develop a culture that embraces open dialogue and camaraderie. This helps a lot when it comes to crossing bumpy roads. Of course, we did some measures such as downsizing our offices (as we basically switched to an almost complete remote mode). Also, we did a bit more bespoke development for our clients within the past year, which helped us partially compensate for the losses from the SaaS part of the business. Having great investors that are ready to cover your back when in unforeseen trouble is also great.

How did your customer relationship management evolve? Do you use any specific tools to be efficient?

Igor Pavelek: We were quite digital even before the break out of the virus. However, these days, 99% of all the communication with the customers or the team is now done via video chats. There are virtually no in-person meetings taking place. With regards to customers, we see this as an opportunity. Physical availability is much more costly than virtual. If having no physical presence could be perceived as a disadvantage, nowadays it doesn’t matter anymore (as everyone is remote, anyways). Also, not wasting time and other resources on travelling and at the same having meetings in several geographical territories on the same day is a great thing if you think about it.

Did you benefit from any government grants, and did that help keep your business afloat?

Igor Pavelek: No, we didn’t receive any grant from the government. Government support for companies such as ours was virtually non-existent.

Final thoughts?

Igor Pavelek: From our business’s point of view, 2020 was a hard but not a bad year. We have learned a lot and forged ourselves into being more resilient than ever before. I’m an optimist and believe this year will bring much more light into our lives.

Your website?

https://pygmalios.com