Tokinomo, the in-store marketing robot, has a very unique story. In this podcast, Ionut Vlad, Tokinomo’s CEO talks to Florin Rosoga about how the robotic POP display was invented and how it grew over the years.
In this article, you will find out more about:
- What is Tokinomo
- How Tokinomo was invented
- How the robot managed to attract attention
- The next steps for Tokinomo
Florin Rosoga: Listen to inspiring entrepreneurs. We bring together every week entrepreneurs, top athletes, sought-after trainers, business owners, and young entrepreneurs starting out. Hi everyone! Florin Rosoga at the microphone. Well, I'll find you all on a new podcast where we'll be chatting with a co-founder and CEO of a very interesting start-up, namely Ionuț Vlad. Ionuț is the co-founder and CEO of Tokinomo. What is Tokinomo?
It is a start-up that has developed a solution to promote products on supermarket shelves, namely by placing robots on the shelves. These robots allow interaction between consumers. The robots allow consumers to interact with the products on the shelves through movement, sound, and light. They aim to work with supermarkets and the retail area and help them to better promote their products, and they're doing very well at the moment, they're expanded, they have activities and action in many locations and we're going to learn more about that.
Where they are now, how they started, and the whole Tokinomo story. Ionuț, thank you so much for accepting the invitation to be on this podcast. It's a real pleasure to have you.
Ionut Vlad: Thank you, Florin, for the invitation and greetings to you and your listeners!
Florin Rosoga: What are you doing? How are you? How are things going with you guys these days?
Ionut Vlad: We've started the fall harvest, so to speak. It's a pretty busy time for us because there's a lot of promotion going on. There's a certain seasonality to what we do. It's in the springtime when it's around Easter and now.
Florin Rosoga: It's the beginning of autumn and winter.
Ionut Vlad: But also a very busy time. But we're glad things seem to be. Despite global uncertainties, they're still trending positively.
Florin Rosoga: Okay, let's start first of all by saying what Tokinomo is and what you're doing now. I said you create robots, but describe yourself because you can do it much better than I could.
Ionut Vlad: It remains to be seen. Tokinomo aims to revolutionize the in-store marketing area and bring new, more effective ways of interacting with shoppers, while at the same time collecting data to help consumer goods brands and retailers in particular analyze and optimize both their communication and all aspects of product placement.
What is Tokinomo?
Florin Rosoga: Basically, what are these robots? Because they're not actually humanoid-shaped robots with arms, and legs like we have. If I understand correctly, they're placed on the shelf.
Ionut Vlad: They're not humanoid robots. We just started with this product which is like a hidden robot. He doesn't necessarily have to be seen, he's behind the products and he helps the product itself. In fact, the robot itself doesn't even necessarily have a role. Like in theatre, Tokinomo is not the main actor, the main actor remains the product. Why is he the stage of the product? We just help him so that the product has a much better stage presence and interacts with the buyer in a way in a pleasant way, in a way where he actually manages to have a conversation with the buyer.
Florin Rosoga: Okay and how? Let's start at the beginning, let's say Tokinomo started it. How did you come up with this idea?
How was Tokinomo invented?
Ionut Vlad: The idea came to me when I was working for a duty-free retailer. My job was to help certain products promote themselves better. And actually, I was in charge of everything from packaging to the whole product concept. And success was obviously measured by sales.
How well did those products sell? And having access to sales, in quasi-real time. I wasn't at first intrigued by sales that didn't seem to follow any particular logic and seemed somewhat random results, influenced by unknown factors. So I went into the actual store and spent many dozens of hours trying to actually understand what was going on. I drew some conclusions, particularly in the area of product visibility, and realized that this factor is probably the most important in influencing the purchase decision.
Beyond price, branding, packaging, and consumer perception, because if people simply don't see the product then. No, that product has no chance of being bought by the buyer. And I thought okay, what can we do to increase that product visibility? There are other traditional solutions, but somehow they don't work so well.
Ionut Vlad: Following, at least in my experience, I've tried from promoters to all sorts of other cardboard materials and they had a certain, I mean you could see certain improvements, but they weren't very good, they weren't controllable, they weren't measurable and they weren't that effective. And that's when I came up with this idea. Yes, it still seems like an untapped opportunity and that was represented by the product itself.
What would it be like to use the product itself? Most of the solutions so far were other things that tried to help the product be more visible. From colored cardboard materials to people who were enticing you to taste or try the product, various TV screens, radio, and all sorts of other adjacent things, which until now in a way hindered. Visibility, because it's very hard to stand out when everyone else is trying the same thing. The basic idea was “Why didn't we use the product itself and give ourselves the opportunity?” How do we make the physical product have its own voice, and be able to move, and interact directly with the buyer? And that was kind of the starting point.
Florin Rosoga: And basically, you developed these little robots that somehow proposed at that time to help you on the promotion side of those products. Basically, it was something that you wanted to do for the project the company you were working on, but after that, you went separately as a standalone project.
Ionut Vlad: Yes, I realized that the opportunity is actually much bigger. And because I had these dreams, and ambitions of doing something on my own. Why did I have this entrepreneurial bug in my blood? And I wasn't working full-time for the company anyway, I mean it wasn't a work invention, so to speak. And it was just an idea at first. I didn't even know exactly if it would work or not. Anyway, we did enough to test it. I mean, we've already started some things to see if it's something on its own or not.
Afterward, we first tried to collaborate with some companies that were in this area of electronics and mechanics. After that, I realized that it's best to be in control and do something nice with your own hand. It's better. And I was lucky that I had some friends
who had the skills to help me make an early prototype. And with that prototype, we went to some clients. We thought potential customers and we saw that it really is. And slowly we thought that maybe it would be a business idea in itself. But this was a process that took time and it didn't get right overnight. There were key moments when we really decided to start something in earnest, which was to resign and do something on our own. The moment we got accepted to an accelerator, we applied to an accelerator in the United States and that was the point where it was basically a decision to make we decided to go to the accelerator and pursue our dream, so to speak.
Florin Rosoga: Explaining a little bit which was first. The first product? The first robot. What did it mean specifically? Because people were listening to this podcast, but not having pictures, being something, let's say audio, maybe not in the center of everything, but specifically concrete. It was the first robot that you started a robot with.
Ionut Vlad: It was kind of ridiculous, it was kind of a semi-functional toy. Made out of cardboard and all sorts of lego parts and mechanic parts and motors of this stuff found on who knows where. Let's see if the concept can be implemented. After that followed a somewhat more prototype. Advanced, but that wasn't great either. It was made of wood this time.
Florin Rosoga: And sorry for asking, Ionut what shape was it? I mean did it look like you can describe it a little bit?
Ionut Vlad: It was ugly, almost couldn't show it. I mean it was more of a concept-level presence and it didn't really work. I mean it was working with one product. The current robot can accommodate absolutely any kind of product you find in the supermarket, except for very large products like refrigerators, TVs, and so on. Any good, any product you'd normally find on the shelf. Our POS is so versatile that you can use it, and put it on the product, so potentially talking thousands of products.
Florin Rosoga: What does the robot look like right now? Is it in the form of an arm that's basically mounted on the shelf or how?
Ionut Vlad: It's all a little box because we have to have it. There's a lot more to do with, well, buyer safety, the fact that there doesn't have to be a lot of things that could get it. I know, a crash, and then it's all boxed in a pretty small little box that you put on the shelf behind the products, and the product is attached to this little robot. The moment it's attached, the little robot is programmed. With whatever kind of movement you want. The product basically moves and talks, and at the same time, it lights up. The programming sequences can be multiple. It also depends on the creativity of the brand or agency the brand is working with. We basically have developed another, specially designed media space for this part of the store shelf.
A media space that has never been there before and makes it available to both brands and marketing agencies that want to promote their products. So it's not the ads themselves, but the TV.
Florin Rosoga: Basically, I'm thinking that brands, when they use them, do a series of tests. There are some numbers that they look at, they can check how effective it is.
Ionut Vlad: Best practices say that you need to do A/B testing. In reality, it depends on the agency. Some do these tests while others don’t. We have this possibility, it's up to them.
From prototype to global partnerships
Florin Rosoga: Now, going back to that time that you said you had the robot, initially that arm that worked didn't work as it was, it was at the stage of, let's say, MVP, basically minimum viable product and you came up with this product. How did you move forward? How did it evolve? Because I think there were still changes of direction and so on. Until you got to the current product and you had the company at this point.
Ionut Vlad: Yes, there have been many. The basic concept was kept because we realized it was a good concept. A lot of work was done on the technical side.
Florin Rosoga: Yes.
Ionut Vlad: And there really have been a number of iterations here. We've been somewhat fortunate that we've implemented some campaigns with those prototypes and we've figured out the problems, and what needs to be improved. By the time we decided that were ready to work on the commercial product, the final product, we already had enough experience, I would say from testing with the prototypes. And that helped us a lot.
How did we, how did we decide? There were two important moments. One was with the prototype that was kind of advanced and I mean that looked kind of good. I had two prototypes, I went with them to a potential client. And he asked for a campaign in 30-something stores and we weren't going to be ready in two weeks. And no, we only had the two that we were holding, I mean we made them. It was just really hard. Basically, for two weeks we didn't sleep, we didn't eat and we worked like crazy in a garage somewhere. Just like in the start-up books.
Then, at some point, I got a text from a company in the UK. They'd seen a video somewhere following a pilot made by us and they were coming to Romania to meet us. I showed them the prototype, pretty much what we wanted. We were already thinking of making a product, a commercial product, and I placed an order for 500 robots. And they paid for them. And we were obligated. I mean that was the moment that basically forced us, to become a company, to have our own office, and start working towards a commercial product, let's say.
Florin Rosoga: You have secured funding for the project and for the business. Because okay, in the initial phase, when you had that wooden robot, lego pieces, and so on, maybe the costs were a little bit lower, but after that, especially when you got into the production and development and sales and so on, there were already a number of bigger costs.
Ionut Vlad: In the beginning, it was bootstrapping, so with our own funds we were able to cover the initial research part, and then this order came from this company in England. Basically, this was a capital infusion because we told them we didn't have the money to do it. Of course, I expressed this concern in more indirect terms. They also agreed to somehow sponsor this production and with these I suspect, we started the company basically. I mean they were enough to complete the research part of it, we hired the first two or three people and we produced robots.
Florin Rosoga: After that, you basically funded yourself from sales.
Ionut Vlad: At that point, we were also talking to some angel investors in Romania. Basically, around the same time, I was working on the robots and working on the first round of funding.
Florin Rosoga: Well, have you got funding, have you had several rounds so far?
Ionut Vlad: We had three rounds.
Florin Rosoga: Okay, and as a business model, what is your business model?
Ionut Vlad: We don't sell the robots, we have a system, we call it hardware as a service. I mean we give the robots in custody and I can say we have a platform where they're managed and everything is monitored and set from there. And basically, the robots are permanently ours, we give them for use. We don't sell robots. We sell campaign days. We don't sell hard drives per se.
Florin Rosoga: You sell promotion service with this robot tool, essentially. These are remotely controllable, right?
Ionut Vlad: Yes, the robots have WiFi, Bluetooth, and a cellular display.
Florin Rosoga: Basically the client is requesting a campaign from you. I'm thinking that you're providing the installation of that robot.
Ionut Vlad: We have a network of partners in many countries and they have robots in custody and every time an end customer wants, those robots are installed by the partners.
Florin Rosoga: But also maintenance ensures that, for example, the client wants to make changes to campaigns or stuff. These can also be done through the platform.
Ionut Vlad: Yes, of course.
Florin Rosoga: You can control the sales side remotely. How was it for you? Okay, you had that one customer in the UK if I understand initially, then the second one that ordered 500 robots. That one was also from the UK.
Ionut Vlad: The customer from the UK was the one that ordered the 500 robots. We identified a type of customer that we hadn't originally considered. At first, we thought that the customer is the brand, which is the consumer goods company. And we weren't very clear about our road to market.
The response from the market came naturally. In general, that's pretty much what happens. Also during that period, we made a website that we somehow put together. It was good enough for that time.
And I don't even know exactly how, because we weren't investing in marketing at all. In the beginning, there were some requests coming in by email. They probably saw our website or some videos on the internet, on LinkedIn. I don't know exactly how and they told us that they wanted to be our distributors in various countries like Italy or Saudi Arabia.
I didn't understand what that meant, or what that would entail. We weren't very aware of that stuff and we realized that actually, that's the most plausible strategy for us because it's very hard to serve an international network of customers without having a physical presence there, and having a physical presence there gives you some costs and a level of organization that we weren't ready for at the time.
And that's when I realized we had to build a business model around these partners. We identified them as in-store marketing agencies that already sell various in-store services for these customers or for retailers and they're interested in differentiating themselves from their competitors, offering a better product to their customers, and then they were directly interested in becoming a kind of reseller, partnering with Tokinomo.
Florin Rosoga: And you've basically created partnerships with them.
Ionut Vlad: That's exactly what our main go-to-market is still. Except we also have direct relationships with both retailers and brands, but without these partners, we wouldn't be able to be as extensive internationally.
What’s next for Tokinomo?
Florin Rosoga: But plus you can grow faster because of them without making major investments. In the sense that you open offices all over the place in a yes and no way. You don't necessarily need an army of salespeople, so to speak. You simplify a lot so that you can focus on the things that you're doing really well right now. Ionuț, one last question, what are your plans for the future? What do you have in mind for the future?
Ionut Vlad: We want to strengthen our international presence, both with our existing product, but also with the other products we have in the pipeline and we're even going to launch some very interesting products in the area starting this year.
We are also launching a completely new product, we are also launching an add-on for the current robot in the data collection area. Which is the very advanced kind that offers some unique insights into the market.
We want to become the leading player in marketing, in-store marketing, or trade marketing in the world. But obviously, we have to take it step by step and we believe that this combination of effective and innovative marketing, together with some data is really very valuable and can’t be found elsewhere. I think it's a very interesting combination and one that will really allow us to get where we want to go.
Florin Rosoga: Can you tell us a little bit more about the products you want to launch?
Ionut Vlad: I can say a few things. We're launching something in the area of anonymous data collection. So we're not talking about personal data collection. In the area of demographic analysis and consumer shelf presence. What would their behavior be and what could brands do to optimize their shelf presence and know their conversion rate? For example, how much time people actually spend, what products they look at, whether they look at their product or the competitor's product, and things that indicate information that they don't currently have or have at a very high cost. This would be the first product. There are other products, but I prefer not to offer more details because they are still in various stages of development. We don't want to release them publicly at the moment, but at some point, we will release them publicly.
Florin Rosoga: I completely understand. Ionuț, thank you very much for the talk. It was a very interesting discussion. In fact. I'm really curious about the direction you're going to take and I'm issuing an invitation right now so that at some point in the future, maybe in a few years, we can continue this discussion and see what you've done in the meantime. Once again, thank you for the discussion! It was a real pleasure to talk to you.
Ionut Vlad: Thank you very much. My pleasure as well, and greetings to everyone listening!