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The Innovation Table | Nick Larkins on Transforming Retail Media Networks through AI-Audio Tech and Pricing

By February 1, 2024February 8th, 2024No Comments
The Innovation Table | Nick Larkins on Transforming RetailMedia Networks through AI-Audio Tech and Pricing
The Innovation Table | Nick Larkins on Transforming RetailMedia Networks through AI-Audio Tech and Pricing

Nick Larkins currently serves as the Co-founder & Chief Product Officer at Qsic.  

Nick, along with his partner Matt Elsley, co-founded their first company, Easy Control, where they specialized in simplifying the complexity of home and business automation. Their expertise involved integrating various systems, such as audio, video, security, and HVAC, into a unified, user-friendly platform, ensuring seamless operation and control for clients.  

Nick’s roots trace back to a country town two hours north of Melbourne, Victoria, called Shepparton, where he spent his formative years. Currently, Orange County, California, is where Nick Larkins calls home. 

A Q&A conversation between Engage3’s CEO, Edris Bemanian and Qsic Founder and CPO, Nick Larkins regarding the recent announcement of a new exciting partnership.

Edris Bemanian: What is Qsic? How did the team get started?  

Nick Larkins: Qsic originated as an offshoot of another venture, Easy Control, which I co-founded with Matt in the late 2000s. Our time at Easy Control opened our eyes to the outdated methods businesses used for music management. Companies were spending a significant amount of money every month just to receive updated music CDs. As music streaming began to rise, we started replacing these obsolete systems for our clients, who were thrilled with the change. However, we soon faced legal challenges as consumer streaming services weren’t authorized for commercial use. Unable to find a licensed alternative, we naively decided to build one. We approached record labels for licensing assistance and eventually built our own solution. Timing was everything and we entered the market the same year Spotify launched into Australia, in turn seeing huge amounts of interest and demand for Qsic. Due to the demand, we eventually decided to shut down Easy Control and focus purely on Qsic. 

EB: Your story is a great case study for the importance of never giving up and keeping your eyes open for new opportunities. Love the entrepreneurial spirit you and Matt showed through that experience. And now Qsic is growing, working with a number of large brands across the world, and innovating. Congratulations on making tough but necessary and ultimately fruitful decisions.  

NL: Thanks Ed, appreciate it. 

EB: So, what problems does Qsic solve today and what types of customers do you have?  

NL: Qsic revolutionizes in-store audio, transforming it from a mere business utility with associated costs into a powerful revenue generator through our AI-powered advertising platform. This platform enables retailers to boost in-store sales and generate retail media revenue. In fact, on average, we observe a 15% increase in sales of advertised goods. Our clientele spans various sectors, including grocery and convenience stores as well as quick-service restaurants. As a comprehensive audio solution provider, we not only design but also procure and install advanced audio infrastructure. This approach allows for significant automation of the in-store audio experience, eliminating the need for store-level intervention. Our system is particularly advantageous for large-scale retailers seeking consistency and efficiency across their network. 

EB: Great description. Can you give a product-level example to bring this even further to life? What does a campaign for one of your Brand-Retailer SKU’s look like? 

NL: Absolutely, Recently, we implemented a campaign focused on co-buys of food items with soft drinks in various retail locations. This promotion was strategically priced according to the geographic area. The results were outstanding, demonstrating the effectiveness of our targeted approach. In certain locations, we observed over a 20% sales uplift for these bundled items. This success highlights how Qsic’s AI-driven system can not only identify the ideal product pairings but also determine the most effective pricing strategy depending on the store’s location. It’s a clear testament to how our technology adapts to regional markets, driving significant sales increases. 

“Based on our work with a leading international retailer, we learned that price point is one of the biggest factors in determining a campaign’s success, so we’ve got to get that right and capitalize across all the platforms in which pricing decisions are being made to achieve this.”

EB: Could you share examples of how your technology has helped your customers overcome specific industry challenges?  

NL: Absolutely, our audio technology has significantly impacted the retail sector by first and foremost creating high-margin advertising revenue. By using our in-store audio for targeted ads, retailers have opened profitable advertising channels, offering airtime to their CPG brands. This strategy has not only improved advertising margins but also strengthened vendor partnerships. 

Additionally, our technology has played a key role in significantly boosting loyalty program enrollments and mobile app downloads. By leveraging in-store audio ads for these promotions, we’ve seen a marked increase in customer engagement and retention. Alongside this, the improved in-store atmosphere, fostered by our tailored audio solutions, has positively influenced staff sentiment. This enhancement in the working environment not only makes for a more enjoyable atmosphere but also translates into better customer service, benefiting both customers and employees. 

In essence, our approach is transforming retailers by driving both advertising revenue and customer loyalty, while also enriching the shopping and working experience. 

EB: Why is the Qsic-Engage3 partnership a no-brainer for you?  

NL: Our recent partnership between Engage3 and QSIC marks a significant step forward in retail technology. By combining our strengths, we’re offering more value than we could individually, especially in the critical area of pricing strategy. Pricing is a key factor in the success of marketing campaigns, and our collaboration aims to refine this across platforms. According to NielsenIQ, about 73% of trade funds fail to yield positive ROI. However, our integrated approach, combining Qsic’s AI tools with Engage3’s pricing data, enables us to create targeted, efficient, and localized campaigns without sacrificing profitability. 

Our system helps retailers maintain competitive pricing not just during promotions, but also in their everyday pricing strategies. We achieve this through Engage3’s Price Image Management Suite combined with QSIC’s AI technology, which allows for real-time testing and adjustment of audio promotions, closely tied with effective pricing recommendations. This is not just a business strategy; it’s a proven approach that enhances retail campaigns, offering our clients a significant competitive advantage in the market. 

EB: Why does 1 + 1 > 2 between Engage3 and QSIC?  

NL: Based on our work with a leading international retailer, we learned that price point is one of the biggest factors in determining a campaign’s success, so we’ve got to get that right and capitalize across all the platforms in which pricing decisions are being made to achieve this. 

EB: No better example than one rooted in reality! The partnership really clicked for me when I saw the first promotions get generated dynamically by your AI Audio Platform using contextualized data from Engage3. That definitely makes 1 + 1 > 2. What I think gets us to 1 + 1 = 3 is having our Price Image Management Suite actually set the optimized price for your promotions using our full Price Image optimization capabilities, which is the next step for our partnership.  

NL: I couldn’t agree more!  

EB: “We all know pricing is the most powerful lever on the P&L but in most cases, campaigns either deliver relevant promotions or profitable promotions. They rarely can achieve both at the same time. That’s why solutions like Qsic and integrations like the one we’ve created are so critical.  

We address speed and scale: within seconds, we generate countless campaigns that are targeted, customizable, configurable and localized using Engage3 product and pricing data.  

We address relevancy: make sure your promotions are competitive without giving away unnecessary margin. Promotions need to be sustainable to be a win-win.  

NL: Great points. Another is making sure you get credit where you’re already delivering great value: communicate your value proposition to your customers using contextualized messages from the combination of Qsic and Engage3.  

For example, if your products are priced 10% lower than the market, you can communicate that and get credit for it.  

EB: How about measurement?  

NL: Again, great point. With our partnership, we can enable dynamic, localized, and large-scaled A/B testing to get an immediate feedback loop on which promotions are driving responses with incredible granularity.  

EB: What major shifts or trends do you foresee in the retail technology sector over the next few years? 

NL: The next few years will see transformative changes in retail technology, with a particular focus on brick-and-mortar stores. These trends include: 

  • Enhanced Store Automation: Embracing technologies like electronic shelf labels and automated inventory systems will streamline store operations, making them more efficient and reducing manual labor. 
  • Emergence of Audio and Screen Technologies in Retail Media: Audio and screen technologies will become integral to retail media. This includes in-store audio platforms for music and targeted audio advertising, along with digital screens for dynamic visual promotions. These tools will be used not only for enhancing the ambiance but also for delivering personalized marketing messages and promotions. 
  • Seamless Online-Offline Experience: Integrating online data with physical store experiences will be key. This includes leveraging customer insights from online interactions to inform in-store product placements and promotions. 
  • Data-Driven Retailing: Retailers will increasingly use data analytics to make informed decisions about customer preferences, inventory management, and personalized marketing strategies. 

EB: How has technology transformed the retail landscape, and what emerging technologies do you believe will have the most significant impact? 

NL: In my experience in the retail sector, technology has fundamentally transformed operations and the way retailers now can understand their customers. Embracing things like AI and machine learning to efficiently analyze data, automating processes from inventory to logistics. This has enabled retailers to swiftly adapt to market trends and better meet customer needs. 

More importantly, technology has deepened insights into consumer behavior. This isn’t just about collecting data; it’s about gaining actionable insights to create personalized customer experiences. Additionally, retailers have focused on reducing friction in the shopping journey, making it simpler and more enjoyable for customers to shop and discover products through platforms like e-commerce sites and mobile apps. 

Looking ahead, I see the integration of online and offline retail and the continued advancement of AI and data analytics as key to further enhancing customer experiences and operational efficiency. Ultimately, technology in retail is about reimagining our connection with customers and streamlining operations, striving for an integrated, intuitive, and customer-centric experience. 

EB: What innovative technologies or solutions is your company focusing on to revolutionize the retail experience? 

NL: At Qsic, our goal is to demonstrate the value of audio in enhancing retail experiences for top businesses and brands. We focus on improving customer experiences and converting these into revenue streams. Our approach begins in-store with smart audio infrastructure. This includes speakers and sensors that automatically adjust to environmental changes, like background noise levels, altering volume and content for optimal impact. 

Additionally, our platform utilizes our customers’ first-party data, primarily from POS systems, to optimize and automate ad campaigns across a wide store network. This strategy minimizes waste by ensuring ads are played at the most effective times. We then assess these campaigns’ impact, allowing us to continually refine and improve the success of our campaigns. Essentially, Qsic is redefining retail engagement through cutting-edge audio technology. 

EB: Can you discuss any recent technological advancements or developments your company has introduced to enhance retail operations or customer engagement? 

NL: Absolutely, we’ve recently embraced the AI revolution at our company, using it to address both customer and internal challenges. One notable example is in handling the complexities of running price point campaigns across a vast network of stores in various states. Pricing in retail can be intricate, as the price point often varies from store to store. This variation previously meant creating hundreds of different content pieces for a single campaign, which was not cost-effective for price point promotions. Yet, we know these promotions tend to be more successful than those without a specific price point. 

Pricing in retail can be intricate, as the price point often varies from store to store.

Thanks to advancements in AI, we now have the capability to dynamically create content in real-time. This development is powered by our customers’ first-party data, allowing us to accurately determine and target the appropriate price point for each store. This technological leap has been a game changer, making the process much more straightforward and effective. Our clients and their CPG partners are extremely excited about this. 

Additionally, AI enables us to make our creative content more contextual and personalized, significantly boosting customer engagement and the overall impact of our campaigns. This is a thrilling advancement for us, as it opens new possibilities in how we approach retail operations and customer engagement. 

EB: What are some of the biggest challenges retailers face in adopting new technologies, and how is your company addressing these challenges? 

NL: One of the biggest challenges retailers face when adopting new technologies is the complexity of digitizing their physical stores. This process often involves multiple departments and stakeholders, each with their own perspectives and requirements. For instance, when implementing Qsic in a retail setting, we need to engage with the marketing, finance, and IT departments. It’s crucial to bring all these parties together, aligning their goals and facilitating effective communication. 

At our company, we’ve recognized the importance of this challenge and have worked diligently to address it. We understand that just presenting a new technology isn’t enough; we need to provide a comprehensive solution that encompasses all aspects of the implementation process. This starts with building a compelling business case. We assist in setting up trials, demonstrating the practical benefits of our technology in a real-world setting. These trials are crucial for stakeholders to see the value of our solution firsthand. 

Beyond the trial phase, we also focus on financial modeling. It’s essential for us to clearly illustrate the return on investment and the overall value that our technology brings to the in-store channel. This approach helps us not only in gaining buy-in from various departments but also in ensuring that the implementation of our technology aligns with the retailer’s broader business objectives.  

Overall, our experience has taught us that success in digital transformation in retail isn’t just about the technology itself, but also about understanding and addressing the organizational challenges that come with it. Our comprehensive approach to stakeholder engagement and clear demonstration of value and ROI are key aspects of our value proposition to retailers. 

EB: What is your vision for the future of retail, considering the ongoing evolution of technology and consumer behavior? 

NL: As I look ahead to the future of retail, I see a landscape that’s all about collaboration and integration when it comes to technology. It’s a vision where technology platforms work hand-in-hand, creating a harmonious blend that delivers even greater value to both retailers and consumers. 

A prime example of this collaborative approach is the partnership between platforms like Engage3 and Qsic. On their own, these platforms excel in their respective areas – Engage3 with its pricing intelligence and Qsic with its in-store audio experiences. But when integrated, something truly remarkable happens; they amplify each other’s strengths, taking retail media to a whole new level. It’s not just combining two things; it’s about making them work together to create something much better. 

This synergy underscores a fundamental truth in the retail industry – it’s not about trying to be everything for everyone. Instead, it’s about forging partnerships and integrations that bring together complementary strengths. By doing so, we create a comprehensive and captivating value proposition for our customers. 

The future of retail will be defined by how effectively we integrate and collaborate across diverse technologies, ensuring that the resulting whole is indeed greater than the sum of its parts. 

EB: How do you anticipate the role of retail technology evolving in the coming years? 

NL: In the near future, retail technology will evolve to offer flexible solutions that seamlessly integrate into diverse retail settings. This means adaptable technology that caters to each retailer’s specific needs, is compatible with existing systems, and provides comprehensive solutions for various retail operations, from inventory management to customer engagement. In essence, retail technology will become an integral and versatile part of the retail landscape, empowering retailers to deliver amazing customer experiences. 

EB: How is technology being leveraged to improve customer experience and personalize services in the retail space? 

NL: Technology is playing a transformative role in enhancing customer experience and personalizing services in retail. The key lies in creating a seamless and immersive shopping environment, we’ve obviously been focusing on media instore. Todays, technologies like digital signage, interactive kiosks, and smart audio systems are not just about broadcasting content; they’re about creating a narrative that resonates with each customer. For example, our audio solutions in stores are tailored to reflect the brand’s identity and the customers’ preferences, thereby personalizing their shopping experience. 

In terms of personalization, the integration of mobile technology and in-store experiences is pivotal. Retailers are using apps to offer personalized discounts and recommendations based on the customer’s shopping history. When customers enter a store, these apps can sync with in-store technology to provide a unique, customized shopping journey, enhancing the overall experience. 

EB: What role does data analytics and AI play in enhancing customer engagement and tailoring experiences? 

NL: Now, speaking about the role of data analytics and AI, these are the backbone of modern customer engagement strategies. Data analytics allows us to understand customer behaviors, preferences, and patterns. This understanding is critical in tailoring experiences that not only meet but anticipate customer needs. For instance, by analyzing purchase history and browsing data, retailers can offer personalized product recommendations and targeted promotions. 

AI takes this a step further by enabling real-time personalization. It can dynamically alter in-store media based on the current audience, time of day, or even weather conditions, ensuring that the content is always relevant and engaging.  

In essence, technology, particularly data analytics and AI, is at the forefront of crafting personalized, engaging, and memorable retail experiences. My focus in the realm of in-store retail media has shown me that the future of retail lies in the intelligent integration of these technologies, creating environments that delight and engage customers at every touchpoint. 

EB: It’s all about time-to-value these days for Retailers and Brands. How do you help deliver a strong time-to-value ROI?  

NL: In the retail industry today, achieving a rapid return on investment is essential. Our company addresses this through the commercialization of in-store audio media. When we implement our solutions, retailers can immediately start generating revenue by selling advertising airtime to brands. This process is fast and efficient, leading to a quick ROI. 

What really sets our approach apart is our ability to measure the impact of these advertisements. We employ advanced analytics to track how these ads influence customer behavior and sales. This data is crucial. It not only shows the immediate value of our solutions to retailers but also encourages brands to increase their investment. They see real, quantifiable results in terms of customer engagement and sales, which drives them to invest further. 

So, in a nutshell, our rapid deployment of retail media solutions, combined with our robust measurement capabilities, helps retailers and brands see a swift and significant return on their investment, fostering a cycle of continuous growth and reinvestment in the sector. 

EB: What strategies do you believe will be essential for retailers to remain competitive in the evolving technological landscape? 

NL: In this rapidly evolving technological landscape, it’s crucial for retailers to adopt strategies that recognize a significant shift in the retail ecosystem. In my view, the key to staying competitive is understanding that Consumer Packaged Goods (CPG) brands are now as important as consumers themselves. 

Retailers must position themselves not just as sellers but as media platforms. This involves investing in technologies that provide deep insights into consumer behaviors through advanced data analytics. These insights are invaluable to CPG brands in tailoring their marketing strategies to be more effective and personalized. 

Another vital strategy is establishing direct communication channels within the retail environment. This enables CPG brands to engage directly with consumers at the point of sale, transforming each interaction into a meaningful engagement and opportunity. 

So, in essence, the future of retail hinges on this dual approach: embracing the role of a media platform for CPG brands while continuing to enhance the consumer experience. This balanced focus is what I believe will be pivotal for retailers to remain competitive and thrive in the face of technological advancements. 

EB: As technology continues to reshape retail, what ethical considerations do you think companies should prioritize in their technological advancements? 

NL: In the realm of retail media, where technology is rapidly evolving, the most crucial ethical consideration for companies should be privacy. As we use consumer data to personalize and target retail experiences, it’s vital to strike a balance between effective personalization and the respectful handling of consumer information. 

Transparency is key. We must be clear with our customers about how their data is collected and used, ensuring we not only comply with privacy laws but also build trust. Additionally, with technologies like AI in play, securing and ethically using this data becomes more important than ever. 

It’s also about empowering consumers with control over their data. They should have clear choices regarding data collection and understand its usage. This approach is not just about legal compliance; it’s about building a trustworthy relationship with our customers and maintaining a responsible brand image in the face of technological advancements. 

EB: How do you see retail technology addressing societal and environmental concerns in the future? 

NL: In the future, a major focus for retail technology will be in tackling environmental concerns, particularly around wastage. For example, using AI and data analytics in supply chain management can greatly reduce overproduction and excess inventory, which are significant sources of waste in retail. 

Also, incorporating energy-efficient technologies in stores will help reduce our environmental footprint. This includes optimizing systems like lighting and HVAC, which not only saves energy but also reduces waste. 

In essence, retail technology is moving towards not just improving business efficiency but also making a real impact on environmental sustainability by minimizing wastage