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The retail and restaurant industries today are facing an exponential overexpansion which directly leads to sales deterioration as guest count increases become zero-sum game. With the current channels and solutions for marketing existing today results are hazy at best.Traditional mass marketing depended on interrupting customers with repeated broadcast messages. Mass marketers relied on "bribes" to sell products when using discount offers. These were the ways to leverage TV, radio, newspapers and other forms of mass media: trumpet a one-size-fits-all message and coax consumers to buy products with coupons. With traditional brick-and-mortar shops 80% of the revenue comes from 20% of their customers emphasizing the importance of retention. Many owners don’t have the resources to advertise/promote via channels with a wide reach and hence are always hidden in the midst of the competition or bigger boys, so they turn into alternative & affordable channels such as Groupon (or other group buying sites), discounted coupons on free magazines, etc. This disadvantage results in a higher rate of closing for those brick and mortar shops. Although group buying sites are the market leader when it comes to driving traffic to specific merchants they still have a great disadvantage and most of merchants agree that they don't like them. Here are a couple of these reasons
1- Merchants are paid not by the end users at their store but by the group buying site thereby group buying site controls when the merchant gets back his money. 
2- Merchants not only give a highly discounted voucher to the end user (example: 50% off or 2 for 1) but they also share high percentage of their revenue with the group buying site (can reach to 40%). so most of these deals is done at cost for the merchant or even losing money on it
3- Merchants have to go through the hassle of claiming each voucher with these group buying sites to be able to collect their money back, they will not be paid for unclaimed vouchers. most  of the merchants claims their vouchers online by the end of the month and not on a real time basis
4- Most importantly, Merchants don't know information about their users who bought these vouchers, these information is not shared by the group buying sites with the merchants and thereby they can't market or reach out for these users again.

In summary, With AdvanTag we want to disrupt this market and we want to give merchants more control to be able to engage, communicate with their customers and convert new customers into loyal customers. We know that by increasing the retention rate by only 5%, we can increase their profits by at least 25% 


Investment Rounds

  • Date January, 2013 | Type Seed | Source 750000