You may have seen in late June, that Stuzo, a provider of intelligent 1:1 loyalty and contactless commerce technology for high frequency, everyday spend retailers, acquired Hatch, a retail customer activation platform provider. You can go here to see the news announcement from Stuzo and visit the new website to gather more information.
Stuzo was able to complete the acquisition based in part on its three consecutive years of profitable 50% year-over-year growth. Hatch has been on an evolving journey, rebranding from Belly to Hatch Loyalty in 2017 — and now becoming part of Stuzo. The original investors in Belly were high profile and included Lightbank in Chicago and Andreessen Horowitz and DAG Ventures in Silicon Valley. The rebranding and pivot in market positioning in 2017 setup Hatch for this latest transaction. We had the opportunity to speak with Gunter Pfau, Founder & CEO, and Jake Kiser, Chief Customer Officer, about the acquisition and the future ahead.
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Wise Marketer (WM): Can you share an overview of Stuzo?
Jake Kiser: Stuzo is an activation and commerce technology company and our Open Commerce® product suite includes the leading intelligent 1:1 loyalty, contactless commerce, and modern digital storefront technology in the space. Our managed software services empower retailers to operationalize programs powered by Open Commerce and bring to market custom loyalty, commerce, and mobile storefront solutions. We have now completed our work to integrate the Hatch platform into Open Commerce and have rebranded the product as Open Commerce Activate.
Driving share of wallet with loyalty technology
WM: To my knowledge before the acquisition, Stuzo was mostly known for building mobile apps in the retail and fuel sector. It seems the acquisition creates a fully complemented technology platform to deliver highly personalized offers to consumers within the context of a loyalty program. Can you clarify this and add what you think would be helpful?
Jake: Yes, the acquisition creates a fully complemented technology platform to deliver highly personalized offers, content, and commerce experiences to consumers within the context of loyalty and digital commerce programs. For many years, Stuzo has been in the business of bringing modern digital storefront experiences to life for everyday spend category retailers and powering the cloud-based digital infrastructure and enterprise integrations that orchestrate communications between the digital customer experience and the retailer’s legacy enterprise systems, such as their POS, CRM, payment processors, loyalty technologies, and so on. While mobile is a key and integral component of a retailer’s digital strategy, it should not overshadow the importance of other engagement channels that Stuzo manages on behalf of its retailer partners, including progressive web apps, connected car apps, wearable apps (for Apple Watch, Samsung Gear, and so on), Amazon Alexa voice apps, and more.
WM: The acquisition was completed in October of 2019 but just announced in June 2020. Why?
Jake: Our announcement of the acquisition was delayed until Stuzo fully integrated Hatch as a product under our Open Commerce platform.
WM: What does the acquisition mean for retailers and other potential clients?
Jake: With the acquisition complete, we can help retailers gain more share of wallet than anyone else in the industry. We do this by helping them know and activate more customers in real time to drive profitable behavior change. For our convenience and fuel partners we are driving profitable engagement at scale with tens of millions of monthly gallons, millions of monthly transactions, and hundreds of millions of dollars a month flowing through Open Commerce. Open Commerce Activate creates more loyal customer relationships that drive more visits, more gallons and bigger baskets by getting the right offer to the right customer at the right time.
WM: You mentioned that the timing of this transaction is important for the retail industry. Why?
Gunter Pfau: This is a highly relevant time to bring this newly combined offer to market. We believe that if there is a business objective you want to achieve, that we can do it for you. This is based in our philosophy that if "we do the right things for customers; they will do the best for us". If you want a more quantitative answer, I'd say that we can help any brand drive incremental revenues at scale through digital transformation. We have developed a modern API driven loyalty engine that can be applied to any industry. Essentially, if you bring your own connectivity, we'll match it up with our API's.
Hyper-personalized digital experience
WM: Is your technology platform focused solely on customer loyalty or does it offer ancillary parts of the customer experience like payments or order and delivery?
Jake: We do support a mobile wallet as well as contactless commerce capabilities for pay at the pump and pay in store. We empower the retailer to utilize their preferred payment methods, whether a gift card, ACH payment and can work with many payment processors. Further, we believe customers all expect a hyper-personalized digital experience. To this end, our modern digital storefront capabilities bring our personalized loyalty and commerce technologies to life, uniquely empowering retailers to deliver one to one engagement solutions that extend their physical store products and services across channels and empower each customer with choice and flexibility in how they engage with the retailer’s brand.
WM: What was your vision when you decided to acquire Hatch Loyalty?
Gunter: We have always believed that loyalty is an outcome, not an input. And, we saw many companies talking about intelligent one to one loyalty but not delivering to fulfill this promise. We saw an opportunity in that complexity of convenience to develop a contactless commerce platform that could be delivered to consumers through multiple channels. We focus primarily on mobile and web channels, but also work with the connected car, voice, SMS, wearables, kiosk, and other channels.
WM: So, you see customer loyalty continuing to be important for brands in the near future?
Jake: Absolutely. We have proven many times through interactions with our retail partners that the more we know and activate a customer, the more incremental revenue the retailer will drive from that customer.