Perfit with Jason Fordham and Casey Reagan

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In this episode, I talk with Jason Fordham and Casey Reagan of Perfit. Jason is the co-founder and CEO, and Casey is the COO of the company. Perfit is a customer engagement platform that is really changing the way people shop in stores, specifically, in retail fashion and apparel. The main goal of Perfit is to bring the ease of digital shopping to brick and mortar retailers, starting with the fitting room.

The idea all began when Jason and his wife went to the local shopping mall to pass time on an afternoon. While they were there, his wife was asking for him to bring other options to the fitting room, and he thought, “there’s got to be an app for that”. It was after this experience that Perfit was developed. Perfit is a platform that allows you to make requests to associates, who then receive that request, and can bring you what you ask.

Jason and Casey explain more about the current status of Perfit, and the product roadmap they have planned. 87% of customers in fashion retail are there to try on clothing. And of that number, 51% of customers who are unable to find the right size, style, or color item leave without buying anything. Perfit is a platform to enhance the customer experience and drive traffic and conversions to answer this problem.

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Topics In This Episode:

  • The importance of customer experience

  • The state of the market and their competitors

  • Platform interface for customers and users

  • Developing your target customer, and fitting their needs

  • Online vs brick and mortar shopping

  • Track competitor and investor information

  • Biggest lessons learned

Contact Info:

Transcript

Mike Kelly:                         
Welcome to the podcast. Today we have Jason Fordham, who's one of the co-founders and CEO of Perfit and Casey Reagan, who's the COO and Co-Founder of Perfit. Gentlemen, welcome to the show.

Jason Fordham:               
Thanks for having us.

Mike Kelly:                         
Absolutely.

Mike Kelly:                         
Alright, let's start off with a quick pitch for Perfit. What is Perfit? What do you guys do?

Jason Fordham:               
Perfit is a customer engagement platform that is really changing the way people shop in stores. So, the main goal of Perfit is really to bring the ease of digital shopping to brick and mortar. Retail focused, but we are highly sensitive to the customer experience in the retail store. So, we've built a platform that focuses on driving a better experience that is more akin to the digital shopping experience, specifically in retail fashion, in apparel stores.

Mike Kelly:                         
So, what does that actually look like? If I'm a customer at ... I don't even know where I shop ... Eddie Bauer. So, if I'm a customer at Eddie Bauer, what does that actually look like for me? How do I interact with your product?

Jason Fordham:               
The main purpose of this is to create a customer driven experience. So, when the customer enters the store, usually they are shopping around you, or just shopping around, browsing throughout the products. Often, if it is a fashion and apparel store you are there so that you can feel what a product feels like, what it looks like, and more importantly how does it fit on your body? So, that's why the fitting room is quintessential to the customer experience inside of fashion and apparel retailers.

Jason Fordham:               
For example, 87% of people who go to a fashion and apparel retailer, are there to try on clothing. So, that is why we have started with that in mind. It's the very central point for Perfit, is to improve the customer experience, starting with the fitting room.

Mike Kelly:                         
But what does that actually look like? Is there an app on my phone that I'm pulling out when I get into the store? Is there something in the fitting room? Like, what am I doing to interact with you guys?

Jason Fordham:               
The year is 2019, and at this point everyone is expected that when they enter a fitting room, there is some form of a digital display. Whether that be a smart mirror, or more appropriately a device, almost a tablet, hanging on a wall sitting right there, that shows the products that you have in there, a recommendation for what other corresponding products will go along with that. Give me product information, give me sizing option, give me color options. Basically all the information that you are used to seeing on your phone, or on your desktop. When you're sitting there in the change room, the last thing you can do is have a hand holding a phone, trying to circle through what other options you have, simply because you're trying to put on clothing.

Jason Fordham:               
So, that's why there is a device that is hands free with product information sitting right there. Really, this is where the customer driven experience begins, is by being able to interact with a device hanging on the wall that then also gives you the ability to, most importantly, request a different item. So, perhaps one of the recommendations that's sitting there, or often in my case I'd get the wrong size, and my options are to yell over the wall to whoever I'm shopping with, if I'm shopping with someone to grab something for me. To get redressed into the other clothes that I brought, that I wore in, or probably the worst option is to walk out in the clothes that I'm currently dressed in. Leaving my phone, my wallet and everything sitting in the fitting room. Those are your three options at the current moment.

Jason Fordham:               
So, we have designed a platform that allows you to make requests, and those requests go to the associates who are in the store and are then armed with an app that is downloadable from the iOS store, or the Google Play Store that allows them to receive your request. Such as, fitting room three is looking for a size 32 jean in this particular style, this particular color. That request goes out to all the associates currently logged into their app, and they can say, "I'm on it. I'm claiming it." Which then provides the feedback directly to the device in the room, and says, "Casey is on it and Casey will bring you the item." So, we're trying to simplify that process which in fact causes 51% of people to leave a fitting room without purchasing, or without the intent to purchase, because they cannot find the right size, style, or color that they're looking for in the store.

Mike Kelly:                         
How does the device know what items I've brought into the fitting room with me?

Casey Reagan:                  
The experience starts when you arrive at the store. You go to try things on. There's a barcode scanner in the room and the device that the associate has, also has a scanner in it. So, depending on the experience that the store wants to present and how they want to manage the actually rooms, or the fitting experience there, the associate can scan those items or the shopper can scan them. Then, they show up on the display, everything that gets scanned in.

Mike Kelly:                         
Got it. Is that scanner a camera, or is that scanner infrared? What is that?

Casey Reagan:                  
It's a standard infrared scanner. No cameras are on our device in the room. We've seen other technologies that present like 3D views and all this of people in the fitting room, and we're not going for that kind of experience. We're trying to make this a very comfortable experience, a very easy experience for shoppers. So, that was one of our first rules out of the gate is, there will not be a camera on any of the devices that are in the rooms.

Mike Kelly:                         
When you are selling to a retailer, are you guys providing those in-room devices, along with the software? Or are they providing their own devices as part of an implementation.

Casey Reagan:                  
For the associate themselves, as Jason mentioned, the application can be downloaded to their device. So, if they have short term associates, or seasonal help, or people who only work various days, they can come in on an emergency. They can quickly download the application and be up and running. The device that's in the room, we are having a partner that's going to help us with the hardware side of that. So, that is provided as part of the solution, but it's not part of our core business.

Mike Kelly:                         
Got it. So, current status of the business. Where are you guys at? Any vanity metrics you can share, funds raised, revenue, customers, anything at all like number of fittings that have happened? Anything that kind of tells somebody where you're at.

Jason Fordham:               
Up to this point, we have bootstrapped the business in order to get the product developed. So, we've gone through a pretty intensive product development phase with getting the retailer feedback, prospect feedback along the way, and have gotten to our initial product release for the interactive touch screen, I should say, in the fitting room. The associate downloadable app are both fully complete. We've even built an MVP version of the additional portion of our business which we have yet to mention, which is the consumer app that allows them to interact with their fitting room once they've left the store, and then continue the experience. So, we even have an MVP version of that. So, the product development for the initial phase is complete. We are in the process of approaching prospects, we've already engaged in several active conversations to deliver our first pilot customer. So, that is our primary focus at the current moment is the business development aspect in a very targeted prospect conversations.

Jason Fordham:               
We are now starting the process of moving outside of bootstrapping and looking to raise an initial round of funding. So, we've had several conversations moving, and even getting a few soft commits along the way. I'm certainly not going to divulge any of that information, but we have some soft commits along the way, but we're actively engaging with some initial institutional ground discussions as well, some key angel and individual investors for seed.

Mike Kelly:                         
Nice. So, when you think of that first customer, well maybe not, I'm guessing for beta you'll take any customers you can get because that's how betas work, but when you think of your target customer ... Maybe let's go there instead, right? Are you guys envisioning, like any product, you want to take over the world and go after everybody, but out of the gate, are you more focused on your big box Targets and Walmarts which all have fitting rooms, versus your JCrew, Abercrombie & Fitch, something you'd see more in a mall versus ... When you think of that customer, who are they? What demographic are they serving? How do you guys figure out who's going to be the best retailer for you to approach today?

Casey Reagan:                  
We're looking for customers that have multiple stores, at least three stores and multiple fitting rooms per store. So, not necessarily initially your boutique retailer where they've already got a very personal one on one experience with the shopper. We're looking for retailers that have a little bit more scale than that. Places where it is obviously important is our initial target.

Jason Fordham:               
It's really easy to identify one major problem that we are attempting to solve here which is, the number of customers versus the number of associates at key traffic times. So, a boutique usually has a pretty one to one relationship between the customer and then the associate in the store, or even in this case frequently the store owner. We still add value in those circumstances, but it's not our target market. Our target market, it's much more along the lines which you're discussing. The American Eagles of the world, the GAPs, the Abercrombie & Fitches, found within malls usually, not always. Old Navy is obviously another example of that, but where you have a higher ratio, two to one, three to one, 10 to one in some cases, of customer to associate and at these key points.

Jason Fordham:               
Frequently in those situations you have two major problems. No one can service the customer, so you're creating a negative customer experience with them. Two, you have a set number of fitting rooms. Often we see 10 fitting rooms in most of these stores. A few expand beyond that for these target stores, but they have 10 fitting rooms and they have 25 customers wanting to get in to try something on. The line that you create right there is a key challenge and often it's really derived from a lack of customer service, or a lack of availability for someone to deliver the right item. So, by creating these key efficiencies in the fitting room, streamlining the process, speeding up the process, you're going to have higher turnover in the fitting room and create higher conversions as well.

Jason Fordham:               
So, we were looking for those from an initial launch that meet that standard. The ideal will have roughly more than 100 stores and 10 fitting rooms. We're not looking for that for our initial pilot. Trying to create that scale is going to be a little bit more challenging for an initial launch, but trying to get into two or three stores, and a few of the fitting rooms in those examples would be an ideal pilot launch.

Mike Kelly:                         
How did you guys land on Perfit as a concept? I'm fascinated by the origin story and how you guys came to this product? Can you share a little bit of that?

Casey Reagan:                  
Jason has a great story for this.

Jason Fordham:               
So, this goes 18 months back actually.

Mike Kelly:                         
Because I'm not saying you guys aren't the most fashion forward gentlemen I've ever seen here, but you're kind of dressing like I would dress. Flannel and-

Casey Reagan:                  
We're a little dressed for the weather today as well.

Jason Fordham:               
I've departed from my roots of winning best dressed in high school, I believe, but that had nothing to do with this.

Mike Kelly:                         
Did you actually [crosstalk 00:12:21]

Jason Fordham:               
I did actually win best dressed.

Mike Kelly:                         
Okay.

Jason Fordham:               
I went to an all male high school and won best dressed.

Mike Kelly:                         
Fantastic.

Jason Fordham:               
I can even submit the year book if you want add that to the post.

Mike Kelly:                         
I'm good.

Jason Fordham:               
This goes back 18 months, where this idea came to fruition and it happened right here in downtown Indianapolis. In fact, I was with my wife in between the ceremony of a coworkers daughter's wedding, and the reception. So, there was a couple hour delay. I live 20, 30 minutes from downtown, we had a babysitter for our kids and you don't get much better than that in these circumstances. So, during the day we thought, what are we going to do while we're waiting to go to the reception? My wife said, "Hey sure, let's go to the mall. We'll go to Circle Centre and we'll just look around.

Jason Fordham:               
We had no particular intentions. We weren't one of the 87% that was looking to try anything on. In fact, we were dressed up, so it seemed a really far cry from what we would end up doing, but we found ourselves in an American Eagle down in Circle Centre. My wife had just grabbed a few things. I think we actually had three or four hours, so there was plenty of time to try something on. So, she goes in the fitting room, I'm standing outside as I normally do in that circumstance, on my phone. After a couple minutes, the obligatory, "Hey Jason, will you grab me this, in this size?" I obviously can't remember what she was looking for. I think it was jeans at the time, but it was, "Can you grab me this in this size, this in this size, this in this size, and then clearly the 2009 Apple commercial stuck in my mind.

Jason Fordham:               
There's got to be an app for this, because I just can't record this at the moment. I'm trying to read, probably ESPN at that point, and capture what she's yelling over the wall at me from three fitting rooms from where I'm standing. So, I get everything. I hand it to her, but as I'm doing this I'm thinking, "There's got to be a better way." The first thing that comes to mind is, "It's 2017. Where is the device in the fitting room that I heard about 10 years ago? We should have these by now." So, that just started to formulate this idea and after a couple days speaking with Casey, speaking with one of the other co-founders, Jamal. We really started to formulate what would be the value proposition outside of simply having a device in the fitting room that lets you request. There are some really key features that we landed on that are going to improve the customer experience. Largely because, we see a base customer experience can drive ... Sorry, the term is, a moderate improvement in customer experience can drive 25% higher profits for a retailer.

Jason Fordham:               
So, how do we improve that customer experience? This is where we started to say, well obviously you got to be able to get things to the shopper. So, the associates can be more efficient in that. We've got to be able to give product recommendations because those drive 10% increase in sales and online. What if you could actually try something on [inaudible 00:15:37] in the fitting room. So, that one experience of my wife standing in the fitting room, yelling over the wall at me, led to the base concept that I then spent the remainder of the wedding formulating in my mind. Thinking, "Okay, how could we do this?" Again, talking about it with Casey, talking about it with one of the other co-founders, Jamal, and we came up with the base feature set that is now available within the Perfit platform.

Mike Kelly:                         
Alright. Let's get into competition. When you guys step back and look at this space and the companies that you're competing with right now, who are the closest competitors? Who comes to mind?

Casey Reagan:                  
I don't know if we'd ever necessarily want to name all the competitors out there. There's a number of different solutions that people are trying in the fitting room. We've seen everything from a button, a wall that lights up a light that nobody's looking at.

Jason Fordham:               
That's old school.

Casey Reagan:                  
We've seen the 3D cameras. There's actually a lingerie company that has this on their site that this is their proprietary technology. You can go into a fitting room and there's a 360 degree camera that will measure you for your bra. It's like, what woman wants to do this, first of all. Then, where's the data going for it, that's being captured from this? It's kind of a scary prospect, the type of things that we're seeing. Coffee in the fitting rooms.

Casey Reagan:                  
Again, they're trying to change this experience. I saw one yesterday too, where you go into the store and the first thing that they want you to do is pick up a red basket, or a black basket to say, "Do you want help from an associate or not?" So, you pick up the black basket and you don't want help. Then you decide later you need the help, are you supposed to go switch the basket? You know, there's all kinds of crazy ideas people are trying.

Casey Reagan:                  
So, we feel like this kind of a basic solution of what people are used to on a web platform to where they can easily request what they want, is really what is going to drive the market here. I think everybody recognizes that something needs to be done with the fitting room. It's very outdated in what's happening today, and we feel like this is the solution for it.

Jason Fordham:               
Let me jump in there as well. There is a very large focus that's come about over the last two to three years on improving the customer service, or the customer experience inside the brick and mortar stores. So, there's already been a lot of investment that's started to go on, or [inaudible 00:18:04] there's a lot of development that's started to go on. I'm going to look at Tulip Retail, to actually name a company. They focus on putting the experience in the hands of the associate, so they work with a lot of products, Apple and different products that provide a tablet, or an iPad that someone can therefore look on while they're working directly with an associate.

Jason Fordham:               
A valuable experience and we know those guys from our past lives. They've done very well with their application. The problem is, it's associate driven, not customer driven. That's really one of the major changes that needs to happen. Ralph Lauren actually were partnered with one of eBay's services group to build out this experience. They didn't do it in such a way that it was scalable. They were spending three plus, four plus thousand dollars per fitting room to do this. If you're a store like American Eagle, you have about 11,000 fitting rooms. You can do the math really quickly of why that's not a scalable solution.

Jason Fordham:               
We've seen a lot of those smart mirrors had their heyday about four or five years ago, but I think what most people missed on the smart mirror, while it's a cool looking technology, you're actively negatively impacting why someone walks into that fitting room. Which is, they want to see themselves in a mirror, so when you're putting your hand prints and somebody else's hand prints all over this mirror to click on, "I want to see other items that look like this," you're defeating the primary purpose of the fitting room. So, we've seen companies like that come and go.

Jason Fordham:               
The only other ones ... There's a couple, I'll name one more, Keonn. They're on our competitive landscape because they are security tagging and RFID tagging all clothing. So, that's great if you want to know who's carrying what around in the stores, but the build out cost to be able to drop that in everywhere, is extremely high and it still doesn't solve the other problem of responsive interactivity. So, that's really where we see what's the competitive space right now, is focusing on devices in the associates hands. RFID, is not a simple customer-driven solution. There's a couple that are starting to come up, but most of them have been more early stages, pilot to pilot tests.

Mike Kelly:                         
So, when I listen to you guys talk through that landscape, it sounds like there's not ... outside of smart mirrors in particular, it sounds like there's not a lot of technology getting dropped into fitting rooms that scale. So, when you're going out and talking to retailers, how much of that is just general resistance to adopting new technology versus displacing something that they might already be piloting, or doing today. I guess I'm a little curious, just if you guys can riff on it a little bit. In that sales cycle, those first conversations, how much of that is educating them versus on the opportunity and what you can do from a customer experience perspective versus just getting them into this idea that this is even a place for investment. I'd love to hear what some of those conversations have been like.

Casey Reagan:                  
Yeah, there's definitely been a trend over the last several years, where retailers have been more focused on online technology, but I definitely see that is starting to shift and we're having good conversations with retailers. As I mentioned before, there's been a lot of tests and trials with different technologies. So, there's not a fear of implementing technology in the brick and mortar environment. I think it's just a matter of finding the right solution that fits for them. Again, the shift back to, how can we improve the brick and mortar experience? Over the past several years, we've improved the online experience a lot and gotten to a really good point with it, and retailers are seeing that they need to start putting some dollars back in. Especially as they downscale the number of associates that are in stores, and trying to keep up that customer experience.

Jason Fordham:               
Mostly during the sales process, it's not an education of why the customer experience needs to be improved. They know that, and they know that the in-store experience still needs to be improved. There's always this conversation of the retail apocalypse, or the death of retail. Retail, and more specifically brick and mortar still makes up over 80 plus percent. Some studies say 90% of sales are still occurring in stores.

Mike Kelly:                       
I'm assuming that stat is overall retail, right? So, that's everything from Band-Aids to fashion.

Jason Fordham:               
Absolutely.

Mike Kelly:                         
Do you know what those numbers are for fashion?

Jason Fordham:               
Yes, 83%. 17% of sales are occurring online. Which I mean, that's great. It's growing at 10% a year. So, some quick math tells you something. Fashion and apparel is growing at roughly 3% per year for the entire industry. I'll put this benchmark out there, it's roughly a three trillion dollar industry for fashion and apparel worldwide. US alone, it's around 350 to 400 billion dollars annually. Of that, you're getting 80 plus percent occurring in-stores still to this day, and it's a very, very large prospect. It's great that online's growing and we're not trying to dismiss online. We're trying to create a more consistent experience between online and offline, which retailers have been looking at doing over the last five, 10 years. They just haven't focused on technology in the stores. It's been more about data aggregation. Now, they need to come up with ways to personalize the experience in store. So that from an education standpoint, we don't really have to tell them, "You need to do this." It's more, is this the right approach for them?

Jason Fordham:               
Certain retailers don't have near the interest in improving the fitting room, because fitting rooms are small components of that. We talked to one retailer who's more focused on shoes. This applies in the shoe world, and we've done some experiments with that, but it's not as much as if you're in the fitting room it's a very easy prospect. It's really starting to come onto retailer's radar. So, I feel really good about overtaking their space, and the sales process is more, why us and why we create scalability. Because, the biggest push back is that there's been two larger pushbacks over the last several years in this particular space.

Jason Fordham:               
One, everyone wanted to build their own app. So, everybody said, "No, no, no, I don't want to use anybody else's technology. I want to do it all within my app." We've had a couple retailers who are more established with their own apps. They still have under a million users of their app, but they still are really gung-ho on it. Looking at, let's go locally to the Keystone Fashion Mall. I downloaded 83 apps when I walked through that place and said, "Let me get every app that exists in this mall." Think I downloaded 83, was the number. That's really a bad customer experience to start if I'm having to bounce around on my phone for that. So, that's been one pushback.

Jason Fordham:               
The other is scalability. We can't do this if we got 11,000 fitting rooms, and it costs me $3,000.00 per fitting room, just to get this thing established, let alone ongoing costs. It's a non-starter for them. So, where we've really built it out is how do you create a consumable way to try it out, pilot it, make sure that it returns the value because it's a pretty easy value proposition. So, if you can try it easily, you can do it at scale and you can launch it more incrementally. That's how our business model is built out, is to allow someone to just dip their toe in the water, test it out. That's why our partnership with a key alliance, the hardware manufacturer who manages the installs, the way that they power their devices. All of those things play to our ability to launch this without having a massive capital investment upfront.

Mike Kelly:                         
Love it. Are you guys open to talking about product roadmap?

Jason Fordham:               
Absolutely. Happy to do it, in fact this is where I probably geek out the most is getting into product roadmaps.

Mike Kelly:                         
Because there's a thing that you said in there that keyed me off, which then took me down this whole path of like, well what could this product become, which I'm sure you guys have some awesome ideas. So, the specific thing you said was, "How does a retailer bridge that in-store versus online experience?" Which got me thinking about the data that you're potentially capturing around not just the in-store analytics of like what are the physical products that are actually making it into fitting rooms. Which is baller just in and of itself, right? Like, you've got this thing on an end cap and nobody's picking it up and taking it into a fitting room.

Casey Reagan:                  
Yeah, this is largely invisible data at this point. What people are browsing for, what people are picking around like you said, into the rooms.

Mike Kelly:                         
So, that's really cool, but then you've got this other thing which is, do you know who the shopper is? Can you identify, because they're not using their phone, right? So, do you know who that shopper is?

Casey Reagan:                  
Well, that does get into the roadmap conversation and some of the next steps.

Mike Kelly:                         
Talk about that a little bit because that is very exciting to me as well, around what you can even provide to the shopper around brand loyalty and if you liked this at this store, you might like this other thing. Talk a little bit about that.

Casey Reagan:                  
Exactly. So, yeah. Definitely on our roadmap and we've already got prototypes of this, is a consumer app. That sort of begins with the fitting experience that you can take with you. So, there will be a way that you can scan the device that you're interacting with in the fit experience, and bring all those items to your personal device. You can take a picture of yourself wearing it, share it with your friends, get their feedback and opinions. Then, as you start to shop around, as you mentioned, we can recognize that you're looking for this pair of jeans that maybe you didn't find them at the store you're in. We know all the other stores that have jeans like that, and we can alert you to those items being available.

Casey Reagan:                  
We can go so far as to allow you to create a wishlist of what you might be shopping for, and show you all the local places where you can get it, and customize that to, "Here's the best store to go to, to get as many items on your wishlist as you want. Here's all the different stores to get the best prices that you want." We can take it lots of different directions and I know Jason's been actually playing around with this, last couple days. Even some additional ideas on it and how we can treat that consumer experience to do more.

Jason Fordham:               
What's really critical here is, the Perfit experience to start can be used by an anonymous shopper. We want to eliminate barriers to usage, but where we want to get this is to drive value for the shopper themselves as well. Obviously higher conversions, and better experience is valuable to the retailer, but we want to create a value to the shopper as well to encourage them, incent them effectively to download the consumer app. Because if you can download the consumer app which we have in MVP stage right now, that is going to be where we see the longterm value.

Jason Fordham:               
You mention it yourself, the data is unimaginable. Being able to identify who is in that fitting room by simply having them scan their phone up against the infrared scanner that's already in there, that functionality already exists. So, they can take the fitting room home with them, but it also introduces the next step that we're in the process of building, which is why we're actively looking for funding this time. We want to really accelerate the roadmap. We want to take it so that when you are in the fitting room, you find that exact item that you like. You don't need to leave that fitting room to check out. So, adding the checkout capability right there in the fitting room, on your phone. Use Apple Pay, use Google Pay. We will not be collecting the funds because that's a barrier for the retailer. Instead, we can pass that directly through to the retailer's current point of sale system's who supports that, and almost all of them do. We now concur we will be able to get that checkout right there, then notify the associates, "Fitting room two is checked out."

Jason Fordham:               
It's, "Casey, go bring a bag to them, go bring the security tag remover." That way they don't have to go stand in line, potentially creating another barrier for them converting. So, you're providing immediate value, you're creating an experience more akin to the online experience where in that instant, they can complete the purchase and they're doing it directly on their mobile device. Obviously that's value to the consumer, but in doing that, they've now identified who they are in that fitting room and you can see, here's all the items that they brought into the room. Here's all the items that they tried on, but didn't purchase. Here's all the items that they purchased. Here's the items they requested. It starts to hone the recommendations that were provided.

Jason Fordham:               
You talk about perfect fit, that's the biggest challenge with online for fashion and apparel. The inability to know exactly how something fits and there are companies that are focused and they are doing very well on trying to say, "Well if you wear a medium in this, then in this brand you're going to need that." We can take it to another step further of, you may like a particular brand. I have brands that I'm very loyal to, but there are only specific products in there that are perfect for me. It's the aspect about that product. It's the sleeve length. I get very, very big on sleeve length. It's the weight of the material, it's the type of material. It's all of those aspects about the product, which we can get that information, and we can start to create a massive understanding of what you as an individual are interested in, to create that perfect fit.

Jason Fordham:               
So, it doesn't just happen in the fitting room. We can then say, when you're online, "We know who you are. This is the exact fit, or the exact set of products you want." So, the ability to utilize that data for the individual in the experience is amazing, but as Casey mentioned, it goes way beyond that. This is where we started to prototype the ability to understand, on a basic shopping list, what's near you? This is where we extend outside of fashion and apparel. Add your shopping list, and in our prototype I think I've got the things that are on my current shopping list. I need light bulbs. I need kids running shoes, a specific brand ASICS for my son. So, we need those. I need some shampoo that's only available in certain locations in the city, and then I think there's one more thing that's on there, an iPhone charger. I need to get a new iPhone charger.

Jason Fordham:               
So, in the prototype it combs through all the local stores nearest to me, to find which store has the item that I'm looking for, so to speak. So, it shows me, "Here's the nearest store," for each item. As Casey said, it also has the ability in our prototype to say, "Here's the store with all of the items." So, which is the closest store with all of them, or if I know I'm going to the Fashion Mall, I can select a location and say, "Okay, what stores are there that have all these individual devices?" Which then creates a very interesting prospect for the retailers themselves. In fact, we've gotten some feedback directly from some of the active conversations we're having of, they see this as a traffic driver for their stores.

Jason Fordham:               
So, it's not just about customer experience. It's the equivalent of Google ad placement in the brick and mortar. The ability to just say, "I hit the Fashion Mall. I can pull up my shopping list. Here's every store that has the ASIC Kayano running shoe that I use and here's the price point for each of them." So, it's like ad placement.

Mike Kelly:                         
Yeah.

Jason Fordham:               
Which, opens entirely new revenue stream and an entirely new set of conversation, but I'll stop there, I should say.

Mike Kelly:                         
But also opens some challenges. So, do I have your permission to ask some more challenging questions?

Jason Fordham:               
You are absolutely welcome to.

Mike Kelly:                         
Alright, because you're allowed to say no to that.

Jason Fordham:               
But you're welcome.

Mike Kelly:                         
I guess the first one is, sales challenge. As you can imagine, if I'm the retailer and I know that you're potentially now showing somebody where they can get these shoes half a mile away for $2.00 less, or $5.00 less I'm not necessarily thrilled about that, right? Because, one you're driving margin out of my ... because I got to be competitive with that. I have to be cost competitive. So, you're driving margin out of the business where margins are already fairly tight, depending on the retailer, right? Could be fairly tight, and also I think depending on the product within the retailer. Some products I'm sure are way more profitable than others.

Jason Fordham:               
Absolutely.

Mike Kelly:                         
So, I think that gets to one of your earlier statements of like, why are there 83 apps in the Fashion Mall? Because everybody is petrified of losing that customer loyalty, giving the data up to somebody else, so you can snake a sale out from underneath them. So, as you talk through that roadmap, that only makes me potentially as a retailer a little bit more nervous around, "Well, wait. If I'm not at the race to the bottom, where do I live?"

Jason Fordham:               
I share that exact concern. When we were initially talking about where Perfit is going, where it'll begin, we pushed the consumer app off to the side because of that exact fear. I was taken aback over the last couple weeks even, just due to conversations with some prospects that said, "Nope. I don't care. I just want the visibility. I don't care if competitor XYZ shows up right along side me. I just want the visibility to help drive the traffic." So, this was some of the executives at a particular retailer who just flat did not care about that, and they even have their own app. I said, "What about your app?" And the exact response was, "I don't care. I am more interested in driving the traffic. That is far more valuable to me, to get the opportunity to get that person in-store as opposed to just trying to do it based upon loyal customers."

Jason Fordham:               
So, I share your opinion and I'm seeking further conversations to validate this with others, but initial feedback shocked me when that was the case. We assumed this would be a viable option when we have a massive adoption of the Perfit platform general by the consumers. Then we have the positioning in which we can say, "There's 30 million people that use this. You have no choice but to do it." But, that wasn't the case at all. So, I was shocked by that.

Casey Reagan:                  
I think some of this may be the nature of the retail business. If you go do a Google search for a particular product, you're going to have the same type of a situation for a retailer, and even if you go back in time, Sunday morning comes. All the ads are coming to you at the same time for all the different retailers. They're going to show you similar products probably at slightly different price points. So, I think this has just always been part of the retail experience, that different stores have different price points, and they can choose to be in front of the customers, or they can choose not to. That more differentiates the success factor, than whether you're 50 cents cheaper maybe.

Jason Fordham:               
Let me add one more piece onto that. If your competitor is showing up on the list and you're not, you have no choice but to effectively get onto that, so there is sort of the idea, if they're doing it I have to play along. Keeping up with the Jones' in some respects for this.

Mike Kelly:                         
I want to challenge maybe in a different way. You guys had mentioned on the roadmap, not today, you'd mentioned potentially point of sale integration. Which, many, many a startup has died on the hill of point of sale integration as well as inventory management. I think when you're in the more mature companies, I can imagine a Coles or something like that, inventory management is probably fairly straight forward, and my guess is they probably know what they're doing. I am well aware, having spent a little bit of time in this space that there's a lot of retailers who don't necessarily have good realtime data for inventory and where it is, and stuff like that.

Mike Kelly:                         
So, talk a little bit about that. I'm specifically even thinking about, I walk in there, I scan the three items that I brought in there and your ability to even realtime show is it up to date, these sizes, these things? So, I would love your thoughts on, A) Either some of the challenges you've already faced in doing some of that, because I think you guys have already explored some of that, and what the strategy is going forward. Maybe around how you're going to tackle some of those challenges down the road.

Jason Fordham:               
Let me answer point of sale real quick, because that's a quick conversation and then I'll defer to you because you have a lot more experience with the inventory and product feed information. Point of sale, if we try to integrate with point of sale for all the different ones, we're going to spend all of our time doing implementation. Apple Pay and Google Pay, all you need to do is drop their particular API key as the target and it's a consistent implementation for all of them. So, in our initial launch of this, we're not trying to do credit card swipes or anything like that.

Mike Kelly:                         
So, you're just partnering with retailers who already support Apple Pay?

Jason Fordham:               
Yeah, they are a target when we launch this function. So, we've done a lot of research… Thank you. Keep it simple. Again, we want to take away barriers. When we become a multi billion international company, let's talk about how we can integrate with everyone else, and we have a lot of experience integrating with e-commerce platforms, marketing clouds, everything. I don't want to tackle that problem right now. Let's focus where we can, and keep it simple.

Mike Kelly:                         
I love that answer.

Casey Reagan:                  
Yeah, like Jason said, we've got a lot of experience integrating through some of our past lives, integrating with retailers, getting their product fees, getting their inventory information, getting all their pricing information, and keeping that up to date in order to market back to them. So, we have some experience around that. I won't go into the technical details on that.

Jason Fordham:               
Specifically when it comes to inventory management, we are aware that, that is going to be a challenge. In initial targets we are looking for those companies that do have more robust inventory management capabilities. APIs that provide us access to this, and fortunately now that it's 2019 there are more companies that are having this. They've gone through massive product standardization, sku standardization, so this does create opportunities for us to capitalize on those. We even looked at the go to market, if they don't have this. There are ways that you can manage this from a training aspect with the associate. If you're looking for a sweater in a medium in black and they only have the white, they can bring you the white one in the right size and say, "We know this isn't the right color. Try this on, make sure it fits, and then we can just drop ship it, or have it delivered to your home."

Jason Fordham:               
So, there are ways around that and if there's only a limited set of data that doesn't provide us a level of information that we want, there are ways to manage around that from an operational and execution standpoint.

Mike Kelly:                         
Can we switch to some rapid fire questions? It's getting close to time.

Jason Fordham:               
Alright.

Mike Kelly:                         
Do you guys formally track competitors in the space today?

Jason Fordham:               
Yes.

Casey Reagan:                  
Yes.

Mike Kelly:                         
Do you have a way that you track them? Is it a spreadsheet, a CRM system? Is there some place you put that information?

Jason Fordham:               
We have a CRM system that we track competitors, we track prospects, we have all of that already set up. We would track investors even with this.

Mike Kelly:                         
Hot dang. Good for you. Alright, I love that.

Mike Kelly:                         
This is for each of you individually, biggest thing you guys have learned in the last 6 to 12 months going down this journey, personally?

Casey Reagan:                  
Really, that there's a lot of crazy ideas out there that people are trying to solve this problem. Like I mentioned, the 360 degree view for lingerie was the most surprising thing that I could have imagined somebody would be doing.

Jason Fordham:               
For me, it's from an execution standpoint. Having gone through fundraising and been part of small startups before, never leading a startup, it really gave me a different perspective on how much do you need to lean on sale of futures in order to get everything of the ground easier and faster. That's honestly, the biggest ... I wouldn't call it a mistake, but the biggest lesson learned for me is you've got to branch out from our historical backgrounds of customer service. Which we both have that, and I need to lean more on the sales aspects that I've had, and say, "Let's sell." Get the customers involved. They can help guide this because a lot of the feedback surprised me, and we've had to tweak our roadmap along the way. So, getting the customer involved earlier and getting that customer signed up earlier would have been a huge value add for us during the process.

Mike Kelly:                         
Technology, not necessarily in the short term, but in the long term, new technology that in the long term you're most excited about. So, think block chain augmented reality, insert whatever you want here. What has you guys jazzed about your future product road mapping, where you might be able to explore or play?

Casey Reagan:                  
I don't know if it's necessarily a specific technology like that. We've got a lot that we're developing in our own platform. Obviously we're aware of all the augmented reality type things that people are trying to do in retail. That's not necessarily on our roadmap at this point in time, and when we get to it in a couple of years, it's going to have changed and evolved and a lot of that is still shaking out. So, we're not necessarily latching on to one particular thing, I wouldn't say.

Jason Fordham:               
Obviously, there's the focus on AI and machine learning. There's a lot of opportunity for us because the new set of data that we are basically bringing to a retailer that they've never seen, that is really, really interesting. The ability to tie in with camera systems, we've talked to another startup that's focused on camera, facial tracking. They have no identity of the customer, but they've got facial recognition. Some of these technologies are going to really shake the future of retail, but it's an amalgamation of all of them, which is where it's really unique for me. For us, the AI is going to be a very unique place once we start to drive even more. The word is always statistically significant quantities of data, so it's pointless at the moment because we don't have sufficient data.

Jason Fordham:               
Even one retailer, it takes a long time to aggregate enough data to make those models so compelling and so intelligent, but every piece of data we get, every time we add a new one, it just makes it a little bit more accurate and a little bit more interesting.

Mike Kelly:                         
For each of you individually, thing that you are learning right now. This does not have to be in any way related to the company. It can be, that'd be great, but a thing that you're most excited about learning right now that you're in the middle of reading, listening, playing, practicing that has you jazzed.

Casey Reagan:                  
I'd say, just constantly looking at the retail space, and seeing what's going on. I was talking to somebody about the technology in our platform and what some of the innovations are that we have in there, and they actually brought up that Starbucks recently applied for a patent to have drone delivery inside their stores. So, you order a coffee, you go sit down and a drone of some type will bring the coffee to you. So, just constantly being aware of what's going on in this space. Like I mentioned before, there's just all these different innovations and experiments people are trying right now, in the stores and just keeping abreast of that is keeping me really engaged and excited.

Mike Kelly:                         
Some ways that you stay current on that? Are there particular newsfeeds or places that you go, or Podcasts, or anything that you get your daily diet of that stuff?

Casey Reagan:                  
I don't have one particular place. There's a few people I follow in LinkedIn and of course I look at TechCrunch and things like that, but I wouldn't say any one particular spot.

Mike Kelly:                         
Right on.

Jason Fordham:               
For me, it's really more on the investment side of the house, and really the funding side of the house. This is what's probably the biggest learning exercise for me is, what's the process involved, what are the key metrics that angels at their stage look for, at the seed stage. Even though, I've been part of the [inaudible 00:46:23] in the past, really being this upfront and leading it, it's really been a major learning exercise for me and a very interesting one. So, I'm spending a lot more time following some of the top investors, reading their LinkedIn. I've always had LinkedIn, but I've never started my day with it and that's how I now start my days. For 20, 30 minutes every single morning, I get up pretty early ahead of everyone, and I just grab my iPad and I start reading LinkedIn and just clicking through the stories. Mostly I was trying to filter my list to show investors, angels, whether it's local, it's international and just reading what are the key metrics? What are the successful companies doing? That's really where my attention-

Mike Kelly:                         
If you could rattle some off of the top of your head, who are some of the folks that you follow that you find are maybe the most insightful, or gets you to think about it in a most impactful way?

Jason Fordham:               
So, right now I'm reading a lot on Mark Lore. He's probably the most active of all of them. My feeds are pretty littered with him. He provides a lot of interesting information, and a lot of it I can internalize and say, "Yes it's applicable, but not all of it." He's probably number one on my current list. There's really a myriad of others that I don't just follow one for [inaudible 00:47:43], but he's the one that stands out the most.

Mike Kelly:                         
Cool. I like it.

Jason Fordham:               
Even including the investment deck. That's probably where I liked his post the most.

Mike Kelly:                         
Thanks for sharing. Alright, if folks want to get in touch with the two of you, to learn more about Perfit or to maybe have you guys come in and give them a demo, how do they do that?

Casey Reagan:                  
Obviously you can check out our website at perfit.io.

Jason Fordham:               
Absolutely, or emails really great. It's Jason.Fordham@perfitio. F-o-r-d-h-a-m, just like the university.

Casey Reagan:                  
Yup, or Casey.Reagan@perfit.io. C-a-s-e-y R-e-a-g-a-n.

Mike Kelly:                         
Awesome. Guys, thank you so much. It was a blast.

Casey Reagan:                  
Thank you.

Jason Fordham:               
Thank you.