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May - 2013 - issue > siTech10 2013
Capillary Technologies Aspiring to be the Salesforce.com of Retail
Rachita Sharma
Sunday, May 5, 2013
2008 was an eventful year for Aneesh Reddy, Co-Founder & CEO, Capillary Technologies and his friends Krishna Mehra and Ajay Modani. Just as Lehman brothers was filing for bankruptcy the core team of Capillary Technologies, was procuring a $30k loan from its Alma Matter IIT Kgp to build cloud-based CRM software solutions for retailers. The team spoke to organized retailers, trying to understand the difficulties they faced in terms of customer engagement. Looking to work with emerging technologies, the team combined cloud, data analytics, mobile and social to come up with a reliable solution to power end-to-end Customer Engagement, Clienteling, Loyalty and Social CRM solutions.

Five years down the line, the company has some impressive numbers backing its success. Capillary is helping over 140 major brands across 10,000 stores globally bringing instant shopper gratification to a staggering 70 million consumers. To fuel the fire, Capillary has also received Series A funding of $15.5 million from Sequoia Capital and Norwest Venture Partners, a mammoth task achieved by few tech startups. What started as a small CRM software provider for Indian retailers has today become a global entity with a strong presence in over 16 countries such as UK, US, Singapore, UAE. The company is now on a spree to conquer the American retails and other consumer facing businesses falling between the 50 million to a couple of billion dollars category. Having found a niche for itself, Capillary is winning client after client owing to its cost effective solutions and guaranteed RoI.

The Initiation

As the world today is becoming increasingly virtual, consumers' shopping preferences are also seeing a shift. Users live on their mobile and interact through social networks. Retailers have moved online and are leveraging the power of e-commerce to boost sales. This trend was hurting the brick and mortar retailers who were still stuck in the traditional ways. Reddy spoke to over 50-60 retailers who were bogged down by dwindling sales and falling customer retention. After detailed research the team concluded that consumers did not like filling out forms or carrying loyalty cards. "We felt that the consumer attention span was short and the correct approach to combat these issues was to use emerging technologies like data analytics, mobile and social to make customer engagement more realtime," says Reddy. This is how the team zeroed down on building a reliable customer engagement tool which encompasses CRM, customer intelligence platform and campaign managers.

The company has taken an approach to prompt the consumer to purchase the right product at the right time at the right price point and through the right channel. Their CRM product help retailers improve sales and gain higher margins by intelligently collecting, analyzing and using data and running campaigns for customers. Capillary's Intelligent Customer Engagement (ICE) solutions suite integrates everything that consumer marketers and retail operators require to engage with their customers. The solution offers real-time, high quality data capture, actionable analytics, instant cross-sell solutions, and instant shopper gratification to generate significant ROI within weeks of implementation. By combining big data with a robust, cloud-based analytics engine, Capillary optimizes the relevance and profitability of discounts and personalized offers to consumers in real time, significantly increasing both loyalty and sales.

The company is so confident about their product's potential that customers are given an option of experimenting with the platform on a three month pilot trial. Owing to an impressive 3-5 percent growth in top-line and a 4-6x ROI on margins, that Capillary's enterprise clientele enjoys, almost all of the pilot trials convert to long term clients. As the company provides a SaaS based business model, clients need not make any upfront investment and have minimal resource burden.

A Cut above the Rest

The CRM market has several players and most of them are established names. However, their products are expensive and can only be afforded by the multibillion dollar retails, which are few. "Since most of the retails will fall in the $50 million to a couple of billion dollars segment, they cannot really afford $10 million per year solutions. Capillary was built to fill that space. We provide solutions as SaaS at a much reduced cost when compared to other vendors," says Reddy.

Catering to a wide spectrum of customers from SMEs to large organizations, Capillary not only offers a real-time, personalized loyalty and experience management through pre-integrated CRM, BI and Campaign management platforms but is also capable of CRM to digital, social and store integrations. Using Capillary's Managed Services like be-spoke or strategic analytics, CRM and loyalty consulting, businesses can avail end to end customer engagement from a single solutions provider, liberated from dealing with multiple vendors, cross-vendor business process management and worries related to integrating multiple expensive solutions to achieve a single view of the customer.

A company's true tout is manifested by its clientele and Capillary's clientele tells a compelling story. Their journey in India started with the Future Group and now they have the two largest retailers in almost all retail verticals as their customers. Today the company is helping global brands such as Pizza Hut, Puma, Jack Wills, Marks & Spencer, Benetton, Nike and Nokia to increase customer loyalty and drive business increments.

Reddy envisions aggressive growth in the upcoming years. From catering to 10,000 outlets, the company is looking to touch the half million mark. Their vision is to become the Salesforce.com for retailers. Even the toughest cynics would agree that with the perfect amalgamation of emerging technologies and an energetic young team at the helm, Capillary is all set to become the Numero Uno CRM solutions provider in the world.
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