Would you be willing, or even able, to report to a company how much of their toilet paper you use every morning, whether you brush your teeth with their toothpaste twice a day as recommended, how many times a week you really do shampoo your hair, or how many glasses of wine you drink alone every evening?
The Hawthorne effect, or the observer effect, where the subject changes their behaviour because they know they’re being watched, is one of the biggest problems Consumer Packaged Goods (CPG) businesses face when trying to obtain data about how their customers actually use their products. While companies may have accurate data on sales and other factors around their product until the products leave the store, once they do, they’re pretty much left in the dark about how the product is actually being used. The best (and only) data they have to rely on post-purchase is the results of customer surveys and focus-groups, which rely on consumers accurately self-reporting their behaviour back to them: data that’s dubious at best.
It’s this gap between stated data and post-purchase usage data that Adrich helps businesses bridge, by effectively bringing the Internet of Things (IoT) to Consumer Packaged Goods.
So how does Adrich work?
Adrich founder Adhithi Aji describes Adrich as an “IoT consumer insights company” and “a business to business start up” that provides a “data driven approach to product development”, but perhaps founder-CEOs of digital products aren’t the best candidates for providing interesting and digestible descriptions of what their products really do. What Adrich is selling, basically, is accurate, real-time product usage data, obtained from consumers of CPG goods through a thin, flexible (and patent pending) smart label affixed behind a product’s regular label. So far, it’s found the most utility for manufacturers of food, beverage and cosmetic products.
The label creates a direct feedback loop with the business by simulating consumer behaviour data, connecting to cloud via Bluetooth, and transmitting it to the business through Adrich’s dashboard. It lets businesses know in real-time who’s using their product after its sold, where, when and how much they’re using it, when they’re running out, and whether interacting with consumers at various points during the usage experience (say, by sending them a survey or a coupon for additional purchases when they’re about to finish a unit) would increase their retention of the customer.
The results are both fascinating and functional. Aji mentions, for example, that they’ve been able to glean information like that the average consumer tends to run out of peanut butter between 10 and 11.30 PM, and that the average millennial finishes a jar of peanut butter in four days, whereas a member of GenX finishes one in ten days. This kind of data, besides being oddly intriguing and satisfying in itself, would allow manufacturers to create more streamlined brand categories and better products, like, say, a peanut butter snack bar targeted at millennials.
Knowing how long a certain amount of product takes to be consumed could also help businesses design better packaging. For example, if a certain amount of coffee is found to be consumed every five days, businesses could adjust the size of their packaging into five-day units, to make sure the coffee stays fresh for just long enough. The kind of rich and hitherto-unheard-of post-purchase data that Adrich provides allows businesses to engage in really meaningful, targeted and need-based product adjustment. With this amount of information, the possibilities are endless.
Adrich offers businesses two different kinds of packages. One allows businesses to merely collect consumer data, with different price points at different volume breaks, meaning a business can opt for data from 100, or 1000, or 10000 consumers, at their respective prices. A 100 consumer package would include 100 labels, data from 100 users, training and support. The second package allows for 2-way communication with the consumer of the product, like an automatic trigger survey at certain specified points in the consumption process. It also provides product users the option of automatic product replenishment when they’re close to running out.
Adrich is a great example of a start-up that could help other start-ups. Two years after Nielsen threw up that alarming statistic that 80-85% of all CPG launches fail, it also deciphered what sets apart the ones that go on to thrive: “tireless research about consumer circumstances”. Aji even describes her personal driving challenge as “find[ing] a way to help an entrepreneur,” and Adrich could go a long way in doing just that.
But what about privacy?
Does something about a business knowing when you use their product, how long you use it for and when you’re most likely to want more feel a bit invasive and creepy?
Aji points out that this kind of data is something tech companies already have in abundance. App developers are easily able to monitor how long a user stays on the app, what times they’re most likely to use it, how many times a day they open or close it, and the differences in how different age groups and demographics use it, allowing tech businesses to refine and innovate in accordance with customer usage. With physical objects, this becomes much harder, and that’s where Adrich comes in. When your laptop, phone and watch are privy to this kind of information, in this IoT age, the mind doesn’t have to take that huge a leap to imagine bottles and cartons accessing it too, although it is an idea to be treated with caution.
Rest assured though, as of now, your makeup and wine bottles aren’t spying on you without your knowledge. Adrich is (“currently”, Aji says deliberately) an opt-in service, where customers must agree to having their behaviour monitored by the smart label, and need to download an app to participate in the process. Aji says, however, that consumers seem more excited than intimidated by the concept, and are in fact eager to view data about their own consumption patterns.
Adhithi Aji, founder, CEO and new cool cat in Pittsburgh’s start up ecosystem
Aji, who holds a Masters from Carnegie Mellon University in Engineering and Technology Management, says this wasn’t always the product she set out to create. Always a lover of product and supply chain management, while she was at CMU, she set out to develop a direct-to-shopper, automated shopping research product, where customers would be alerted when running out of certain household products, and assisted in the process of restocking. Her early market research, which involved standing on streets and outside Whole Foods asking passers-by if they would pay for such a product, revealed that they were not, in fact, losing sleep over running out of salt and sugar, and certainly weren’t willing to pay enough for a service to keep track of it.
She decided to pivot, and discovered that while individual consumers may not care, brands have the problem of not being able to see to the end of the supply chain, were excited about the possibilities of her product, and willing to pay a much bigger price point. After a year at Expedient as a product manager, and some time at AlphaLab Gear, one of the top accelerators in the country, she decided to take the plunge, quit her job, and work work on Adrich full time. Some of her first clients were local bars and other businesses in Pittsburgh, like Maggie’s Farm Rum and Boyd & Blair.
Now a little over two years old, Adrich serves a numbers of manufacturers in and out of Pittsburgh, and products as diverse as makeup, spirits, snack foods, dog food and toilet paper, and Aji promises that they’re only growing bigger. While she doesn’t name any names, she mentions that their clients include one of America’s biggest cosmetic brands, headquartered in New York, one of Chicago’s biggest snack food brands, and the largest cleaning product business in Silicon Valley. Adrich is sponsored by AlphaLab Gear, and one of America’s most active seed investors, Innovation Works. A regular on lists of Pittsburgh’s hottest new start ups, Adrich also won the Pittsburgh Challenge Cup 2017, beating out 12 other competitors in the city.
Much like the IoT trend its part of, Adrich’s gaze is fixed firmly forward, and looking for both investors and more customers in the months to come.