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George Hladilo Address - Advantage Group SGM

Advantage Group Special Meeting of Shareholders
23 June 2000

George Hladilo, GM ADV E-commerce (Auckland), Advantage Group

The Internet is a gold mine for the point-of-sale. It lets merchants add new value to their sales process, and earn recurring revenues. The problem is that not many of them know this. Well, we’re doing something to change that.

Advantage has an e-commerce strategy of such epic size that we’ve called it just that: ePic. It stands for what it’s all about - electronic point-of-sale information and commerce. We’re bringing the Internet to the retail counter top.
Last month, New Zealanders logged on to the Internet 9,527,865 times. During that same time, the same people and a whole lot more used the EFTPOS network 33,000,000 times. Just imagine if the Internet could be brought to an audience nearly four times its current size. This is bigger than the Internet! This is ePic.

ePic is about increasing revenues and decreasing costs for the thousands of merchants that have been ignored in the explosion of the Internet.

How will ePic do it? Today, merchants have a device on their counter that accepts credit and debit cards, as well as many others. It’s called an EFTPOS terminal. It runs on the largest secure communications network in New Zealand. Advantage has supplied most of the infrastructure that runs this network, and 65% of all the EFTPOS terminals in use today.

ePic replaces this device with a smartcard-enabled web appliance called ICE (Internet Capable EFTPOS). In addition to all current payment services, we will offer new Internet services, which can be “turned on” in the same way as extra Sky channels. Just like the Sky model, merchants subscribe to ePic and pay a monthly access fee to get the services they need. Initial services will be receipt management, email, and advertising.

Merchants can capture and recall receipts whenever they need them. Using ICE they have instant access to their credit card receipts — cutting the cost and confusion out of having shoeboxes full of paper records.

Merchants can capture an image of the signed receipt using the touch screen, then print out a customer copy. The merchant copy is stored online in our secure database — and is accessible through ICE if a merchant needs to settle a dispute or help a customer re-order something.

You’re at work browsing the web looking for a place to eat dinner tonight. You find a place and email them asking for a reservation. The maitre-de reads this on the front counter using ICE. He replies back with the pen and on-screen keyboard to confirm your booking. After dinner, you pay for your meal with your credit card. The receipt is emailed directly to your home PC so you can load it into your personal finance package.

Email gives merchants a competitive advantage. It greatly improves customer service and develops customer loyalty!

People at a checkout normally wait for a couple minutes while their goods get scanned and bagged. Boredom creeps in and they start looking at the Reader’s Digest or Women’s Weekly. It’s then time to swipe their card. They stand frozen at the terminal watching the words “processing now” pleading for the word “accepted”. ePic turns all this into new revenue…

It’s highly likely that someone buying golf clubs in a golf shop will take notice of an advertised special for golf lessons from the local pro. With ePic, broadcast advertising is delivered straight to the ICE screen before and during a transaction, and is printed on the receipt afterwards. Every merchant is segmented and targeted with specific advertising for their store only. It’s an advertiser’s dream…

A one-to-one marketing opportunity with a captive punter that is spending money in a store they want to be in. Merchants charge advertisers each time an ad is displayed on their terminal. Advertisers pay premiums for this new focused advertising medium. Think of the new revenue opportunities available to a retailer like The Warehouse who takes over 1,000,000 transactions per month.
But wait, there’s more… further services include interactive loyalty and couponing, ticketing, stock ordering, even the ability for a merchant to manage their online store – all with ePic and ICE. All exclusive to Advantage.

How real is all this?

ICE has just finished a successful pilot and will be available for sale late in July at a similar price to the terminals it has just made obsolete. Merchants can do limited branding immediately, with full advertising and email services “turned on” before Christmas. Our aim is to aggressively replace all existing EFTPOS technology with ICE. We will drive this through our reseller channel with aggressive media and telesales campaigns.

More services will follow next year, as will the ICE 6000 with its large colour screen for more sophisticated solutions in large multi-lane environments.
Merchants can finally harness the power of the Internet. They can process orders. They can communicate with suppliers and customers. They can earn hard cash from selling advertising space. They can tend to their online store, adjust inventory, change prices, or make special offers - all in addition to their normal debit and credit card processing, but only with ICE.
Consumers view and print out special offers and coupons. They are informed of special promotions, sales, and loyalty programs. Advertisers finally have a focused one-to-one marketing tool, but only with ICE.

ePic preserves the way merchants do business today. It binds established business methods and practices with the Internet. ePic opens up new opportunities in a broader untapped market. It turns the Internet into a real medium for electronic commerce.

Thank you.


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