A number of Winning Brands shareholders have asked about the business model of our Tech Division, GestureTek. Several of the questions deal with what the GestureTek “subscription model” is, and what I mean by “advertising revenue” when I discuss our plans. It is worth the effort to understand the answer, below, because it reveals why the refreshed GestureTek business model is so attractive.
In the past, GestureTek’s interactive projection equipment was sold to end-users. This included a variety of institutions and retailers. These organizational customers would use GestureTek patented equipment to create interactive engagement with the public in their environments. Typically, this engagement would be to support the organization’s own brand identity. GestureTek equipment was purchased and paid for by the enterprise customers outright. It was then used for the enterprise’s own purposes (with GestureTek’s customization assistance). The revenue in this model is not recurring (i.e., continuous from the same source).
The GestureTek website, link below, shows many successful installations in which GestureTek technology brings new life to plain surfaces for our customers, such as flooring, walls and tables. The site has embedded videos showing GestureTek in operation.
Now, as part of the Winning Brands group, (OTC:WNBD), GestureTek is updating its business model to include Subscription Placement of some GestureTek equipment.
This means that GestureTek will now also create collaborations with retailers in which GestureTek equipment will be installed as the property of GestureTek and will be paid for via revenue sharing of advertising dollars in suitable settings. The addition of Subscription Placement to GestureTek’s business model has the potential to boost sales revenue to GestureTek considerably on a recurring basis. The recurring nature of this revenue is a key insight in understanding the appeal of GestureTek’s updated business model
In Subscription Placement, the following is the ideal scenario. The ideal setting for Subscription Placement is a retail environment in which competitive consumer brands are sold, such as convenience stores, grocery stores and shopping malls. Most of these environments, today, are increasingly sophisticated. Much money has been spent by consumer packaged goods companies (and stores) to improve the appeal of the products on offer there. Lighting, display stands, shelf-merchandising, and packaging are only four examples of where a great deal of investment is being made at point-of-sale to increase sales turnover. The setting is highly competitive for consumer packaged goods brands. Every advantage matters.
GestureTek’s CUBE technology is well-suited to this environment. GestureTek CUBE is a Plug & Play piece of equipment that sits securely on the floor (or stand), tucked out of the way. The GroundFX/WallFX versions of this device can be ceiling mounted.
The GestureTek CUBE projects a brightly lit interactive range of images with motion and sound, that consumers interact with. The world’s foremost consumer behaviour research organization, Nielson, through one of its research divisions, determined that GestureTek equipment, specifically, impacts consumer behaviour positively. Shoppers gain better recall of participating brands, think more highly of these brands and even stay longer in these retail settings because of the interesting nature of GestureTek interactivity. These effects lead to to higher sales for the merchant and for the consumer product brands. In this way, GestureTek delivers a premium marketing experience to those consumer brands.
GestureTek is now reaching out to retailers to introduce this premium experience to stores in order to share the advertising payments that brands will make for this premium experience.
As we “fine tune” our operating protocols to accommodate Subscription Placement in these settings, we will optimize the supportive mechanisms needed to function smoothly on a growing scale, such as service arrangements, flow of payments, revision of GestureTek system content, etc. This is the work in progress now.
Already, GestureTek systems have been designed to let participating retailers select from a menu of relevant items contained within their systems. This selection is accomplished by activating a displayable control panel. Entirely new image content can also be delivered to the GestureTek CUBE units, by a variety of means, including via internet downloading where appropriate. Some retailers prefer to receive updates off-line to protect their IT systems from outside influence. GestureTek systems are adaptable. The GestureTek system control panel is shown below.
There are hundreds of thousands of suitable commercial settings for GestureTek Subscription Placement. GestureTek’s business model can be highly rewarding with activation of even a small fraction of this total market space, delivering millions in recurring revenue to Winning Brands GestureTek stakeholders.
Winning Brands GestureTek are in the formative stage of this refreshed business model, and are therefore at the highest risk stage. There will be obstacles to overcome. However, the potential is vast to deliver excellent, profitable, service to our retail partners, our consumer product brand collaborators and to the public – whom we all serve in the end. This high-service potential is the reason for our enthusiasm and confidence that the GestureTek Subscription Placement business model is a win-win for everyone it touches. GestureTek will certainly be driving continued innovation in this field, now as part of Winning Brands.
Sincerely,
Eric Lehner, Chairman
Winning Brands GestureTek
