Tech startup Humii reimagines 'mystery shopper' intelligence for the e-commerce era

From an off-the-cuff comment at a dinner party about the good old days of mystery shoppers giving valuable intelligence to bricks-and-mortar retailers, an e-commerce startup was born that is now challenging the status quo of using net promoter scores (NPS) to evaluate customer experience.

Today Humii has more than 700 retailers - including Lovisa (ASX: LOV), Super Retail Group (ASX: SUL), Strand and Oroton - using its aggregated qualitative data from anonymous shoppers to better inform decisions, and the startup is currently undertaking a $2.5 million seed round as it looks to mimic its Australian model in the UK very soon.

The world of e-commerce moves rapidly and so has Humii, which was first conceptualised by co-founder Lee Ritson after a dinner in late 2021 with his family-in-law who are involved with a couple of retail businesses and groups.

"There was an off-the-cuff comment that the amount of data that was getting kicked up the chain to owners, investors and the c-suite within these organisations was getting so incredibly difficult to digest," Ritson, a serial media entrepreneur, tells Business News Australia. 

"Someone said, 'wasn't it easy when we just used to send people into stores to mystery shops? We actually could get a proper gauge of customer experience.' Their point was that it's almost impossible to get that gauge within e-commerce.

"I thought surely there's a business out there like that; it's such a simple premise, somebody must be doing it."

He was half-right in that there are many Software as a Service (SaaS) tools, plug-ins, and companies that conduct surveys and provide mystery shopping, but Ritson believes 'nobody was actually doing this at scale across both offline and online, and rounding off the last mile with everything that was happening on the site as well'.

The next step was to catch up for a coffee with his engineer neighbour in Stanwell Park, a northern suburb of Wollongong that borders the southern end of the Royal National Park and lies just north of the famous Sea Cliff Bridge at Clifton.

That neighbour was 'into it', and thus Andy Evans became a co-founder with Ritson.

The pair both put in cash to get started while Evans used his skills to build a basic minimum viable product (MVP) of the platform.

"We basically picked 20 companies that we would want to start having a conversation with down the track. We onboarded a bunch of shoppers that were initially friends of friends and family, and got them to start shopping on these sites," Ritson explains.

"We generated the first sets of reports that were PDF exports, and we set up meetings with the CEOs of a couple of these groups, giving them early reports to see if this was data that they would find useful or helpful, and it was a resounding, 'yes, absolutely'.

"It was a very simple traffic-light-type system - we highlighted a few issues and just displayed it in a way that would be easy in a board meeting, noting a few key friction points in the business. We did that with a few people, and after getting some really solid feedback we started doing this on a more regular basis. That's when we started getting more serious on it, around March 2022."

Among the early believers was Mareile Osthus, who was digital projects director at Alquemie Group at the time and had previously worked at The Iconic, Oroton, and German retailers Zalando and Peek & Cloppenburg before that.

"She really loved the product and the concept and the idea, so she originally came over to work for us and really started driving the development side of the business," Ritson says.

"It became pretty apparent quickly that Andy’s pretty strong in the engineering piece and I’m more from the business and operations side of things, but in terms of retail experience, Andy and I weren't really strong in that arena.

"Mareile obviously has a long history and is very well connected and experienced within retail, and she came on and absolutely smashed it from a business development perspective. We all got on, it was a great fit, and we just felt that if we were going to actually go forward as a team, it felt right to bring her in as one of the founders."

At that point Evans was working more heavily on the SaaS product itself and the company started onboarding more shoppers, sales and operations staff and development teams, and around mid-2022 they undertook a 'family and friends' funding round to secure extra financial runway.

"We started putting our first contracts out in June-July last year, so we were getting a bit of revenue through the door," Ritson clarifies.

"Originally I imagined this was going to be a tool for CEOs predominantly, for investors effectively, but what transpired is a lot more people wanted to start accessing it - heads of e-commerce, heads of departments, heads of CX (customer experience), and the user base within these groups ends up being across multiple departments now."

Even though Humii now has a large customer base and 300-400 online shoppers on rotation via a time-flexible, automated system, Humii is constantly identifying key clients it would like to work with and putting in the analytical legwork in advance of negotiations.

"It leads nicely into it because we don’t have to integrate into any tech stacks – that was a conscious decision that we made, because it’s very easy for businesses to put you in the ‘too hard’ basket or put you in the product roadmap or say ‘no’, whereas if you actually turn up and you already have all the datasets built and ready to go, it’s much easier for the business to then subscribe to the service," he says.

"From a costing perspective, we've got an annual subscription for the full stack access to all elements within the platform, and we've got a lighter version where you access a portion of the dimensions within the platform as well to access the data."

He says the company now has 14 staff, in addition to the shoppers who cover a broad spectrum of demographics, from students to at-home mums.

"There's no time restriction on it. As a behavioural piece, it’s as you would if you were just shopping. You’re doing it at anytime, whether it's lunchtime or doing a bit at night, as long as the actual tasks are complete; it mirrors more of the actual real behaviour of what someone would be doing when they’re shopping," he says.

"We’ve modelled that with trial and error how to best task-assign, manage op-ex and the shopper side of things, because that was a challenge; if you're going to create a scalable business and you have humans involved, obviously that's something that you have to work out pretty early on. So we built out a good economics model with the shoppers."

Humii now plans to offer AI-enabled chat-like functionality alongside its new dashboard, which it expects will further empower retail leaders to quickly and easily find solutions to problems they didn’t even know existed.

"We founded Humii because we believe the NPS (net promoter score) system is archaic and one-dimensional," says Ritson.

"Retailers today need a modern insights and benchmarking solution to better understand the ‘why’ behind performance, remain competitive and drive real business impact.

"Unlike NPS, Humii takes away the guesswork, empowering decision makers to quickly and easily pinpoint problems and find solutions that will directly impact the bottom line. More than that, it provides the right kind of competitive insight to drive decisions that will ultimately grow revenue and market share."