VSBTLY has formalized its convenience store agreement with Grupo Modelo and Retailigent Media. The three parties signed a letter of intent in December, indicating that they would work together to bring an in-store media network to as many as 50,000 Modelorama convenience stores and independent bodegas throughout Mexico.
Those plans are now moving forward, with VSBLTY indicating that its technology will be installed in 5,000 locations before the end of 2021. The deployment will include computer vision cameras that will capture the demographic information of people in the store. That information can then be analyzed to optimize retail operations, and to go after shoppers with targeted in-store advertisements that will appear on smart displays. The cameras will also enable surveillance and improve security outcomes in real-time.
While the details are similar to those discussed in the original letter of intent, the final version of the agreement is much more aggressive with regards to international deployments. The original letter focused almost exclusively on Mexico, hinting at a possible expansion in the later years of the contract. The final agreement, on the other hand, indicates that the international expansion is already underway, with active deployments in Colombia, Peru, and Ecuador in addition to Mexico. The parties now plan to roll out the network throughout Latin America.
“We have started contracting media time to consumer-packaged goods brands to advertise to Latin American shoppers right at point-of-sale where buying decisions are made,” said VSBLTY Co-founder and CEO Jay Hutton.
“We have a long-standing working relationship with VSBLTY and we are partnering with RADAR App to support in-store security in each of the stores we plan to develop,” added Retailigent Co-Founder and CEO Rodrigo Velasco. “We will be working together to help Grupo Modelo create a new revenue stream for their stores, improve security, and become an attractive media channel as well.”
VSBLTY will collect revenue from the licensing fees for its software, while VSBLTY, Retailigent, and Grupo Modelo will each take a third of the advertising dollars, which are expected to come to more than $200 million in the first five years of the operation. Grupo Modelo will also receive 15,500,000 common share purchase warrants from VSBLTY, which can be exercised for a five-year period at a price of CAD $0.84 per share. The first 15 percent will vest immediately, while the rest will vest as the three parties pass certain milestones with regards to the number of deployments. The companies hope to be in 50,000 stores before the end of 2024.
The Modelorama chain is run by Grupo Modelo, which is in turn an AB InBev subsidiary. VSBLTY’s technology has previously been deployed in a chain of Mexican pet stores, and is being used in a smart city surveillance program in Mexico City.
March 15, 2021 – by Eric Weiss