I’m Overheer – Item Level RFID Startup Targeting the Apparel Retail Market

by Ben Yoskovitz on December 22, 2010

Overheer

Overheer is a startup founded in 2008 by Dan Sandler and Philip Lassner. The company designs and markets item level RFID solutions for retailers. Their current focus is on the apparel retail market.

RFID stands for radio-frequency identification. The technology is used to communicate via radio waves from an electronic tag attached to an object for the purpose of identification and tracking.

Overheer helps retail stores track inventory in real-time to increase sales and reduce inventory loss (through theft, etc.) RFID tracking in clothing is a contentious issue. Wal-Mart is rolling out item level RFID tracking, but privacy advocates are concerned about how much retailers can know about someone based on combining the RFID data with credit card statements, etc. Even with privacy concerns, it seems like item level RFID is gaining traction, especially in Europe where a number of large retailers have embraced the technology.

We spoke with Dan Sandler about Overheer, the benefits they provide and the future of RFID and their startup.

NextMontreal: What’s your background and that of Philip’s?

Dan: Philip and I are the co-founders of Overheer and possess complementary skills and intimate knowledge of RFID technology as well as the mid-level retail environment. Having worked hand in hand with major North American retailers such as La Senza, Sears, etc., Phil has leveraged his experience in the field of tags and labeling and has shifted his focus on offering existing and new potential clients state of the art RFID solutions. Having been on the sales side for software companies for almost a decade, I have a wealth of experience in sales and marketing and am confident in my abilities to put Overheer on the map as an RFID solution provider.

NextMontreal: How is Overheer funded?

Dan: Overheer is currently self and privately funded by the founders.

NextMontreal: Can you explain RFID middleware (a term you use on your site) in a bit more detail?

Dan: Overheer provides an end to end solution for a retailer wishing to install a store level item level RFID solution. Our system, Reflect, allows a retailer to get almost real time inventory data. Once that data is captured, it can then be used to help retailers make inventory based decisions in other systems. However most importantly, retailers only have a theoretical number on the store floor. Items go missing; they are misplaced, misfiled and stolen. We allow retailers to see when these items go missing and react immediately. This ensures full shelves and will lead to increased sales.

NextMontreal: What’s the core value proposition for Overheer?

Dan: Overheer helps retailers increase sales through the use of item level RFID. These increased sales come from improving out of stocks, and reducing markdowns. We want the retailer to have the ability to almost guarantee that when a customer comes to the store, they will leave with what they are looking for. We also help retailers increase inventory accuracy, reduce inventory carry costs and reduce labour costs associated with physical inventory counts.

NextMontreal: What’s the competition look like? What are retail apparel companies doing right now?

Dan: Our company is specifically targeting the mid-size retailer ($100M – $4B) in apparel. Our competitors are focused not only in the larger apparel market but in other industries as well. One strength is that we offer our solution as a RaaS (RFID as a Service) model. This helps the retailer reduce the infrastructure cost. Our solution also has virtually zero integration cost. By targeting two easy to integrate points, we ensure a smooth and easy transition to RFID. Our system has been designed with our expertise along with that of retailers. We have a system that brings into consideration what a retailer would want as well as our expertise in RFID. Probably one of our competitive weaknesses is that we are a small company. Retail apparel companies are beginning to have a high level interest in Item Level RFID. They are aware of its benefits, and many will start implementing an RFID solution in 2011.

NextMontreal: Who has implemented your system so far? Do you have case studies demonstrating that things are working?

Dan: Overheer has launched a very successful pilot in the Montreal area. We have also signed our first long term customer and are currently pursuing several more interested parties. We haven’t published any case studies yet, but happy to share some results. I can say that retailers who have piloted this technology have met all the goals I have mentioned previously, some experiencing incredible results.

NextMontreal: What’s the general cost for a retailer to implement your system?

Dan: Our solution is offered as a subscription. Depending on the size of the retailer, the price varies.

NextMontreal: Any lessons learned jumping into becoming an entrepreneur with Overheer?

Dan: Lessons learned…Wow have we ever learned a lot of lessons! One of the biggest lessons we;ve learned, is no matter how much time you think you have, it is going to take double that amount of time. Deadlines come and go, and you always want to finish something six months before that just isn’t complete yet. We have encountered this with not only our development deadlines but bank and customer deadlines. I think another thing we have really learned is to never give up. Keep asking and getting more suggestions and eventually you will find the answers somewhere. I can’t tell you how many times we had our back against the wall and by continuing to persevere, we found the right solution.

NextMontreal: What’s the focus for Overheer over the next 6 months?

Dan: We want to be the first company to have a North American wide rollout for Item Level RFID in retail. There is currently not a single full rollout. We do expect to bring on a few retailers for pilots as well. Finally, we are looking to push our company into the growth stage with a round of financing. Along with continual development of the product, we anticipate the next six months to be very busy for us.