Kachingo, a customer rewards programme launched last week, runs on the Linux operating system because, creator Chris Berryman says, “you can imagine what the cost would have been for Microsoft licences”.
The project, four years in the making, involves 500 individual retail premises and 1700 point of sale terminals.
“Linux has worked very well and we’ve done some things that haven’t been done before with it,” says Berryman.
Kachingo is one of the biggest deployments of the open source operating system in New Zealand and if plans to roll out the scheme in other parts of the world are successful, it could be a significant global Linux-powered system, Berryman says. “In a 2000-store chain, running Linux will be a big change.”
The system is centrally hosted in Wellington by IBM and Berryman explains the workings of Kachingo as “there’s a server or PC in each store, depending on the size of the store, connected to the point of sale terminal and we read the transaction and feed it to the printer”.
The printer spits out a Lotto-like ticket with several lines of numbers called gamelines.
“To get one line of Kachingo, you have to spend a specified minimum amount or buy goods on Kachingo promotion,” says Mary Vance, managing director of Global Online Promotions, the company that runs Kachingo.
Kachingo has been run in SuperLiquor stores since last year and was launched at BP, KFC and several supermarkets last week. The original idea was conceived by Berryman, who describes himself as “an entrepreneur who has run several companies and been in property development”, while he was in Las Vegas operating Datacom, a US-registered company which produced real-time technology solutions for the city’s gambling industry.
“I was quite amazed at the technology and though there must be a way to apply the gaming psychology to in a non-gambling format suitable for retail rewards scheme.”
He calls Kachingo a rewards scheme, not a loyalty scheme, because shoppers can win instant prizes rather than accumulate points.
Berryman worked with IBM and CSI on the early stages of the project, which was funded by himself and private investors.
Later, Global Online Promotions was formed, with the original investors selling to the present shareholders, Eric Watson-run Cullen Investments, Strathmore, Lloyd Morrison and Global Online management.
Kachingo will generate cash for the retail good and cash prizes by charging participating retailers for the gamelines on the tickets, with the investors and retailers providing cash and goods until the cashflow from gameline sales is sufficient.
Most of the other software besides Linux has been developed specifically for Global Online by a CSI subsidiary, GoTech, and the Kachingo platform can be modified to include customer management, reporting and inventory control applications, Berryman says.
The success of the rollout in New Zealand will determine how and when Kachingo is introduced to other countries, he says, “but we have had interest from major overseas retail chains and have offices in Sydney and San Francisco”.
IT spending on the project so far has been around $10 million, he says.