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Ontario firm brings high-tech vending to the world

A Signifi vending machine at Canada Post.

Christopher Mountain

Who knew that a chance encounter with a government self-service machine would put Shamira Jaffer on a path to success?

But that's precisely that happened when Ms. Jaffer, who today is the chief executive officer of Signifi Solutions Inc., which makes automated retail kiosks in Mississauga, Ont., used a touchscreen device to renew her driver licence more than a decade ago.

She admired the simple interface and realized its potential just as touch-driven devices such as the iPhone and iPad were going mainstream. She founded Signifi in 2005 with the hope of capturing a piece of the automated kiosk market.

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"I saw a change in the music industry moving from CDs to digital," she explains. "So, we built a machine that allowed you to pick songs and burn them right away onto a CD for 99 cents a song. For the photo industry, we built machines where you could connect your phone and print photos. Then we moved into DVD rentals."

Not satisfied to stop there, Ms. Jaffer looked to the next big automated kiosk trend. All signs pointed to retail and Signifi soon found a profitable niche. "We thought we knew a lot about robotics and user interfaces and how customers use self-service, so we wanted to find a way to help retailers," she recalls.

Signifi shifted its model to produce highly automated retail vending machines such as those found in airport concourses, dispensing everything from headphones to iPhone cases to gift cards. Its long client list includes retailers such as The Source, auto manufacturer BMW and credit-card giant MasterCard.

But Ms. Jaffer soon realized that although there was a market for her machines in Canada, greater success would come from exports. Almost immediately, business customers in the United States – who she says are more apt to invest in cutting-edge technologies than their Canuck counterparts – found Signifi via its website and placed orders.

More than 90 per cent of the firm's revenue soon came from business in the U.S., with the remainder domestic. That ratio has remained steady, and now Signifi's machines can be found in markets as diverse as Europe, the Middle East, Asia and North America, a change that occurred about four years ago when Ms. Jaffer and her team decided to venture farther abroad.

While Signifi is a privately held company and doesn't disclose its financials, Ms. Jaffer says revenue growth has doubled year-over-year and is poised to increase by an impressive 60 per cent again this year.

So, how did a company with only 25 permanent employees in Canada and six contract salespeople manage to build an export-focused manufacturing powerhouse, particularly when so many other Canadian companies struggle to compete in international markets?

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In Signifi's case, the answer was to move slowly and leverage lessons from selling into the United States before applying similar tactics overseas. That meant thinking globally, but acting locally.

"What we decided at one point was we needed a salesperson working out of the U.S.," Ms. Jaffer recalls, noting how, in her experience, Americans tend to prefer doing business with firms that have a local presence. "Now, we have a guy stationed in Pittsburgh who handles U.S. sales, and a U.S. representative based in Toronto. If you're American or have lived in the States, it's much easier to sell to another American. They build relationships quickly and it really makes a difference."

The moves worked. The company has since hired representatives in Britain to handle international sales with the goal of replicating its success.

But Signifi's first major foray abroad came with challenges. After a prospect in Dubai showed interest, it placed an order – and delivered a lesson in cross-cultural business realities.

Because Signifi had never dealt with the client before – or anyone in the Middle East, for that matter – Ms. Jaffer requested a 50-per-cent deposit with full payment due on shipment of her kiosks. The client, having never dealt with Signifi, balked at the request. With the deal at an impasse and in peril, she looked to a government agency for a lifeline.

"We went to Export Development Canada and they guaranteed that our customer and us would both get paid," she says of EDC's credit insurance program, which insures receivables and deliverables on international sales by Canadian companies. "They really supported us and got us going as a company and helped us create a trust factor."

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It wasn't the only time Ms. Jaffer leveraged government help, which she says has been critical to success abroad. Her firm has also built strong ties with Canada's trade commissioners around the world and tapped EDC funding. The company to date has not used third-party investor funding.

In addition to working with trade commissioners, businesses should also build relationships with bilateral chambers of commerce, says Igor Chigrin, founder of the Toronto-based export consultancy Win Global Partners.

"If they select China [as an export market], they should join the Canada China Business Council," he says. "There are chambers for every region … and their mandate is to facilitate and increase the volume of trade between their respective countries. Joining those chambers is a great tool and is within the budget of any SME [small and medium enterprise]."

Ms. Jaffer says that her company's export focus has even helped drive product innovation.

In the Middle East, for example, deep-pocketed customers want the latest and greatest technology, so they pushed Signifi's engineers to come up with bigger, better and more feature-laden versions of their machines, which top out in price at $35,000. "They have the money to pay for all these customizations and new features … and it puts us ahead of the game compared to the rest of the world."

The challenge of doing business in the region, she concedes, is that those same customers typically wanted her equipment immediately and were often impatient to wait the 12 weeks needed for manufacturing and shipping. They eventually came to accept the timelines needed to deliver the complex machinery. But the demand for changes to her business didn't end there.

Signifi's push into diverse overseas markets also forced Ms. Jaffer to deepen relationships with local service providers. The reason: Nervous foreign clients demanded local support and service. While Signifi's robotic kiosks are WiFi-enabled and can be adjusted from the company's Mississauga office using real-time communications, they're full of moving parts that require regular service.

To allay concerns, Ms. Jaffer hired three robotics maintenance firms that could work around the world.

Now, with a growing global presence and increasing sales, Ms. Jaffer has no plans to slow Signifi's push into new foreign markets, particularly European centres such as Belgium, France and Germany, where demand for automated retail is on the rise.

To do so, she plans to continue leveraging Signifi's ever-expanding international service infrastructure, not to mention Canada's strong global reputation, as she looks to put the symbolic heft of the maple leaf to work to her advantage – particularly in more challenging markets such as the Middle East.

"We benefit because we're in Canada instead of the U.S. when dealing with the Middle East, but the support infrastructure has to be local," she stresses. "They need the security of knowing you're not just going to walk away."

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