Google Inc. and Apple Inc. have been investing in map technology in recent years, but most of the startups they’ve acquired–like Waze and Embark–help people get around cities and highways. Is the next frontier for map technology the great indoors?
A St. Louis startup with 15 employees,Aisle411 Inc., has just raised $6.5 million in Series A funding to help people find what they need in stores, especially at groceries, pharmacies, home improvement and big box retailers, says founder and Chief Executive Nathan Pettyjohn.
In order to give directions to smartphone users in search of an item in stores, Aisle411 integrates with the inventory software used by retailers and uses proprietary data management systems and mapping engines.
The startup’s clients include Walgreen Co., Home Depot Inc., Hy-Vee Inc., Schnuck Markets Inc., Shop ‘n Save St. Louis Inc. and Price Chopper (The Golub Corp.), and others. Such retailers use Aisle411 to power store-branded apps of their own, though the company does offer a consumer-facing app as well.
Will indoor mapping ever be as big a business as navigational apps for traffic and travel? A senior analyst with Forrester, Tony Costa, said that from a consumer perspective, “the need is simply not as crucial.”
But Mr. Costa also believes indoor mapping is becoming increasingly important to retailers and advertisers who want to bring powerful data measurement, analytics and marketing capabilities to brick-and-mortar stores and other venues like college campuses, airports or malls.
Retailers pay Aisle411 about $1 per store per day to be able to offer its inventory-meets-map tech. The company’s co-founders said they will use some of the new funding to roll out real-time information about what’s in stock and where, and new reporting capabilities for retailers.
Retailers lose about 20% of potential sales due to shoppers’ navigational woes according to aisle411 research. “The larger the footprint of a store, and the less frequently a shopper shops, the more of a problem that is,” says Mr. Pettyjohn, referring to some big-box retailers and electronics and home-improvement stores. He added that navigation remains a challenge even for “regulars” at a neighborhood grocery, when they want to buy items that are not part of their regular shopping list.
Mobile industry analyst Chetan Sharma says so far, European retailers have used indoor wireless and mobile technology more often, and more masterfully than their U.S. counterparts. For example, Mr. Sharma said, European stores commonly apply smartphone-readable NFC tags to their shelves to give shoppers more information about an item there. They also use digital signage and digital shopping carts that display customized in-store ads or coupons, respectively.
Cultivation Capital General Partner Cliff Holekamp, an Aisle411 investor, says the St. Louis venture firm expects the company to ramp up sales of its software-as-a-service within retail, with the goal of attaining 25% market share among groceries in the U.S. in the next year.
He sees an opportunity for Aisle411 to go beyond mapping and to offer contextually relevant coupons and deals in stores as well as other location-based services.
Aisle411′s potential competitors range from Point Inside Inc. and FourSquare, to map software developers like Meridian, acquired by Aruba Networks in May this year
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