While Amazon has been at the forefront of providing a personalized experience in online commerce, in-store retailers are still behind in using data in compelling ways to make the purchasing and shopping experience better in physical retail. Index, the new personalization and analytics company from the original members of the Google Wallet team, is hoping to change this. Today, the startup is announcing new funding and more details on the company's product. Index has raised $7 million in a Series A round led by Eric Schmidt's Innovation Endeavors, Khosla Ventures, AIMCo and 819 Capital.
At its core, Index wants to brick-and-mortar retailers leverage their physical stores as a competitive differentiator. Founded by former Google Wallet executives Marc Freed-Finnegan and Jonathan Wall, Index offers top-tier, brick and mortar retailers (as the Macy's or the Best Buys of the world) a software integration that plugs into their point-of-sale terminals. This helps these retailers actually recognize their customers across channels beyond just credit card history, and parse through the data from their purchase history both online and offline.
The end goal is for Index to then help retailers use this data create a more personalized experience. The software is downloaded on a retailer's point of sale, and can then link in-store, online, mobile and social engagement with the retailers. For customers who opt-in, retailers can deliver personalized service, similar to the level of personalization you get on Amazon.
As Wall explained to TechCrunch, "Offline needs the same tools as online, and they have the same data and interactions when it comes to in-store engagement and purchases. These retailers just don't have the technology to capture this technology, and use this data to help create a better relationship with their customers.
The software includes the ability to provide a linked identity and enable retailers to develop unified customer profiles and deliver truly personalized service. Data mining is another big part of the technology--with the hope of going beyond just targeting by checkout basket. Lastly, Index integrated with point of sale registers to apply coupons and rewards before a transaction is complete.
For example, Index's software could help a retailer pull up purchase history when a customer swipes their credit card at a store. So a cashier will have knowledge of past purchases, and the point of sale could even make a personalized recommendation for a product on a receipt that reflects past purchases. Index could also help retailers start mining in-store data and connect with customers online. So if the customer registers an email to have a receipt sent for an in-store purchase (which is common these days), the retailer could send an email with past purchase industry, and recommendations of future purchases. Retailers could also offer deals and coupons for in-store purchases that are targeted specifically to potential items a customer would buy.
Another example of Index's technology is in working with retailer's mobile app. So a retailers could integrate Index's technology into their app, and if a customer has downloaded the app, they would be automatically checked into the store once they are in the vicinity. The customer will receive a personalized feed in the app, save items, access exclusive coupons and more. Index is also tackling the point of sale--if the customer is on the app on a verified phone when they go to pay, they simply have to enter a PIN into the point of sale (as the second factor of authentication, in addition to the phone), and the transaction will go through. Any coupons in the user's account can be automatically used as well. On the retail end, a store could equip their sales associates with iPads that can show who has entered the store, what they have bought in the past and more.
As for the business model, Index isn't giving away too many details but says they get paid if the retailer is able to sell items through their technology.
While Index doesn't have any big-name retailers on board yet, the technology is being used by a small chain of cupcake stores in San Francisco.
Investors are betting that Index may be what big-box retailers are looking for. Investor Vinod Khosla said in a statement, “Index gives brick-and-mortar retailers an Amazon-like toolbox for managing customer data and relationships. It’s the exact solution sophisticated retailers need to stay competitive and this is the perfect team to deliver it.”
“The Index team is uniquely positioned to help retailers measure and improve their marketing impact,” says Eric Schmidt, Founding Partner at Innovation Endeavors. “Google Wallet was an early beneficiary of the founders' technical know-how and critical execution skills. Now other retailers can benefit, too.”
Advisors includes Whole Foods’ former senior vice president of purchasing, marketing and distribution Michael Bensacon; former Jamba Juice CEO and Burger King CMO Paul Clayton, and Michael Dadario, who worked for more than 25 years for home furnishing and fashion retailers like West Elm, Williams-Sonoma Inc., J.Crew and Banana Republic and Gap. With this network, you can safely assume that the startup is probably in pitching its technology to quite a few well-known brick and mortar retailers.
Index isn't the first (or will be the last) to try to bring analytics, mobile payments and personalization to the in-store retail experience. PayPal has been aggressively trying to help integrate into point of sale for retailers like Home Depot and Jamba Juice. Square has its deal with Starbucks, thought hasn't announced any other partnerships to date. The Index team acknowledges the competition but truly believes that their technology is the most well-rounded to actually driving in-store visits, and incorporate data beyond the payments system.
The San Francisco-based company says it will apply its Series A funding to supporting the company’s continued rollout with retailers and the growth of its team.