Five days before Christmas, and chances are your local shopping center looks like the Battle of Verdun, only with tougher parking. What would you give to be able to find out, without setting foot in that seething mass of frazzled parents, crying kids and overworked sales clerks, whether that set of barbells your Aunt Fanny had her eye on was available, and maybe even on sale?
NearbyNow wants to give you that chance to search products at your local mall in comfort, and not just from your desktop either. Besides offering desktop-based Web search of selected shopping complexes—three in California and one in Arizona--, the Mountain View Ca-based start-up has just begun test deployments of a mall-centric mobile search solution via text messaging.
The idea for NearbyNow began to take shape in 2005, says CEO and founder Scott Dunlap, a tech veteran with experience in retail data-mining and CRM software. “It was born largely out of personal frustration,” he says. “I couldn’t find out who sold the gift items I wanted to examine and buy. I’d worked enough with retailers to know that the data is available; it’s just that each retailer has it tucked away in his system, so it was impossible to find.”
He had seen research from Gartner Group and Forrester Research suggesting that as much as 55% to 60% of online product searches resulted in an offline purchase, and consumer interviews persuaded him that the proportion was correct. So Dunlap began working on a search mode that would integrate tightly with location. “I thought there was an opportunity here to take people who were browsing online and point them to stores in their area,” he says.
The most practical way to tackle that job was to restrict the search to individual shopping malls. People headed there already have a clear buying intent, so anything search can do to focus their browsing and highlight retailers with the specific items, sizes and colors they want should be particularly effective at driving foot traffic and sales conversions.
Then too, working with malls meant working with mall operators. A fairly small group of these—companies such as Westfield and General Growth Properties— run most of the large shopping malls in the U.S., so once NearbyNow proved its concept in a few test deployments, rolling out nationally could be a greatly streamlined process. Indeed, the company expects to expand to 20 malls around the country by April and to have 100 in its client base by this time next year.
NearbyNow creates a central Web site for the entire shopping center, then compiles as much product data as it can from the individual stores, primarily from data feeds from the retailers themselves. Consumers are brought to the sites through location-based product searches such as “San Jose jeans.” Once on the site—in this example, the Westfield Oakridge Mall in San Jose—they can search the site for the product of their choice, look for brands on sale anywhere in the mall or check for stores by name.
That jeans search in Oakridge brings up a product page listing what must be almost 50 stores, with links for store info and maps. Many of the store listings are of the featured type, with logos and photos of the top three jeans offered (an ad revenue stream for NearbyNow). Visitors can click on the photo to enlarge or click a link to see all 89 matches for jeans sold by the Oakridge Aeropostale store. (It must be noted that down toward the end of the “jeans” results, some of the listings were for other products that simply used the word in their creative copy.)
Besides enhancing their listings with photos and logos, retailers can add promotions and coupons to their NearbyNow listings. Consumers can simply mouse over a small sale or coupon icon and get the offer details before clicking on to the mall store’s page. The product pages also run display ads and suggest ways visitors can refine their searches by category or brand.
One premium listing feature that’s proven especially popular is the ability to reserve an item online for offline purchase. When users locate the item they want and the store that sells it, they can specify the size and color they’re interested in, set their confirmation channel (e-mail or text message) and estimate when they’ll come in to buy and pick up the item. NearbyNow will check with the retailer to make sure the right item is available and arrange to have it placed on hold.
In mid-December NearbyNow took the browse-to-buy connection even further with the launch of its mobile search service in the same malls for which it had built Web sites. Notices on the walls and display directories tell shoppers that they can send a simple text message to the short code “Nearby”, then type in whatever brand or product they’re looking for to see how many stores in that mall carry the item, along with the three or four most popular matches.
“We saw two behavioral opportunities for mobile search of malls,” Dunlap says. “Many malls are so big that they’re just very hard to navigate. And if the store you’ve chosen doesn’t have the item you came for, how do you figure out who else nearby might carry it?”
And with the mobile feature, NearbyNow “backed into” an opportunity to do location-based contextual mobile marketing, he says. “We looked at our dashboard and suddenly realized that we had all these consumers telling us what they wanted to buy at that moment. And they were already in a mall, so the intent to buy was about as high as one could hope for.”
That gave NearbyNow the chance to send those texting shoppers sale info for relevant mall stores and “spotlight specials”—time-limited offers designed to drive customers into the stores. “Just last weekend we ran a promotion to our mobile search users at one location that the next 20 people who bought something at Journeys Shoes would get a free iTunes gift card with their purchase,” Dunlap says. “You could just look across the mall and watch people pick up their phones, read the message, then turn around and start making their way to the store. It was pretty amazing.”
NearbyNow is careful to keep the mobile marketing effort as pain-free and unobtrusive as possible. Consumers are notified in the first text message contact that they might receive a few promotional offers and are given a simple way to opt out of that contact if they wish. Those who don’t opt out receive a maximum of two to three marketing messages per hour—a hard rule to impose, Dunlap says, because retailers tend to want to fire out a barrage of offers and promo messages. Messages can be blasted to all the permissioned shoppers in the mall or contextually targeted by product category or retail store.
NearbyNow also assumes that a shopper who signs into the mobile search has just arrived at the mall and will stay for 90 minutes. When that time elapses, and if the shopper has not been heard from again, the messages stop. “It’s a very new service, and we’re still trying to design the right kind of consumer experience,” he says. “For the retailers, limiting the access to marketing messages, rather than taking the direct-mail approach of hitting them as much as you can afford to, makes them think harder about the best dayparts and the best offers for mobile marketing.”
Right now, the mobile search ads are sold on a cost-per-thousand (CPM) basis, but a bid model might be in NearbyNow’s future, Dunlap says, especially if demand outstrips supply during peak shopping times such as holidays and back-to-school sales.
NearbyNow is still watching both the online and mobile channels to see which holds the most potential both for users and for retail advertisers. The value of the online mall search is immediately evident to retailers, Dunlap says, and most are signing up mainly to tap into that function, with mobile search simply thrown in.
“But with themobile service launched only a week and a half ago, we’re already seeing a natural split in the retailers,” he says. “The new guard, particularly those whose primary clientele is between 13 and 30, are jumping on the mobile service. J.C Penney and Sears—they’re not so sure.”
But Dunlap is betting that in the course of time, mall merchants of all stripes will come to see the value in letting shoppers right outside their doors search their inventories and find their special offers. “In two years, I’m sure that the mobile solution will dwarf the Web solution," he says.
