Local search company NearbyNow has built a unique model that helps shopping mall retailers bring in foot traffic by putting their product info and inventory online. A longer description of the company’s model is in a previous post on The Kelsey Group blog.
Building off of this, the company has developed a mobile (SMS based) tool that lets mall shoppers search for deals while they are in the mall. This not only has the benefits of proximity and captive audience, but it utilizes a mobile medium that is well suited towards the very demographic it is targeting – the mall rat demographic (for lack of a better term).
Surprisingly, this has also proven to catch on among another large demographic of mall shoppers, according to CEO Scott Dunlap: the soccer mom.
“Moms are learning how to text message,” he said. “Either American Idol has taught them, or in some cases, It’s the only way their kids will talk to them over cell phones, so they’ve learned how to do it out of necessity.”
The company’s main offering is a private label local shopping research and inventory search engine that powers mall partners’ websites. The gating factor to its expansion has thus partly been the malls that it signs on as partners. It has been able to do this at a steady clip over the past six months with a handful of major shopping center corporations such as Westfield. It is currently present in 20 U.S. cities and it plans to be in 103 cities by November.
It also places kiosks within these malls that let shoppers look up deals or print out coupons. There are also display ads on these terminals for actual products or stores that can be steps away. This proximity factor leads to unusually high CPM rates according to Dunlap
“With a banner ad for a pair of jeans that is 100 yards from the store, I’ve seen CPMs north of $125,” he said. “People understand the value of proximity.”
The next steps for the company include building in social and personalization features to its online and mobile products that let users search for and save items they want, and also share them with friends.
“Someone can form a back to school list and send to their parents,” said Dunlap. “This summer we’ll be experimenting with that.”
This could also involve alerts, where a shoppers are notified via text when an item becomes available or a sale happens with a particular item or store. With this type of alert, users explicitly state what they want and implicitly state that they are ready to “pull the trigger” if the item is available. This implies a very strong and clear intent to buy which, combined with the proximity factor, helps Dunlap continue to prove the company’s value proposition to mall retailers.
The company is moving in some interesting directions and also raised $5 million earlier this week. It should be able to hit its goal of 100+ cities by the ’07 holiday season.