St. Louis based Aisle411 wants to make shopping retail as slick as Amazon.
Like many startup stories, the Aisle411 story began with a frustrated founder.
“It really started when I spent 10 minutes looking for a surge protector in a home improvement store,” said Nathan Pettyjohn, founder and CEO of Aisle411. “Three guys sent me all over the store. Someone else walked in, looking for a grommet. A $2 item. The sales associate said, ‘What’s a grommet?’ And the customer just left, pissed off. I walked out of there thinking, ‘You’ve got to be kidding me. This is ridiculous.’”
With a background in advertising and serving the retail industry, Pettyjohn had the idea for a mobile app that could combine Google-like search and AdWords capabilities with store maps. This was in 2007, at the same time as the first iPhone was hitting the market.
Today Aisle411 services are available in over 225,000 stores nationwide, including in chains like Walgreens and HyVee, according to their website.
“We’re on a mission to create the same sophistication you have on an e-commerce website in a physical store,” said Pettyjohn.
Building the Internet of Stores
Since retail stores already have inventory systems, you would think hooking up that database to an app would be easy. It’s not.
“They data we get is typically very messy,” said Pettyjohn. “If we’re lucky there might be a nice product name. We have scrub all the data for normal search taxonomy because 80% of what people put on their shopping list is generic–butter, cookies, whatever. The way Google crawls the Internet doesn’t really work that well when you’re working with really rough data.”
Aisle411 has spent a lot of time doing the hard work of turning an enterprise system into an intuitive consumer experience. That’s something not even the major chains have figured out.
“A lot of retailers come to us and say, ‘We could probably do this ourselves,'” said Pettyjohn. “One of the biggest retailers in the world told us that two years ago after we did a pilot with them. They just came back to us and said, ‘We thought we could do this, but it’s a lot more challenging than we thought.'”
Pettyjohn said the retailer had invested millions in the project.
With their basic consumer-facing engine, Aisle411 can offer customers recommendations based on their location and grocery list. On the analytics side, retailers and brands can get detailed sub-meter tracking of buyer behavior. Linger in front of a certain type of cookie but don’t buy? Tomorrow you may get a coupon for them.
The power of this technology is worth millions to brands and retailers that depend on customers buying those one or two extra items at the checkout.
“I wouldn’t have expected Walgreens to be one of our early customers,” said Pettyjohn. “But Walgreens saw us beginning to implement this with grocers and they said, ‘Our business was built on convenience, and we cannot lose a leg to anybody.”’
Image recognition for shelf space
Once the team got into the data, they found out the retailers’ data about their own stores wasn’t that great.
“We asked ourselves, ‘How can we be better than the retailers’ data?'” said Pettyjohn.
They started sending in people into stores to take pictures of different sections, and they found there were items on the shelf that were not in the data. The decided to find a way to automate the process using image recognition technology. It took them over a year of development to achieve 90% accuracy.
The project was originally meant to improve their own app, but they found that brands were almost more excited about the image recognition technology than anything else they were working. Brands pay millions of dollars to have their products on certain shelves, but neither the store nor the brand have a good method of verifying that–which can cost companies hundreds of thousands of dollars in sales.
The service is now called Shelfalytics and is launching in Canada with Mondaleze, the parent company of brands like Oreo, Ritz and Nabisco.
Making all commerce digital
When consumers shop online, businesses know where those customers came from, what ads they clicked on, how long they spent on a page, and how much time it took them to make a purchase decision. Aisle411 wants to give that kind of power to in-person retailers and brands.
At the leading edge, the company is working on integrating their app with new LED smart lighting that will allow businesses to track consumer position to within centimeters.
With over $14 million raised in investment so far, and in the middle of a B Round of fundraising now, the company has the interest of an industry that has only just begun to take advantage of the Internet of Things.
“We still think we’re at the tip of what we can do,” said Pettyjohn.
Ryan Pendell the Managing Editor of Silicon Prairie News.