Swirl, A Beacon-Fueled Marketing System, Raises $8M So Retailers Can Track Shoppers

With the goal of closing the gap between retailers and shoppers, the SaaS startup Swirl Networks, Inc. is rolling out a system of in-store beacons to notify consumers of specific deals according to where they stand in the store.

A little Big Brother? Yes. But it’s happening: Swirl has just closed an $8 million Series B round led by Hearst Ventures, the strategic investments branch of the Hearst Corporation, to fuel the expansion of their platform. SoftBank Capital and Longworth Venture Partners also participated in the round.

When a shopper enters the store, Swirl will send a push notification to their phone with an exclusive offer to join, which gives him or her a full screen store experience.

Over the summer, Swirl led a pilot rollout of its platform in Boston and New York with a handful of specialty and fashion retailers including Timberland, Kenneth Cole, and Alex and Ani. This latest infusion of cash will expand its presence to hundreds of other large-scale, multi-category retailers — think the Targets and Walmarts of the world.

Swirl founder and CEO Hilmi Ozguc said that the pilot program showed a strong consumer response.

“The big takeaway was that consumers who walked into a Timberland store and got a notification that there was an exclusive offer just for them, over three quarters responded, opened the app, and looked at the products that Timberland was promoting. And 50% of those redeemed a discount offer,” he said.

Swirl’s beacon technology is precise down to about two feet, Ozguc said, which is the difference between knowing if someone is in the toothpaste aisle or the adjacent diapers section. One beacon can reach up to a 600 foot radius, although the range can be reconfigured by the store to fit their needs.

The system shows deals through its own app, and in order to scale its ubiquity, Swirl will be embedding its SDK in third party apps, including those from the major retailers that use Swirl’s platform, so that app updates come with Swirl’s technology and an option to receive offers. While Scott English, the managing director of Hearst Ventures, said there were confirmed plans to integrate Swirl with Hearst’s apps, it’s a good bet that it will take place down the line.

On the consumer side, Swirl’s on-the-spot discount offers remove the hassle of having to sift through your email for a coupon sent a week ago. More importantly, it’s a way for retailers to stay competitive when shoppers might otherwise be using their smartphones to showroom products and find better deals online. Swirl charges retailers for its self-serve software platform, with additional fees on top of that set according to their traffic and success performance. Retailers use Swirl’s web based tools to set their own offers, which they can push out to hundreds of stores at a time, or just to specific departments.

The plan is to initially tackle large retail brands simply because they have hundreds or thousands of store locations with which to get Swirl’s technology out in the public. Later on it will move down to mid-size and mom and pop stores.

“It’s a very nascent field,” Ozguc said. “The next best thing are geofencing campaigns, which use GPS radio. That stuff does not work indoors. The best you can tell is if you’re at a Target store… they can’t tell what aisle you’re in. It’s meaningless.”