Euclid Raises $17 Million to Deepen Analytics for Brick-and-Mortars
Netscape founder Marc Andreessen may think retail’s demise is inevitable, but Benchmark Capital has just made a big bet on its future. The venture firm has led a $17.3 million series B round in Euclid, a startup that uses wi-fi analytics to provide brick-and-mortar retailers with web-like reporting on in-store traffic. The round brings Euclid’s total funding to $24 million.
So here’s how Euclid works: As we walk around, our smartphones are constantly interacting with local wi-fi routers, looking for open networks with which they can connect. Each interaction yields a small amount of data that includes, among other signals, an anonymous device ID (called a MAC address) and a measure on the strength of signal that usually gets discarded. Euclid takes that data and provides brick-and-mortar businesses with a quantified look into their store’s foot traffic, serving up metrics like total traffic, return traffic, and “capture rate,” which measures the percentage of people who walk by the store who enter.
From a consumer perspective, the service is invisible and anonymous. The company only passes data to business in aggregate (so individual devices cannot be identified), and users can opt out of the service at any point. However, passive data tracking remains a grey area on the privacy front, and Euclid admittedly has yet to find the right balance between transparency and ease of use.
“People will never be totally comfortable with zero notification, but at the same time, they don’t want to be prompted to share their location every time,” said the company’s director of marketing, John Fu, in an interview with Street Fight. “Were in this middle age where companies are still testing the waters and seeing what the consumer comfort level is. It’s still evolving.”
In-store analytics has emerged as one of the more creative sectors of the hyperlocal industry with a handful of companies trying to crack the nut with a range of tools. Prism Skylabs, which took in $9 million in funding last fall, uses existing security footage to determine how consumers travel through stores. And Nomi, a New York-based startup that raised $3 million in thirteen days over the winter holiday, has replicated Euclid’s wi-fi approach as part of a wider, omni-channel CRM approach for retailers.
“If you look at the shopping funnel from when a person walks by the store, to when they come into the store, to when they make purchase to loyalty and retention, retailers have the most visibility at the point of sale and in the loyalty phase,” Fu said about the company’s position in the market. “But where there’s a real need, is earlier in the funnel. That’s where we’re trying to add visibility.”
In many ways, in-store analytics marks a logical next step in what has become a key narrative in the hyperlocal industry — the application of online tools to the offline marketplace. The first wave focused on “inter-location” by collecting and structuring information about places. Companies built tools to help consumers find and discover venues, business, and other places of interest; listings sites helped people find businesses; Yelp helped consumers decide where to go; maps helped them get there; and check-in services like Foursquare allowed customers to tell a friend once they arrived
Now it’s largely about what’s going on inside, or “intra-location,” and companies are building tools to improve the in-store experience. That means rethinking the point-the-sale (Shopkeep), quantifying payments (Square), improving loyalty, enabling in-store navigation (Google), and measuring how consumers interact with a business once they’re onsite (Euclid).
“What the [venture capitalists] are saying and what the analysts are seeing is that although e-commerce is growing faster, offline is still very important for the foreseeable future,” said Fu. “So the question is what can you take from the online world and bring it offline. One of the biggest ones is the use of data in being more experimental, being more iterative, and shortening the feedback loop between trying something new and acting on it.”
Steven Jacobs is deputy editor at Street Fight.