Aisle411 CEO: Retail Will Be the Biggest Opportunity for Indoor Location Tech

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mzl.kxsdhabo.175x175-75As indoor positioning technology improves, the opportunity for businesses to track and engage with customers in real-time as they browse the aisles of a store or navigate an airport is becoming very real. A number of these types of startups have closed funding in recent months, and the technology is now spreading across a number of verticals including hospitals, museums, airports, and retail stores. 

Enter Aisle411. The St. Louis-based company works with large retailers and small mom-and-pop shops to leverage indoor navigation to enhance the shopping experience for consumers while allowing retailers to track a shopper’s behavior in-store. In addition to a consumer-facing app, Aisle411, which raised $6.3 million in September, develops white-label applications for retailers, enabling clients like Home Depot and Walgreen’s to integrate indoor navigation into their existing products.

Street Fight recently caught up with Nathan Pettyjohn, Aisle411’s founder and chief executive officer, and Matthew Kulig, the company’s co-founder, to discuss the implications of indoor location technology and its impact on the retail industry.

We’ve seen a lot of activity in the outdoor mapping space so far this year. How does indoor navigation play into the outdoor mapping game?
Kulig: We firmly believe that today’s world is all about proximity. So where you’re standing, and what you want at the time that you’re standing there, is a huge opportunity for technology like ours.

If you are standing outside your office, and you just realized you need to get some hairspray on the way home because you’ve got a big event tonight, wouldn’t it be nice if you could just look at your phone, and go “hairspray,” and then we show you the closest stores in proximity to where you are so that you can get there the quickest and not only that, but see a map of where that product is inside the store?

What do you think is the future of indoor location technology, and also the growth economically of this industry?
Kulig: There is a huge opportunity — and our focus is on retail because shopping is something that all people are engaged with everyday. But if you think about the world at large — universities, museums, hospitals, airport terminals — the indoor world, and your ability to deliver relevant information and to interact and engage with people, this is a huge opportunity.

We’re very excited about what we do. We’re a piece of a much bigger opportunity, and even our small slice of the pie is still in the billions of dollars.

How do you think indoor technology, and the future of it, will impact how people interact with their environments, indoors and outdoors?
Pettyjohn: Dramatically.  Humans, as a whole, spend 90% of their time indoors. So there’s a huge opportunity to leverage all of the digital devices that most of us have and are carrying around to digitize that experience so that it works with our digital world.

We believe that retail will be the biggest indoor location opportunity: it’s a $3 trillion industry and 90% of those sales happen in-store. So it’s where commerce happens. There’s a lot of money flowing through the local market, and there’s billions and billions [of dollars] that are spent on marketing. And once you digitize, you understand the context of consumer behavior inside the walls of a store, allowing marketers to make extremely personalized recommendations.

From a tech standpoint, what developments are impacting indoor mapping today?
Pettyjohn: We think that one of the biggest opportunities right now is Bluetooth low-energy technology, largely because its being adopted by power players like with iPhone and Google. iPhone’s got the iBeacon, which makes it really easy to interact with Bluetooth. And the Bluetooth 4.0 chipsets, which are in these devices, are going to make Bluetooth low-energy an enabler. Combine that with all of the data and mapping, and it’s the holy grail.

Folks have talked about the opportunity for indoor navigation for a few years. What’s holding back the industry’s growth?
Kulig: Navigation is an interesting phenomenon. It is evolving and getting better all the time. We’ve said for two years that it’s coming, and it’s coming fast. We’re actually a little surprised that it’s not already here.

I think that the big thing preventing it from taking off is a cost-effective way of achieving it. Right now to achieve that, you’re talking about systems, hardware, and infrastructures that I don’t think retailers and locations can justify taking on the costs. As soon as someone comes to market with a very cost-effective way to achieve the blue dot navigation, then I think you’ll see it explode rapidly. We firmly believe that the low-energy Bluetooth technology could very well be that technology. But, there’s work to be done.

So, if indoor mapping wins, who loses?
Pettyjohn: I think in about five years, you’re going to see a massive shift in traditional media dollars that are being spent on TV, and even print, shifting to mobile and indoors. We just surpassed the time where people spend more of their time on their mobile device than they do watching TV. It’s the perfect time to target them with location-aware ability. And retail is so right for it because people expect to be marketed to when they’re in a store because they’re shopping, and they want to know what’s on sale, they want to know what the right product is, they’re looking to spend money.

Myriah Towner is an intern at Street Fight.