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Some of the best ideas are born of necessity, and the story of Aisle411 is no different. Founder and CEO Nathan Pettyjohn was wandering a store looking for a surge protector after well-meaning associates sent him on a wild goose chase. He was annoyed.
“I said to myself, “What if I could pull out my phone and access every item that exists in the store and it would show me exactly where it is” he says. “It would save hours of my life every year. So that was my lightbulb moment.”
Pettyjohn, who had ad agency experience and worked in direct response marketing and in major consumer goods, and his co-founder Matthew Kulig, a serial entrepreneur with company financing expertise set out to create an app with the technology.
“The easy way to explain it, is that it’s a Google Maps for indoors,” says Pettyjohn. “You’re accessing relevant information just like you would on Google Maps, and that’s the data that we are essentially capturing. But it’s all anonymous so we can’t tie it back to a specific person. Ultimately the data is being used to enhance your experience as a shopper.
If you’re General Mills and you’re selling cereal, it’s great to know you’re in the store, it’s better to know you’re in the cereal aisle, but it’s perfect to know that the shopper was standing in front of Apple Cinnamon Cheerios and not the Whole Grain Cheerios. That starts to lead to a lot of interesting components. We can take the physical shelf that you’re standing in front of and it becomes the equivalency of a URL and a product that you’d look at on a website. That kind of data is really powerful, because 90% of all purchasing happens at a physical retail store.”
Finding the Funding
Once the technology was set, they set out to raise funds. They first tapped friends and family for investment, which led to angel investments and finally venture capital investments, raising 12 million dollars in funding to date. Pettyjohn gives credit to the growing St. Louis Startup ecosystem, including their home base, Cortex, for raising awareness of the need to support innovation and validating their work.
“Our first million dollars took about a year to get, the last million we raised took us about 30 days.” he says. “Being connected to the community is something Cortex does well, and it’s something that would be hard to find elsewhere. At one point we looked at moving to another location, but ultimately we came back and decided we were in the best place we could be.”
As they raised capital, they hit major milestones. Their first customer was ACE Hardware in Des Peres, followed by a couple of smaller grocery stores. Their big break came when Walgreens, and more than 8,000 of their national stores signed on, which lead to a national launch of Toys R Us.
But did they receive any pushback from retailers or associates concerned about employees potentially becoming obsolete?
“We had a worry about that early on,” Pettyjohn says. “But what we found was retailers ultimately want you to have impulse purchases. Normally how shoppers do that is wander the store looking for one thing and stumble on another. Retailers want those impulse purchases, but they don’t want shoppers frustrated and inconvenienced, especially with the convenience of things like Amazon today. We can actually recommend those impulse purchases. We can make it convenient, and with our technology we can recommend with a science, those impulse purchase items.”
Pettyjohn also says that associates are loving Aisle411, saying they use the app themselves in helping customers quickly find what they need. And without having to spend as much time guiding customers to products, associates can focus on the tasks that normally fall by the wayside during those interruptions, like restocking shelves and manning the checkout counter.
What’s Coming Next
So what does 2016 have in store for the STL-based startup?
“We started as locating products in stores, but it’s really evolved into a much more sophisticated analytics platform as well,” says Pettyjohn. “We like to use the phrase that we are creating ‘the Internet of Stores’, connecting shopper intent and product location, but also shopper location in the stores.”
Partnerships with Google and Apple and different lighting companies, like Phillips, have elevated the technology Aisle411 utilizes, such as smart LED lights that interact with your phone’s camera, allowing them to know where your device is located within centimeters of accuracy.
“We’re expanding into this “Internet of stores” solution set,” Pettyjohn says. “There will be integration of smart stores and the Internet of things. These analytics that come around shopper experience are going to be really profound. Where we’ve focused primarily on retailer growth as our customer base, you’ll see in 2016 we’re expanding into consumer brands. That’s multifaceted from a lot of the analytics that we’re able to provide and also the marketing in our platform as well.”
Along with expanding to consumer brands, Aisle411 is also looking at other markets for their technology including venues like corporate office buildings, malls, airports, museums and medical facilities.
“We built this software program that can now expand to all of these new verticals,” says Pettyjohn. “Imagine going into Barnes Jewish Hospital and the maze that often becomes: Wouldn’t it be great to pull out your phone and navigate the room of the person you are there to see? Or the doctor’s office where you have an appointment and see yourself on a map? Our technology can apply to that.”