A startup called Swipely is offering merchants so-called Google-style analytics to help them get more out of storefront sales—all with the swipe of a credit card.
Some 95 percent of sales still occur offline and many independent merchants have credit card processors. Now Swipely is promising to replace those systems with ones that not only process credit card transactions, but also tell them about who is buying their products.
“We used to have a point of sale device that just accepted credit cards, end of story,” notes Salvatore Fuccillo, co-founder with his wife of Olive del Mondo, a Providence, Rhode Island-based purveyor of specialty olive oils and vinegars that has recently started using Swipely.
When store customers swipe their credit cards, Swipely takes the associated data, anonymizes it and converts it into a dashboard that tracks items such as daily and weekly sales and information on whether the store is drawing more new or repeat customers. It also convinces merchants to switch by offering to match the amount they currently pay to credit card companies, which runs around 3 percent to 5 percent of the transaction.
Fuccillo says that since the retailer started using Swipely, it has been able to draw more specific conclusions about the success of its Facebook and Twitter promotions, for example, as well as the impact of outside events on sales.
One ah-ha moment came just before Mother’s Day. “We saw a big uptick in sales related to something we didn’t even know would affect us. Next year, we will start marketing that on social media even earlier,” he says. The company also noticed that the big February snowstorm in New England had a negative impact on sales. A daily journal on the dashboard enables him and his wife to input notes on these occurrences for future reference.
In addition, Olive del Mondo found that a disproportionate number of its sales come from repeat customers. “That is something we normally wouldn’t be able to keep track of at all,” Fuccillo says. The company concluded as a result that it should step up efforts to reward loyalty. Swipely also enables merchants whose customers opt-in with their e-mail address to set up and monitor a customer loyalty program.
Swipely claims that it has discovered a market niche that huge credit card companies are simply neglecting.“Merchants today spend $90 billion on credit card fees, and don’t get a lot of value in return beyond a monthly statement in the mail,” maintains Angus Davis, Swipely’s founder and chief executive. “Imagine if Amazon deleted their customer data every night. That’s what mainstream merchants do every single day.” The credit card companies may well get on the ball shortly, or buy up the likes of Swipely, if the company sees rapid success.
That doesn’t mean Swipely is without competitors, however: another vendor in the space is mobile payment company Square, one of whose co-founders is Twitter creator Jack Dorsey. But Davis, also a serial entrepreneur who co-founded Tellme, (sold to Microsoft in 2007), claims that Square is aiming more at small, individual vendors.
“We are not going down to the farmers market,” Davis quips. Swipely says it targets companies with around $30,000 in credit card sales monthly, with frequent repeat customers and a healthy following, whether on Yelp or Facebook. More than 70 percent of Swipely’s customers are independently owned and operated, Davis says, and about 60 percent are restaurants. Other customers include hair salons and spas, independent retailers of womens’ apparel and sporting goods, and specialty retailers of groceries and liquor.
Swipely started as a company focused on consumer reviews of merchants in 2009, but in January 2012 changed course to court merchants themselves. Since doing so in June 2012, the company claims to have begun processing around $700 million in annual sales on behalf of “hundreds” of merchants but won’t give more details.
The company also recently obtained $12 million in second-round funding from Shasta Ventures, along with First Round Capital, Greylock Partners and Index Ventures. It says it will use the funding to help it expand its network of merchants. Currently it focuses on Washington D.C., Boston, New York, Providence, Seattle, and Connecticut.
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Mary Lisbeth D'Amico is a freelance writer based in Jersey City who frequently covers digital marketing, social media, tech startups, and venture capital. She has contributed to a wide range of publications including The Wall Street Journal, Business Week, Red Herring, and Real Deals. Find her on Twitter at @mldamico.
March 19, 2014