Coming Soon To A Store Near You: Tagtile, A Square-Like Mobile Loyalty Service

Tagtile is a new company (and recent TechCrunch Disrupt Startup Alley participant), which is using the Square model involving free hardware to address the issues surrounding customer loyalty, management and rewards for brick-and-mortar merchants.

Like mobile payments service Square, which uses a free hardware dongle that attaches to a mobile phone, Tagtile also provides its merchants with a free hardware device – in this case, a white cube for customers to tap with their phone at checkout.

The cube is meant to serve as a stopgap solution until NFC (near field communication) really takes off in mobile. “In spite of all its promise,” explains Tagtile Co-founder and CEO Abheek Anand, “NFC has always been a technology that’s 3 years away…We want to focus on only one thing – changing consumer behavior.”

(Devices in stores – this is a thing now! See also: the iPod-based Perka, launched today). 

What Tagtile provides is a simple way for customers to register their visit to a participating merchant, in exchange for points, coupons, discounts or whatever other loyalty rewards the merchant wants to distribute. The customer simply launches an app on their smartphone (iPhone or Android, BlackBerry soon) and taps the cube at checkout to get the rewards. They can also check-in on Foursquare or Facebook via the app, or (soon) tweet about their visit.

The experience is very much like what an NFC-enabled solution would provide – it just doesn’t use NFC. Instead Tagtile leverages sensors common to mobile phones today to make the connection, but Anand doesn’t want to publicly discuss which sensors or how Tagtile is using them.

On the merchant side, the cube either plugs into a PC via USB to integrate with any existing point-of-sale system offering an SDK (software development kit). For those merchants without the USB option, Tagtile can plug directly into a wall outlet. In that case, the cube borrows the data connection on the user’s smartphone to send data back to Tagtile servers.

For consumers with privacy concerns, Tagtile is clear in that personally identifiable isn’t shared with merchants, only with Tagtile itself. Focused on the security of that data is Tagtile’s other founder, Soham Mazumdar, who spent six years at Google working on infrastructure and data mining for Google Search. Meanwhile, Anand previously worked in Product Management at Engine Yard, as an investor at Lightspeed Venture Partners, and as an early engineer at VMware.

Tagtile merchants can go beyond the basic “punch card” rewards system with service, getting access to something that’s more akin to a “Google analytics” for their store. Who shopped there, how often, when, etc. is displayed in a dashboard-like interface. Merchants can also narrowly target customers via campaigns – e.g. “everyone who hasn’t been back to the store in the past 2 months.” Tagtile serves as the middleman, delivering the message from the merchant to the shopper.

Currently, the company has 35 merchants across different verticals testing the service in San Francisco, New York, Florida, and the Maryland/New Jersey area. Tagtile is a few weeks away from closing its first seed round, expected at around $1 million. The round may also coincide with its public launch, also a month out.

In the meantime, interested merchants can sign up here.