Swarm, a startup that helps retailers connect with in-store shoppers through their smartphones, has raised $1 million in seed funding from an … eclectic list of investors (more on that in a second).
Co-founder and CEO Rudd Davis says brick-and-mortar retailers don’t have a clear idea about who’s in their store, and they don’t have an efficient way to engage with each customer personally — giving them another disadvantage against e-commerce sites like Amazon. So Swarm provides those retailers with data about their customers and what they’re actually doing, so the store can then reach out with personalized deals and rewards.
To make this happen, Swarm offers free WiFi inside its partner locations, which is usually advertised through in-store signage. If a customer jumps onto the WiFi, their browser opens up in a special mobile website, allowing them to browse different products in the store, find coupons and deals, and also earn loyalty points for multiple visits.
The shoppers aren’t limited to the store’s site, but even when they go elsewhere, the retailer gets data about their activity, namely what websites they’re visiting and where they are in the store, and can tailor their messages accordingly. For example, if someone is comparing the store price to Amazon, the retailer can offer them a coupon for a better deal.
The WiFi- and browser-based approach means that there’s a relatively low barrier for customers, as opposed to convincing them to download an app. In fact, Davis says that in early tests, 30 percent of in-store traffic opts to connect to Swarm, and 65 percent of those people reconnect later on.
Davis, who was formerly a digital executive at USA Today (along with his co-founder Ryan Denehy), also says that the service has been rolling out slowly in order to work out the kinks, but he plans to be in 1,000 stores by the end of the year.
As for the seed round, investors include Brian Lee (who founded or co-founded LegalZoom, ShoeDazzle, and The Honest Company), Nasir Jones (he’s better known as the rapper Nas, but he co-founded 12Society and recently wrote a TechCrunch column about e-commerce), VICE co-founder Gavin McGinnes, sneaker retailer FlightClub, and ad agency executives Saxon and Sebastian Eldridge.
Swarm has actually been raising the seed round over the past year, Davis says, and only closed the round now because it’s preparing to raise a larger Series A.