[Updated 1/14/15, 12:45 p.m. See below.] Most cell phone users have received some sort of “push” text message, whether it’s a warning of a flash flood from a government agency or an unwanted pitch from a marketer who somehow got your personal information. As cell phones have become ubiquitous, more companies are attempting to glean information from the devices themselves to learn about the consumers who carry them.
One of these is San Francisco-based Euclid Analytics, which announced a $20 million Series C funding round Wednesday to support expansion of its consumer analytics offerings. Euclid’s tools help businesses such as hotels, banks, and, in particular, retailers, track and analyze consumer spending and shopping habits.
The funding was led by Atlanta-based Cox Enterprises, the privately held company that has businesses in media and broadband communications, among others. Also participating in the round: Groupe Arnault, the Paris-based company with a controlling interest in brands such as Louis Vuitton, and existing investors Benchmark, New Enterprise Associates, and Harrison Metal. Euclid has raised $44 million since it was founded in 2010.
Euclid offers businesses a dashboard tool that helps them track information such as how frequently a specific consumer enters a store compared to how often she walks by it, how long people stay in stores, and how often they return, says CEO Brent Franson. The company sells services based on tiered, monthly pricing. A free option provides behavioral metrics while more sophisticated analyses can compare what other stores a shopper visited cost from $70 to $300 a month per location.
Euclid’s technology utilizes a business’s WiFi network to track its customers. When a customer enters the store with a smart phone set to automatically search for WiFi networks—as most phones are—Euclid’s dashboard assigns the media access control, or MAC, address from a customer’s phone a code, or hash, and tracks the customer anonymously, Franson says.
Now, Euclid is using its funding to build a service designed to encourage those customers to log into the store’s network, similar to the way an Amazon user would log in to his or her account, Franson says. The purpose is to allow customers to smoothly shift between the online shopping experience and the offline, brick-and-mortar experience, Franson says, as well as to provide the retailer with additional information about its customers.
At a store like J.Crew, for example, “the store associates are armed with data about me,” Franson says. “Because I connect to the WiFi, they know what I’ve been looking at jcrew.com. Maybe there’s something in my basket that I never checked out. Maybe they know my sizes. They can recommend clothing or sizes to me. They have more data from which to create a personalized experience with me.”
Privacy is an obvious question that arises with companies that track shoppers like this. Franson says the company takes steps toward making consumers feel comfortable with the tracking it does. In 2013, Euclid and other analytics companies developed a code of conduct policy with The Future of Privacy Forum and Senator Chuck Schumer that lets consumers know if they are being anonymously tracked and how they can opt out.
Euclid is in a crowded field of startups and larger companies attempting to track and use information about consumers. Beacons have offered similar services to retailers for years, in particular Apple’s iBeacon. It allows retailers to push deals to someone walking by the store with an iOS device in hand, for example. Many startups, such as Manchester, NH-based Adored and Seattle-based Point Inside are building businesses based around beacons, developing apps that offer deals and in-store navigation, or provide retail customers user analytics that can help predict consumer behavior.
Other startups, such as Austin, TX-based eyeQ, are creating hardware tools, such as touch screens with cameras, that try to monitor a user’s experience. Boston’s NewStore, which aims to unify online and offline shopping experiences and ease the buying process on smartphones, received a $38 million investment last September from General Catalyst Partners. [Description of Newstore updated.]
Even with so many potential competitors, Franson says there’s a big enough market for everyone. He contends that Euclid’s product can be competitive because it can be used in a variety of industries and is scalable—it charges different fees for different levels of analytics, and for different levels of customer participation.
“It’s going to be a huge problem. It’s not going to be one company that solves the whole thing,” he says.
Cox Enterprises’ participation in the funding appears odd at first blush. The company is best known for its ownership of media, such as newspapers and television and radio stations, as well as automotive-focused digital marketing and software tools such as Autotrader and Kelly Blue Book.
Cox also operates a broadband communications and entertainment company, which sells, installs, and manages hardware—including commercial WiFi devices made by companies such as Aerohive, Cisco, and Ruckus—to businesses, Franson says.
Euclid has built a beta version of the more advanced, opt-in tracking tool and expects to have a product available in 2016, Franson says.
