Index hopes to use a new round of funding to make deeper inroads in the apparel and other industries as retailers get savvier about how they’re using data collected in-store.
The San Francisco-based company, with a team of about 40 workers, makes software that helps retailers take secure payments in their stores and also leverage that data for marketing. That means those payment terminals customers swipe their credit cards through to make a purchase are not only secure but also help companies build a customer database. At a very basic level, explained cofounder and chief technology officer Jonathan Wall, companies can draw conclusions about their shopper base with information such as who is buying T-shirts and how many of those who buy shirts also tend to buy socks. When those same payment terminals ask if someone would like a receipt e-mailed to them, that then becomes an avenue for e-mail marketing efforts.
“It becomes an automated [customer relationship management] system, and from that CRM system, we unlock all kinds of interesting marketing opportunities driven through our platform,” said Wall, who is also a cofounder of Google Wallet.
Venture capital firm General Catalyst and Rob Gierkink, founder of marketing-analytics company Datalogix, led the company’s $19 million Series B. That follows its 2013 A round. The Index board will add Gierkink as chair while also bringing on General Catalyst’s cofounder and managing director, David Fialkow.
About half of the company’s current base is grocery chains. The remainder is quick-service restaurant operators, about 30 percent of overall sales, with apparel companies accounting for the rest of the company’s revenue.
Index, which sends about 25 million e-mails monthly, counts American Apparel as its largest customer on the apparel side, with Wall unable to discuss any other clients its working with in the vertical.
It’s been a somewhat slow start building out the apparel business, largely due to how quickly grocers began working with Index to implement its software, he said. It’s also easier with many grocers using similar technologies on the back end. Apparel companies are the opposite, Wall said, in that there’s little consistency in what technology is being used. However, the company’s now looking to grow that business, given the opportunities there to potentially drive greater in-store purchases due to the nature of apparel retail and what’s being sold, Wall pointed out.
“The exciting thing about apparel is that it’s truly the kind of purchase that is completely at the discretion of the customer,” he said. “They also have much better margins, so promotions can be way more powerful.”