NearbyNow Raises Round, Unleashes Data

NearbyNow’s CEO Scott Dunlap a long time ago expressed to me that some of the retailers the company was working with were resistant to syndication of their inventory data. The reason was that they feared being compared side by side vs. e-commerce merchants who could undercut them on price. I always argued to Dunlap that it was the other way around: the e-commerce merchants should fear in-store inventory information because people would be inclined to buy locally.

That retailer fear has apparently been overcome because NearbyNow is about to broadly syndicate its retail inventory data, including via a coming API that will eventually enable anyone to grab it. Krillion has for the past six or so months been doing partnership deals with companies to syndicate its real-time inventory data, but now the floodgates will open.

The first partner for NearbyNow’s data is TheFind (which is also taking Krillion data). But others will very quickly follow, including major shopping engines and search providers. Eventually the API will make the company’s billion products (with a “B”) conceivably available to anyone that wants to tap it.

What’s being announced today includes an $11.75 million Series C investment and an iPhone application, which allows users to search their local mall sites for products (the company’s database now covers 200 malls). Dunlap said the iPhone app simply responds to a recognition of growing usage from iPhone owners that the company has seen and the fact that the demographics line up well between iPhone owners and NearbyNow shoppers.

NearbyNow offers a “reserve online, pick up in store” feature for any product in its database. Usually within minutes to hours (in some cases) the company can verify if a product is present on the shelf and a consumer can go pick it up in store. Shopatron offers something similar for the many hundreds of manufacturers it works with but its data aren’t yet being syndicated (but will be I suspect soon). Where2GetIt and Channel Intelligence are also in this space. So is ShopLocal.

NearbyNow’s free API will eventually enable any mobile publisher, shopping site, vertical site, search engine, mashup builder (think products on a map) to show users where they can buy things in local stores. The missing piece in NearbyNow’s model has always been a more logical distribution strategy. The company built and hosted shopping mall sites. Scott Dunlap has always said, however, working with mall owners has been the most expeditious way to get the data. Now that the company has got it, it has created something of immense value.

NearbyNow takes a negotiated fee each time a consumer “reserves” something for in-store pickup. It’s essentially a CPA model. Third parties showing NearbyNow data on their sites would get a piece of that fee.

As I argued yesterday, product-related e-commerce (buying online from a pure-play etailer) is an endangered species. Only sites with strong brands (e.g., Amazon, eBay) will be able to withstand the onslaught of local inventory data as it proliferates. Indeed, product-related e-commerce becomes a back up to local shopping, when items are out of stock or have to be shipped as gifts, etc. On some occasions people will buy online because they’re forced to (think Dell) or because of a better price on a branded item (e.g., digital camera).

Every shopping engine that doesn’t have this local store data will suffer at the hands of those that do. The significance of this and its potential impact on online shopping (and by extension mobile) cannot be overstated.

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I’ve always thought that products are a compelling addition to local search sites and that services and products have been artificially separated when it comes to local. Inventory data syndication will mean that more “local search” sites will be able to include product information if they so choose.