Ask any retail marketer what their greatest challenge is and a recurring theme could very well be – close the loop on digital and in-store offers and promotions. Brick-and-mortar stores are increasingly upgrading their point-of-sale solutions to account for digital payments and other new waves of commerce capabilities.
Sparkfly, which originated just over 10 years ago as an online employee discounts and promotions portal for companies like Delta Airlines and SunTrust Bank, took on new life when it entered the digital coupon space some six years ago. Because of its filing for 20 technology patents over the years, Sparkfly had early access to integrations with major point-of-sale platforms like NCR, Xpient and Retalix. Now, Sparkfly is focused on tracking conversions across brands’ multichannel mobile marketing campaigns.
Catherine Tabor, Sparkfly’s founder and CEO, spoke with AdExchanger.
AdExchanger: How does Sparkfly work?
CATHERINE TABOR: What we have done in the instances where we’re integrated at the enterprise level and from an interface with the point-of-sale, it’s truly just a configuration that has to happen within the system. It’s not new hardware. It’s not new software. It’s truly configuring an open discount button on their machine that enables a call-out to our platform that validates that the offer is valid and that the items that are required for purchase are in the basket and then it calls it back down in real time.
In instances where we’re working with a promotions engine, they can actually feed our system unique coupon codes that we can then distribute out across different ad networks or social networks and then we can track those one-time promotion codes back through the point-of-sale.
I’ll take it from a couple of different perspectives. When I look at the point-of-sale players, what I think we bring to the table for them is speed, to be honest. We’re a small, agile company and these big, point-of-sale providers have such large customers… that they spend a lot of time addressing requests and different product development within their own customer base and I think it has been wonderful to see them open up a little bit to partnerships.
I think that, as NCR has been a partner of ours for some time and they’ve really seen, especially in the hospitality group, how we can bring innovation and help them to have those marketing conversations with their customers, so that they’re not just a marketing partner, but that they’re truly a strategic marketing partner to their customers, I think that’s an important factor. I also think that in manufacturing programs in particular — for L’Oreal or Coca-Cola, or any of these large iconic brands — to be able to have programs that they run directly to consumers, you need to have the ability to scale across all retail. Because of that, there has to be a player in the middle that can reach across to different POS partners and enable a cohesive program to come out the back end. I think that’s another place where these POS providers have conceded that if they want to participate in these manufacturer programs, that their competitors are going to be there, too because it has to reach across multiple retailers.
That has been encouraging for me to see. It’s an evolution, and a paradigm shift. I was early in the space and a lot of people who I am partnered with today said no to me two or three times before they said yes. It’s really been a process of endurance and I think the other piece of this is that when you look at the large retailers, one of the things that I want to be very clear about is we can have a deep integration with their POS system, but we can also partner with them on their promotions providers and that’s the case with Walgreen’s. They have a promotions solution that enabled us to get to market quicker. There are different levels of integration that we can forge with these partners and I think, for all of them, what that brings to the table is speed-to-market, because things are happening so fast and evolving so quickly that retailers and POS companies and brands are trying to understand the ROI of these programs, so they can choose the right ones to participate in.
Can you provide an example of a “promotion” solution you integrate with?
Most of them are kind of home-grown, or they’re offshoots of the point-of-sale system. As an example, NCR has a product called AMS (Advanced Marketing Solution) that they run with a lot of grocery providers. We’re not actively running in the AMS program right now, but that’s an example of a promotions engine that’s actually owned by the POS company.
Can you discuss, in further detail, your latest project with product discovery app Pretty In My Pocket (PRIMP), L’Oreal, Walgreen’s and Duane Reade?
Pretty In My Pocket has built a lot of innovation around engagement with the cosmetics consumer, so one of the features of the platform is something called a “Look,” and it’s really kind of Pinterest-y in that you can post a look and you can tag the looks that the person in the picture has on and you have an opportunity as a consumer to put those items in your shopping bag.
L’Oreal, as part of the campaign that we are running with them, has submitted five sponsored looks where their products are attached to those looks and they’ve attached offers and promotions to those products so when you put them in your PRIMP bag there’s a discount associated with them. From a data perspective — [and this is a] mobile ad example, but it holds true for an in-app offer as well — we can look at different offers and merge the data from when the item was first viewed all the way through to the actual purchase in store to show how that promotion actually performed. The benefit, to someone like a L’Oreal, is you can pull levers to figure out which promotions work better than others. There may be a nuance to those that you wouldn’t know unless you could understand how they were being purchased on the back-end.
Who are your major competitors? Would it be a Shopkick, or would you say you’re fairly autonomous?
I think Shopkick is somebody we could partner with. I think that if they’re serving up promotions, we can help track redemption at the point-of-sale. I think that solutions that POS providers have on their own, potentially, are competitive with us, but again, a POS company can only service their customers and so I think that’s why it’s been favorable for us to work with them because we can actually increase the reach of these manufacturer programs across retailers.
Can you discuss your funding picture and future?
I’ve done very few things in a traditional way. Good or bad, that’s just how it works. We’ve raised about $15 million in funding and it’s been with several major angels, so we don’t have the institutional funding, but that’s been a helpful thing. If you look at the time that it’s taken us to do this, we’ve required a bit of a unique strategy in order to be able to pull it off. We’re now fully developed. We have integrations across most of the major POS players and we’re excited about the opportunity to have some big brands do some big projects with us. We are in deployment mode and I think that over the next 12 months, it’s a bullet that becomes an explosion.
