This is the latest in Localogy’s Skate To Where the Puck is Going series. Running semi-weekly, it examines the moves and motivations of tech giants as leading indicators for where markets are moving. Check out the entire series here, and its origin here.
One holy-grail opportunity in local commerce is bringing the benefits of eCommerce to the long tail of SMBs. By “benefits,” we mean searchable product inventory and scaled distribution. Consumers also benefit from filtering product attributes and overall satisfaction, which engenders repeat business for SMB merchants.
In some cases, the endgame is eCommerce operations and shipping. And that itch has already been scratched by players like Shopify. But the remaining gap is with online-to-offline commerce (o2o), also known as buy-online-pickup-instore (BOPIS). This obviously requires digitized and searchable in-store product inventory.
This exists — and is indeed a growing revenue category — for retailers like Target. But like many areas of local commerce, the elusive long-tail opportunity lies with smaller merchants. There have been many attempts to tackle this fragmented corpus of data, including Goodzer, Krillion, eBay owned Milo and of course Google.
With Google Shopping, PLAs and the proliferation of the knowledge graph, it has relied on a variety of sources to bring more accuracy to brick & mortar product inventory. The challenge of course is a fragmented base of SMBs with varying-savvy and several platforms — including Excel spreadsheets and even pen & paper.
So this remains a big gap in Google’s aspirations for the local knowledge graph, and the ongoing evolution of GMB. In fact, Google has been working on this challenge for longer than most people realize. This includes its 2006 partnership with Intuit to migrate Quickbooks inventory management into searchable product data.
To that end, Google today acquired SMB product inventory startup Pointy for $163 million. Compared to many previous attempts at inventory data, this brings the point of digitization to where SMBs live: offline. In other words, instead of various forms of online data to extrapolate inventory, it goes right to the analog source.
Specifically, Pointy’s flagship is a $700 device that plugs into point-of-sale (POS) systems and barcode scanners. This provides a sort of bridge that converts raw inventory data to structured and searchable data that can be used for product search. One of its strengths is breadth of compatibility with POS systems.
Another key advantage is that Pointy’s software kicks in at the right time. In other words, ongoing product scans aren’t required to keep a persistent tally of inventory. After the initial scans, algorithms tap into other aspects of POS or accounting systems to calculate inventory levels with a high degree of accuracy.
Notably, Google had already been using Pointy as one of its data sources for SMB product inventory. The acquisition puts greater confidence behind the technology, and ability to scale it through Google’s longer arms (or hardware subsidies). It also opens the door for Google Analytics-like product sales data for SMBs.
In addition to generally stepping closer to the offline inventory data “holy grail.” Google gets a few things. It gets more structured and reliable data sources, which could boost user engagement. It could also boost SMB engagement — including the analytics speculation above — some of which will convert to paid advertising.
The six-year-old Dublin Ireland-based Pointy had previously raised just under $20 million from several investors including Frontline Ventures, Polaris, LocalGlobe and Lars Rasmussen. The Google acquisition marks co-founded Mark Cummins second exit to Google after the 2010 sale of his visual search startup Plink.