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Swirl launches ad network in attempt to better connect retailers, customers and brands

Swirl envisions its ad network reaching customers everywhere. (Brian Snyder/Reuters)
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Swirl is launching an ambitious attempt to reshape in-store advertising through SWx, its beacon-powered ad network that aims to connect retailers, brands and popular apps.

So far the only retailers signed on are Lord & Taylor and Hudson’s Bay, and the current app partners are limited to Epicurious and SnipSnap. But Swirl’s vision is notable, given that it addresses a major problem in using beacons to market to customers at brick-and-mortar retailers.

Beacons are Bluetooth-powered sensors that can be mounted on walls to detect nearby smartphones. So when a customer walks by the electronics section, a retailer could send a text message with a coupon or extra information about TVs for sale. But what if a customer doesn’t have the retailer’s app installed? The plan fails.

Realistic retailers know that not every customer in their store will have downloaded their app. Swirl thinks it can solve this problem by bringing in what it calls its “audience network,” essentially popular smartphone apps. Epicurious and SnipSnap have agree to make their users part of the network. So a retailer could reach customers with SnipSnap installed, and send them an ad from a brand.

As more apps join Swirl’s platform, a larger percentage of a store’s customers can suddenly be reached on their smartphones as they shop. Swirl also envisions the network as a potential ad revenue stream for retailers.

“They now have the capability with these beacons to say to my brand partner, ‘Who wants to be the one to do the advertising interaction, etc., with the shoppers in my store in this particular area,” said Rob Murphy, vice president of marketing at Swirl. “Hey Panasonic, how would you like to be the sponsor of the content in the electronics department this month?”

Lord & Taylor and Hudson’s Bay, which have installed beacons in 10 of their U.S. and Canadian stores — have received interest from multiple global brands about potentially partnering to leverage Swirl’s network to provide exclusive informations or promotions in its stores. Currently Ryan Craver, a senior vice president at Hudson’s Bay/Lord & Taylor doesn’t see the platform as a way to gain revenue from brands, but as a way to mutually connect with in-store customers.

“If you think back to the start of cost-per-click on ads in e-commerce, it took awhile for brands to start jumping in and start really realizing the actual benefit. So I think that same maturation cycle is going to really need to play itself out,” Craver said. “For this initial run what we’d like to say to brands is ‘Let’s do this together, let’s figure out what is most compelling. We’ll tweak it to see if it’s exclusive content, exclusive styles or coupons for each specific brands. Let’s go hold hands and trial each type.’ And from there we can figure out how we best engage with publisher networks in the future.”

Craver expects offering coupons to be just the beginning of ways to improve the in-store experience. What if a potential customer could be lured into a section of a store after being promised access to an exclusive music video, or other content from a musician who sponsors a clothing brand? What starts as a trip to watch a video, might end with a purchase of jeans.

Swirl thinks the ad network will have value for more than just retailers. Murphy sketched out a use case for hotels.

“They could conceptually go to local restaurants and businesses and say ‘Hey how would you like me to drive traffic to your local businesses from the people who are staying in my hotel,” Murphy said. “Which restaurant wants to be the sponsor this month for the beacon message of every guest that comes in?”

Of course, more beacons will need installed around the world. And more apps and brands will need to see the value of joining a platform such as Swirl’s. But given the trend toward personalized, more relevant advertising, it seems likely for something like this to eventually become the norm.