By Amy McCullough
Reporter with Silicon Hills News

Digby-David-SIkoraWith online commerce ever increasing, retailers with big investments in physical storefronts are trying to drive good, old-fashioned customer foot traffic to those locations. Austin-based Digby is helping businesses do that by gathering mobile data about which customers are shopping when and where.

Digby’s location-based marketing and analytics platform called Localpoint allows clients to use customers’ location as a triggering mechanism for messages and offers.

“The premise for our business is that the retailers’ mobile app is their next-generation loyalty and payments vehicle,” said Digby CEO and founder David Sikora. “We work with a retailer who has a mobile app, and, through Localpoint, we make that app very elegantly location-aware. The technology that we add to their app … allows the retailer to put virtual perimeters—we call them geofences—around anything of interest to them. That could be their stores. It could be their competitor’s stores. It could be other venues. Those perimeters, those geofences, are now made part of the app. We also have the ability to create messages and campaigns, which get attached to the fences. So, if you have the Kohl’s app on your phone and you walk into a Kohl’s store, you’ve reached the fence around the Kohl’s store. That is an opportunity for them to engage with you.”

That engagement could take the form of a coupon or a special offer. Digby can collect data about when customers entered the store and how long they stayed. Upon a customer’s exit, the retailer can send a customer service survey.

In addition to Kohl’s, Digby clients include HP, Cabela’s, Hasbro and Radio Shack.

A loyalty and rewards company called Punchcard, which works with major retail brands from Starbucks to Target to Banana Republic, now uses Digby’s services to offer its clients the ability to send tailored offers to customers based on their shopping history and current location.

To earn rewards where they shop, Punchcard users use the Punchcard app to take pictures of receipts, start virtual punch cards for specific participating retailers, and play spin and win games to earn points and free rewards.

Instead of going to the trouble of creating their own loyalty and rewards app, businesses can team up with Punchcard and have a mobile rewards presence activated in 10 minutes, said Punchcard founder and CEO Andy Steur. Adding Digby’s Localpoint service to their package has given their clients the ability to make rewards more personal to shoppers.

With Punchcard, you can “earn rewards everywhere you shop. Now, with Digby’s capability built in, it gives us the capability to create location-aware offers to consumers so that we tie the right offer to consumers based on where they are in their purchase history,” Steur said.

Digby has a few competitors now but expects to see more soon. “If there are no competitors, there’s no market,” Sikora said. “There are some smaller companies that do what we do. There’s a company called Xtify that was just acquired by IBM. Digby now gets to compete with IBM. But that’s what happens. It’s a really exciting space that’s starting to get a lot attention from some of the bigger players.”

Digby now has around 45 employees, which includes contractors, and although they don’t disclose revenue numbers, the company is “pretty bullish” about growth opportunities this year. Sikora expects that Digby will seek another round of funding in the next few months.

The company began in 2006 with angel funding from Daylight Partners. Later, Austin’s S3 Ventures, California-based Relay Ventures and Boston-based Battery Ventures invested. It has been three years since Digby’s last round of funding. Digby has raised $17.5 million in three rounds of financing to date, according to its CrunchBase profile.

S3 Ventures Managing Director Brian Smith said his firm invested an undisclosed amount in Digby in 2008, as the concept of mobile commerce was just starting to develop. Digby started out designing mobile storefronts for businesses and then pivoted to a focus on location marketing services with the launch of Localpoint in 2012.

“They’ve built this Localpoint product that’s really awesome and closed some pretty cool customers. We’re excited about that,” Smith said. “We think that space has a lot more growing to go. Retailers really need to figure out this holistic solution of how to get people in the door. … Foot traffic seems to be going down, so attracting people to your store is a big deal.”

While Digby is not yet profitable, Smith said “they are close. They are growing nicely. We’re happy with where they are—kind of on that edge. … When markets are young like this, you want to grab as much as you can and get your stuff out there. I think they’re finding a pretty decent balance there.”