(Bloomberg)âTalbots Toyland used to buy full-page newspaper ads during the holiday shopping season and hope for the best. Now, the San Mateo, California, store is connecting with Bay Area toy shoppers on Googleâs search engine andÂ attracting customers it might otherwise have never found.
Google for years has offered tools to help small merchants increase their online visibility, but only if those retailers had digital records of what was on their shelves. Like many small businesses, Talbots lacked digital records of what wasÂ in stock and never got around to building one for its mammoth inventory of 65,000 products, which includeÂ everything from Lionel Trains collectibles and the latest must-have Legos.
Then, last year the store purchased three devices from Pointy, aÂ Dublin startup that helps independent merchants increase their visibility online and lure consumersâwho otherwise would shop at Amazon.com Inc. and eBay Inc. or mega-retailers like Walmart Inc.âthat have entire teams dedicated to being visible online.
The $500 deviceÂ plugsÂ into a cash register and, using each itemâs bar code as employees ring up sales,Â creates a digital inventoryÂ that is posted online and visible in Google searches along with the retailer’s location.Â While Pointyâs hardware has been around for four years, it just got more appealing thanks to a new partnership with Google that lets merchantsÂ buy âlocal inventory adsâÂ that appear in the search results of nearby shoppers. Think of it as a Google Maps for local products.
Talbots, which has been in business for more than 60 years, saw immediate results. Potential shoppers called to confirm the items they wanted were in stock. Talbots knew these were new customers since many asked for directions, and the store surmised that at least some of these newbies were tipped off by the advertising generated by the Google-Pointy partnership. Sales are up by double digits this year, which Talbots attributed to this added online visibility as well as the closure of nearby Toys R Us locations.
âI know the whole âwhatâs in storeâ thing has been around for a while and Google has been around for a while, but we just didnât have time to get things set up,â says Keith Schumacker, manager of Talbots. âThis thing does it all for us when we scan items at the register. Now when people look on Google for things we sell, they find us.â
Pointy already has devices in 10,000 U.S. retail locationsÂ and sees plenty of room to grow. 90% of the $5.4 trillion in U.S. retail spending this year will happen in stores, according to eMarketer Inc. Those in-store transactions are increasingly influenced by online experiences, which include researching products and searching for where they are available. Many shoppers prefer to buy an item in a store after inspecting it and speaking with an expert than buying it online and waiting for delivery, says Mark Cummins, who co-founded Pointy.
âMost shopping still happens in brick-and-mortar stores, but consumers expect to be able to pull out their phones and find whatever they need instantly,â he says. âPointy is helping retailers catch up there.â
Cummins started Pointy in 2014 after selling his previous startup Plink to Google in 2010. Plink let users search the web using images rather than keywords. Cummins got the idea for Pointy following a party where he and friends enjoyed craft beer purchased from a nearby market. He wanted to buy the beer but couldnât rememberÂ the name of the store, which got him thinking you can search online for products around the world but you canât always find out whatâs on the shelf at the shop around the corner.
The low-cost devices aimed at small businesses follow the path of Square Inc., which started a decade ago by selling cheap smartphone plug-ins that let dog walkers and pedicabs accept credit cards. Square processed $65 billion in payments last year and offers additional financial services, highlighting how simple solutions for small businesses can add up to big business.
Pointy is already diversifying its revenue. In addition to selling the device, it helps local businesses like Talbots buy Google search advertising and gets a commission on those sales. Talbots Toys has been spending about $300 a month on Google advertising, which it is increasing over the holiday season when toy shopping spikes. Digital advertising sales will total $111 billion this year, up 25.7% from a year ago, with Google leading the market, according to eMarketer. Pointy could help Google increase that market even further if it encourages more small retailers to buy search ads.
âSure, shopping online is great for certain things,âÂ says Noel Ruane, a partner at Polaris Partners, which led a $12.5 million funding round for Pointy this summer. âBut if something is close by, Iâm happy to go and buy it so long as I know itâs there.â
Of course the new system has some glitches. Retailers must manually delete items they no longer sell or have sold out. Pointy works best forÂ items that are constantly in stock; less so for hot-selling toys during Christmas season. As a result, inventory listed online isnât always up to date, which means some customers who make the trip without calling in advance can be disappointed.
âA lot of people are under the impression that if itâs on the internet it must be true, but most people call first if itâs a hot-selling item,â says TalbotsâÂ Schumacker. âStill, we get customers who say, âI drove all the way up here from Gilroy and you donât have it and Google said you have it.â So I do my best and say, OK, how about I ship it to you when it gets in.â