New technology a hard sell to local shops

Katie Mattscheck, an employee at In the Pink in Boston, uses Sagamore Retail to determine which items are selling.Suzanne Kreiter/Globe Staff/Globe Staff

Ben Saren, a Somerville entrepreneur, remembers his many sales calls to a Davis Square camera shop. He was trying to persuade its owner to create an online presence on Saren’s CitySquares website to promote the shop’s products and services, and get more customers in the door.

“I lost count of how many times I went in there,” recalls Saren, who walked by the camera shop last week and noticed it had closed. “I was trying to give my product away to him.”

The year is 2013, but for many local businesses, it might as well be 15 years earlier. Some local shops still don’t have websites, and those that do often simply list their phone numbers and operating hours, with a few photos. “The vast majority of consumers research products on the Web as a starting point,” says Saren, who sold CitySquares in 2010. “Yet local retailers think the buying process starts when someone walks into their stores.”

Trying to sell technology to local retailers, he says, is “just a real slog.” And yet a new crop of enthusiastic entrepreneurs is trying to help local merchants defend their businesses, at a moment when online shopping is booming. Retail e-commerce in the United States rose 15 percent last year, to $186 billion, according to comScore, a research firm.

Among the entrepreneurs is Gordon Russell, who owns a chain of eight apparel stores around Massachusetts, called In the Pink. Russell says that he was frustrated at how hard it was to access and analyze data about what was happening in each store. So he started a second company, Sagamore Retail of South Boston, to create software that would solve that problem, for both store owners and employees.

Using data collected from registers, Sagamore’s Web-based software serves up charts and graphs that can show each store’s hour-by-hour sales performance, or what types of apparel a particular customer tends to buy. It can be viewed on a smartphone or tablet, as well as a desktop computer.

Russell says In the Pink’s managers use the information to make decisions about staffing levels in each store, and which slow-moving items may need an extra push (often by being modeled by the store employees). “Retail is really data, when you come down to it,” Russell says.

About a dozen stores on Newbury Street in Boston and in Manhattan are testing a new feature of a mobile app called Swirl In-Store. (Swirl is located in Boston.) With the user’s permission, a specially installed sensor in the store can ping shoppers with messages on their phones, perhaps about a new product line that has just shown up, or a special discount. When I browsed around The Blues Jean Bar on Newbury Street, the app let me know that I could take 25 percent off any purchase I made within the hour.

Similarly, Timberland has been using the Swirl app to offer shoppers 10 percent off. Ryan Shandrin, vice president of retail and e-commerce, says the company is “really in test mode,” in advance of the crucial holiday shopping season. Shandrin says Swirl may prove to be a way of “reaching out and accessing a younger customer who may not be inclined to pay attention to signage in the store, or may not want to interact with sales associates. It gives us an ability to talk to them on their terms.”

A Concord, N.H., start-up called Nearby hopes to encourage people creating gift registries — for a wedding, perhaps — to fill them with products from local merchants. They assemble their list of desired gifts, and their guests can purchase the items online. Among the early users is Mike Beauregard, co-owner of Things are Cooking, a Concord cookware shop. “I really think it’s going to take off, and we have gotten a couple sales from it already,” he says.

Randy Parker, founder of Constant Contact, the Waltham e-mail marketing company, is working on a new start-up called PagePart. The Boston firm aims to help small businesses make their existing websites easier to view and interact with a mobile device. Lexington entrepreneur Jane Chen is starting Kurb to help consignment shop owners showcase their inventory online.

Making a store’s inventory discoverable online is something that many start-ups have tried to do — and largely failed. When you do a Google search for something you need, a few big box retailers like Target may surface, and their sites often tell you which stores have the item in stock. Not so for the neighborhood hardware store.

A Boston start-up called Vrsed will try again this fall, with a site focused on “hyper-local inventory search” for new clothing and accessories, according to founder Nicole Johnson. But Johnson says she will first target inventory sitting in stores belonging to bigger national retailers, as opposed to the small fry.

Local merchants have long relied on product knowledge and personal service as their competitive advantage. The unanswered questions, say several entrepreneurs who have endeavored to sell technology to them, are whether and how they will embrace new technologies to bolster that advantage.

Darwinism is something retailers have always had to contend with. But as consumers turn to tablets and smartphones to hunt for products and don’t encounter local merchants, we’ll almost certainly see more examples of extinction. As Saren, the CitySquares founder, puts it, “I want to do business locally, but if I can’t find something locally, I buy it on Amazon. And I hate to do that.”