Belly, the Chicago-based loyalty platform which has now grown to over 4,000 merchants across the U.S., is today announcing its first product outside of loyalty, with the official debut of Belly Bites, a sampling program designed to attract new customers to a local business. Thanks to Belly’s traction with its merchant customers, it’s able to tap into its growing collection of consumer data in order to better target potential new customers with a promotion based on demographic data, shopping habits, historical interactions with other Belly merchants, and more.
The program has been in a beta testing period for the past few months with 200 merchants, primarily in Belly’s home base of Chicago, and has since rolled out to other markets, including Austin and Washington, D.C. Starting today, any merchant can sign up for the Belly Bites service, though it isn’t yet officially “rolled out” in the other markets, which include New York, Boston, Philadelphia, Madison and Milwaukee (WI), Phoenix, and most recently San Francisco, among others.
“As we started to work with our merchants more and more, we were looking at the number of users on the platform, the data we had, and the iPad we had in store that’s consumer-facing,” says Belly co-founder Logan LaHive, of the company’s overall goal. “We look at ways we can take these traditionally offline experiences in retail, and help bring a lot of those different kind of opportunities online.” He explains that loyalty is just one of those offline behaviors Belly is after, but another important driver for retailer revenue is acquiring new customers. “Belly Bites is our first foray into helping our merchants acquire new, local, loyal customers,” he says.
The platform allows merchants to create an offer where they give something small away for free – in tests, merchants have tried things like free appetizers and free haircuts, for example – then Belly targets potential customers with an offer through its web and mobile applications, as well as email. On mobile, customers can view their offers instead of getting push notifications (thankfully), as those could get a little spammy in more saturated markets like Chicago.
The company uses a combination of customers’ demographic info, provided via Facebook sign-in, with what it already knows of that shoppers’ behavior. Offers are also carefully designed not to go after a competitive business’s customers, LaHive says. Instead, merchants simply tell Belly what kind of customer they want – for example, a hair salon may ask for females ages 18 to 35.
In early tests, LaHive says that following the promotions, merchants have seen average customer return rates of 35 percent, and some which were as high as just over 50 percent. There’s some variation due to the types of businesses, of course, as coffee shops and quick serve restaurants are more likely to see returns at higher return frequencies than perhaps a high-end women’s apparel store or hair salon would.
Belly can also with another problem facing retailers running other customer discovery campaigns – that massive spike in new customers immediately following the promotion can overwhelm a business. This is often a complaint heard in the daily deals market, when a bunch of foot traffic comes in for the discounted promotion, but never returns. Instead, Belly Bites can be used to pace the influx of new customers based on what the merchant believes it can handle during the week or month.
Merchants working with Belly set targets like how many new customers they want to acquire, average basket size, ROIs they’re trying to achieve, and other factors critical to their campaign. These figures affect how much the merchant then pays on a performance basis for each customer they acquire. LaHive says acquisition fees are a flat rate, and vary across the supported verticals and types of campaigns, but notes that fee tends to be around $5 to $7. In addition to working with merchants on a case-by-case basis, the Belly Bites feature will also be bundled into the cost of Belly’s higher-priced tiers of its subscription loyalty service.
In addition to the launch of Belly Bites, LaHive tells us the team has relaunched its consumer-facing Android app which has been majorly improved now that the company has professional Android designers in house. It’s also now testing its merchants’ app on Android tablets and even iPad minis.
More notably, perhaps, LaHive says the company is now moving to expand into other areas that take advantage of Belly’s merchant footprint and the fact that they have iPads in thousands of stores. Asked for details, he said the company is planning to announce something in Q1 which will involve finding ways to “reduce transaction fees and increase average basket size.” He says they’re having discussions now about what that might be, specifically, but here’s a hint:
“Belly is a platform where we have the opportunity to do a lot of other interesting things,” he says. “Whether that’s being a part of processing transactions or whether that’s being an open platform to enable other types of innovation, that is still to be announced.” So, it’s something related to the transaction itself, and maybe mobile payments.
Belly today has scaled to over 4,000 locations, and is approaching 1 million members, who have visited Belly merchants over 6 million times. It competes with a number of other startups, many of which often go neck-in-neck in terms of merchant adoption, including FiveStars, LevelUp, FlockTag, Front Flip, PunchTab, LocalBonus, Cardstar, Perka, Perkville and more.
The company has nearly$13 million in total funding from Andreessen Horowitz, Lightbank, and others.
