Scott Dunlap is the CEO at NearbyNow, Inc. They have found a convenient, non-intrusive, and useful way to combine the power of the internet and mobile phones to enhance the shopping experience. In his spare time, Scott maintains his energy for NearbyNow through trail running, ultrarunning, and triathlon running. He gives a whole new meaning to the phrase, "shop till you drop." Read more about his trail running experiences on his blog here.

What is NearbyNow all about and what are its unique features and competitive advantage in this space?

NearbyNow is making shopping malls “searchable” so that consumers can find any product, brand, or sale at a shopping mall before they shop (on the mall Web site) or while at the mall (using their mobile phone). The service is directed at one of the biggest growing trends in shopping today – researching online before purchasing in-store. The Internet and mobile phones will actually influence more in-store sales than online sales in the next four years, reaching over $1.1 trillion in 2011 (Forrester Research). It also sets us up nicely for another big trend on the horizon – location-based services, (ie. finding things around you using your mobile phones).

We spoke to thousands of shoppers before launching the service and found some common themes. Shoppers love to buy in-store for many items like apparel, housewares, furniture, “new” items, etc. because they want to try it on, try it out, etc. But it was still difficult to find out what stores carried the items they wanted. The current state of local search wasn’t helping much, every city is lucky to have 5% coverage of stores and rarely has product-specific information. It’s not very useful to search for “Air Jordans” and not have any of your favorite apparel stores come up.

We thought we could better address the need with a whole new approach. NearbyNow takes a geographic area, such as a shopping mall and makes it 100% :searchable" down to every store, item, and sale. We pull together inventory information from all the stores in a mall so you can search for “jeans,” “shoes on sale,” or something as specific as “blue and white halter top bikini”.

The search results contain all the stores in the mall and more importantly, do NOT contain 1 billion results from around the world that matched on keyword. Shopping malls were a great place to start because they have very high concentration of products and “high intent to buy” consumers.

The name NearbyNow is relevant for both consumers and retailers. Consumers can find nearby products right now, and retailers can target nearby consumers looking for what they have right now.

What kind of a business model does NearbyNow operate and how has it evolved in light of our changing economy?

Our business model is largely search advertising with the added benefit of proximity (“nearby”) and real-time (“now”). Most shoppers find us because they started at Google looking for “Nike Air Jordans” in their area and thanks to our service, the local mall comes up as a result with many stores. As shoppers use our site to search the mall, we sell text and banner advertising alongside the results similar to Google and even allow consumers to reserve items to pick up. A majority of our Web visitors are intending to come to the mall within 48 hours and make 4.3 transactions. It’s a great time to brand. We can also do very targeted advertising with our mobile solution directly in the mall, for example, if we have 600 people searching for “jeans” in a mall on a Saturday using our text message search, a retailer can send a text message offer to them instantly. That’s contextual marketing in real-time, targeting nearby consumers.

We are definitely riding some interesting trends in the industry. Contextual marketing is in full swing much in thanks to Google, Yahoo, and Microsoft. What that means to us is that we don’t have to explain what “search marketing” is, and most advertisers are looking to shift media dollars into more measurable outlets than TV and newspapers. Mobile usage is going way up in all forms (text messaging, web, etc.). Combine these trends and it’s easy to see that contextual marketing will “place shift”, and you can begin targeting people who are not only looking for what you have but are physically nearby. I like to think of it as “keyword” morphing into “keyword + proximity + now”. We’ve found a way to address this trend without waiting for the phones to have GPS so we’re ahead of the game by a few years.

Core to all of this is creating a service that isn’t intrusive to consumers. Nobody wants to get spam from Starbuck’s as they walk by. If consumers want to search the mall, they opt in with a text message (for example, "texting" VF to 632729 [NEARBY] to search Valley Fair Mall in San Jose, CA). We limit the ads they get to 2 per hour, and only send those that are relevant to what they are searching for. If we don’t hear from them for 90 minutes, the service shuts itself off. No hassle, no spam.

I know you must be busy working on your expansion plans to more than 100 cities by the 2007 holiday shopping season and I am sure everyone can anticipate your launch. How fast are you moving?

We are expanding very quickly, launching 1-2 malls per day. We are in 60 cities right now and should be well over 100 by the 2007 holiday season. Over 60% of all US shoppers will see our service in action at their local mall by November so we’re very excited. In the last holiday season, the ability to reserve items to pick up was very popular, and we expect that to continue at a much larger scale. Having all sales and coupons at the mall accessible by mobile phone was also big. We have a number of new services we will be launching as well.

We already have hundreds of malls signed up for the service so we will continue to expand in North America for 2008. From there, you will see us extend beyond the malls into other shopping areas and expand internationally. When location-aware phone begin to reach scale in a few years, it will go sky high. It’s not hard to see that location-based advertising could quickly reach $15-20 billion annually, and by that time we will have a full roster of retailers and brands practiced at targeting nearby customers in real-time. It’s really a phenomenal opportunity.

Message to leave with:

NearbyNow has a new approach to local search that shows how innovative business models can accelerate an industry. We’ve found a way to get inventory online, target nearby consumers without waiting for GPS phones and make nice clean searches with “proximity search”.