Helping brick & mortar communities thrive

Upside’s software gives customers more spending power by saving them money, and makes merchants measurably more profitable by earning them business they wouldn’t have earned otherwise.

November 8, 2019
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Helping brick & mortar communities thrive
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Helping brick & mortar communities thrive

As originally published here.

Online merchants have revolutionized the shopping experience, and consumers love it. Their platforms are convenient, the options are seemingly endless, and each of us has a uniquely tailored experience. We see this when our search results are personalized to our location and interests, and when e-commerce recommends products we didn’t know we needed until we saw it.

My experience with “personalization” began 14 years ago at Google, when content providers and advertisers were moving online in big ways. These merchants used new tools to personalize and measure every interaction with their users, and they thrived. This shaped the way the web functions today, where personalization has become an expectation.

Our behavior online tells websites something about us, which allows content providers to customize our experiences and make shopping more enjoyable. That’s not just cool; it’s efficient. It’s how the Internet optimizes the societal value created with each transaction. Tack on almost instantaneous delivery and you get the modern, hyper-efficient, shopping experience.

Why Upside?

Given this context, it’s natural to ask if brick-and-mortar businesses have become obsolete. The reality is that most of us enjoy our old haunts or discovering new ones. These businesses — from large chains to small boutiques — make up our communities. They provide places for people to congregate and find new or familiar faces. But the real world doesn’t have cookies or log-ins to help personalize every interaction, and as you might have noticed, brick-and-mortar businesses are having a hard time keeping up with the online marketplace.

We created Upside to serve as the platform that digitally personalizes brick-and-mortar businesses. By making interactions with customers more efficient, we can create the same delightful shopping experiences in our neighborhoods that we’ve come to expect online.

Our friend and advisor, Hal Varian, developed an economic theory that has become the bedrock of our model. His theory says if we know what a customer has done historically, and we know what that customer needs right now, we can design a personalized offering that maximizes the customer’s purchasing power, the seller’s profitability, and societal value overall.

In other words, Upside’s software gives customers more spending power by saving them money, and makes merchants measurably more profitable by earning them business they wouldn’t have earned otherwise. This makes each transaction more efficient and, in turn, makes businesses more efficient. When businesses do better, communities grow stronger.

This is a big idea. We believe we can increase the purchasing power of US consumers and the profitability of US brick-and-mortar merchants by over 25 billion dollars per year. Adding this much value back into our communities annually would have an enormous impact. To put this giant number into perspective, if aggregated, this value could feed more than 8.3 million people for a year, put 2.5 million people through all four years of college at a state school, or even pay the annual income of 425,000 American families.

… And that’s just in one year.

To break it down further, let’s consider what these aggregated numbers mean for you as a hard-working individual and for the business owners who live on your block. Increasing your purchasing power by over 500 dollars per year on your gas, grocery, and food purchases adds up. Taken together, this can provide a buffer between paychecks or fund that getaway you’ve been dreaming about. Similarly, earning 10–20% more dollars in incremental profit per year allows business owners to improve their facilities, hire more employees, or could even mean the difference between staying open or closing their doors forever.

It’s not dramatic to say Upside is revolutionary. There is a long line of discount products and apps that give money away to users that were already going to make a given purchase. That model is not personalized to the customer and is damaging to the merchant. Instead, Upside is a tool that ensures each transaction is measurably beneficial to both the customer and the merchant.

So we created a gas app?

This experiment to personalize local commerce had to begin somewhere. After a lot of analysis, we chose a somewhat surprising first vertical: gasoline. Why? Because its pricing was simple to personalize and everyone buys it. Our users are able to get five to fifteen percent more gas for their given dollar. For each individual, that is a considerable boost to their purchasing power on something they need to buy regularly. For merchants, Upside is increasing their net profitability by two to five times on each purchase; by bringing them profit from transactions we can prove they would not have earned without our platform.

We are excited to say our experiment is working and our users and merchants see its value. In the last 12 months alone, the number of transactions through the app on a daily basis has increased seventeen-fold. By the end of 2019, 20% of all gas stations in the United States will be on Upside.

Where do we go from here?

Our user base and measurable results are enabling Upside’s platform to expand into new verticals. We’re already working with a significant number of restaurants, grocery stores, and coffee shops on the app, and the possibilities for growth are endless. Up next are pharmacies, hardware stores, clothing retail, dry cleaning… if it’s in your community, we plan to help.

We’ve also started to go beyond personalizing promotions. Now, we are helping to personalize experiences. Once launched out of alpha, these features will give businesses a better idea of who is walking into their stores — without compromising customer privacy — to help merchants digitally tailor their customers’ experiences, just like they would online. For us, as consumers, this will make for a faster, more convenient, more enjoyable in-store shopping experience. Our software will also power brands, enabling them to connect directly with us walking through their doors.

Let’s think about what these personalized experiences could look like in practice. Imagine pulling into the gas station when it is freezing cold outside and having the manager come out to pump your gas because the app told him you’re a regular. Or trying on jeans in your favorite clothing store and receiving a digital offer for a second pair at half price. Or receiving a notification while shopping at your regular grocery store saying the avocados in Aisle 2 are perfectly ripe and, since they will be too soft to sell tomorrow, you can get as many as you want right now for half price. Or impressing your date at a restaurant when the chef comes out to welcome you and review the menu because the app told staff it’s your first time there. The possibilities for these kinds of enjoyable, personally-tailored experiences are endless.

Why you?

Fundamentally improving all brick-and-mortar commerce is an exciting proposition. Upside is not just a place for big thinkers or problem solvers. It’s also a place for people who believe in making their communities — our community — stronger. Our team works around brick-and-mortar merchants, eats at brick-and-mortar restaurants, and buys from brick-and-mortar grocers.

Does that make us anti-delivery or anti-online commerce? Absolutely not. Our team is made up of convenience-loving, movie-streaming, meal-kit-ordering people just like you. But we do believe we can level the playing field and create an environment where the online marketplace and brick-and-mortar businesses can compete in economic harmony.

Upside is a high-impact company, and we’re hiring. Let us know if you’d like to become a part of the community that helps communities.

Helping brick & mortar communities thrive

Alex Kinnier

Linkedin - Upside

As co-founder and CEO of Upside, Alex Kinnier is working to transform brick-and-mortar commerce. His success in growing Upside into a company driving $5B+ in commerce annually was informed by his years of experience leading product development teams at Opower, Google, and Procter & Gamble. Outside the office, Alex is an ardent technologist and investor, always on the cutting edge of products with the potential to change the world.

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