Punchh, a Silicon Valley-based customer marketing solutions firm, announced Thursday that it received $40 million in Series C funding from Adams Street Partners, Sapphire Ventures and AllianceBernstein.
The funding, per the company's press release, will be used to improve the company's AI capabilities as it moves into convenience stores and other brick-and-mortar retail segments.
The company is also partnering with Casey's General Stores, Inc., a convenience store brand that runs 2,100 stores in 16 states, the company disclosed. The Punchh platform is used by almost 200 brands, including Yum! Brands and Denny's, the company noted in its press release.
It seems like Punchh, along with its investors, is attempting to capitalize on the trend of personalized marketing by carving a niche in the convenience store market. Other retailers, including eBay, Nordstrom, Amazon and Sephora, among others, have invested in personalization initiatives.
"Analysts predict ecommerce will account for just 10 percent of total retail sales in 2019, which means about 90 percent of transactions are still taking place in store," Jai Das, managing director, president and co-founder of Sapphire Ventures, said in a statement. "There's tremendous opportunity in brick-and-mortar retail, and brands are looking for ways to better understand their customers and build data-driven relationships that translate into increased customer lifetime value."
Personalization — from tailored merchandise to personalized marketing campaigns — has gained traction in retail. Research from Accenture and the Retail Industry Leaders Association in 2018 found that 63% of consumers are interested in tailored recommendations. Plus, 93% of companies with high-end personalization strategies saw a boost in revenue in 2018, per a 2019 report from Monetate and WBR Research.
"Consumers expect ubiquity of experiences online and off. In-store retail remains extremely popular and is one of the most powerful relationship building channels ever created. However, ecommerce has changed expectations for personalization so dramatically that marketers need to incorporate AI in order to remain competitive," Shyam Rao, CEO of Punchh, said in a statement.