Much of the focus over the past three years has been on online adoption, but as long as 90% of U.S. supermarket sales are still in stores, companies like Clerk are looking to bring some digitalization to the brick-and-mortar supermarket experience.
CEO Marlow Nickell founded Austin-based Clerk in 2016, and as he watched Amazon and Walmart plow ahead into the marketing and product merchandising spaces, he saw a need from the rest of the space that lacked the capacity to innovate there.
The company created a digital advertising network called Grocery TV and provides screens, initially in the checkout, for brands and retailers to use with the aim of improving the shopping experience.
Clerk raised $5 million in Series A financing led by Silverton Partners two years ago and has since grown its network size 350%, from 750 stores to 2,700 stores today. Next month, the company is planning its largest installation yet which will take it to more than 3,000, Nickell told MovieUpdates.
The company is now in all 50 states and has more than 14,000 displays at retailers such as ShopRite, Bashas’ and Cub Foods. It has partnerships with programmatic networks, including The Trade Desk and Yahoo DSP, to make it easier for agencies and brands like Chase and Anheuser-Busch to reach audiences of more than 30 million grocery stores.
In addition, the company launched a SaaS merchandising product that uses machine learning to ensure products are in stock and stored correctly. One of the collaborations there is with Dotdash Meredith, announced in 2021, who will use Clerk’s technology to manage its publications in more than 15,000 stores per quarter.
Clerk’s digital displays are not a new concept, in fact there have been a handful of companies over the past decade that have brought digital signage into the aisles of supermarkets, mainly for in-store advertising. These include NoviSign, ScreenCloud, Cooler Screens, EasyScreen, and In-Store Broadcasting Network. You may also remember Premier Retail Networks as one of the pioneers in this area with its Checkout TV product that hit Walmart stores in the US.
Nickell noted that technology costs and a technical focus – which is his background – were necessary to keep technology costs down.
“We saw that companies are raising more, but struggling to get hardware to market,” he added. “Hardware is hard and if you don’t do it right, it can be expensive.”
Where he believes Clerk is doing well is by having a ‘First Principles approach’, which allows the company to offer a cheaper cost structure. The rise of social media also makes in-store advertising easier as more people are used to ingesting a lot of content.
However, there remains a delicate balance between throwing up screens and disrupting the customer experience. “You have to be attentive there because if that happens it will be hard to get off the ground, and supermarkets don’t want to mess with what they already have,” Nickell added.
Meanwhile, in addition to growing stores and screens, Clerk also tripled its sales in the past two years and turned profitable last year. With efficient operations, the company decided to invest in growth and raise $30 million in a Series B financing round led by Sageview Capital.
As part of the investment, Sageview partner Dean Nelson will join Clerk’s board of directors, while Sageview CEO Roberto Avila will join as a board observer.
While the Series A has scaled the market and the team, the Series B is pure growth. Clerk has 30 employees and will be expanding the team, partnerships and number of stores over the next two to three years. In addition, funding will go to technology and product development, including new merchandising analyses.
“When we have the opportunity to grow, we want to take it,” Nickell said. “We will use this round to catapult us into the market. Something unique about this space is that supermarkets want to know you stick around, so to be a successful technology company in the space you need to build a sustainable business and a company that will be a tech partner going forward.”