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Last week we wrote about NearbyNow‘s new mobile product.

Quoting myself:

Today’s announcement involves a mobile search platform that allows any mobile device user to send product queries via text to a mall’s designated NearbyNow short code. Info will be returned about product availability within that mall. This takes the mall directory to another level and could be a powerful way for mall retailers to increase foot traffic. Promotions, coupons and complementary product info will likely be included  and monetized  in this or future versions of the product, and I hope to talk to the company soon to find out more.

Later last week I got the chance to catch up with NearbyNow CEO Scott Dunlap to fill in some of these holes.

According to Dunlap, promotions and coupons are very much a part of the company’s vision for location-based mobile product search within shopping centers. The company currently offers featured product promotions  a sort of “blue light special” to mall shoppers who actively send in mobile product queries. This involves different featured promotions that are sent to anyone who text messages a product query from within a given mall.

“Most people will receive one within an hour of texting,” says Dunlap. These promos are in addition to the search results users get right away that list the availability of the specific product(s) they are searching for.

The company can also send specific coupons to mobile devices. Whenever there is an available coupon that matches a product query sent in by a user, it is text messaged back to that user. The phone itself can then be brought into the store to redeem the coupon, or the coupon can be printed out at any one of the electronic kiosks the company has placed throughout the malls with which it has partnerships.

“Sometimes we have coupons that are available and we’ll put them in the text message but of course you can’t print off a coupon from a mobile phone, so sometimes we’ll send people to the kiosk to print it,” Dunlap says.

The kiosks also serve as a supplementary outlet for product searches for users more comfortable with a PC-type interface than a mobile phone. Think of these kiosks as a new kind of mall directory that can replace the 2-D map directories often placed at mall entrances. Unlike these traditional directories, NearbyNow’s software can tell you what stores carry what products, and how many they have in stock.

Luckily for NearbyNow, it is tapping into a user base and a demographic (the “mall rat” set mentioned in the last post) that is very comfortable with mobile devices and text messaging.

“The text messaging is much more universal than we thought in terms of people who are comfortable using that technology,” says Dunlap. “But we also have kiosks on site if you don’t want to text. Each one serves a different purpose.”

Dunlap also affirmed the advantage in having direct partnerships with malls. This allows the company to utilize signage to market the mobile search product, and to drill the idea into users heads that it is something they can use by simply sending a text message on their existing cellphones.

“If you are going to take over a geographic area, it’s very helpful if you can advertise within that area,” he says. “One of the reasons why we started with shopping malls was that it’s the highest concentration of products per square foot. Another reason is that the intent to buy is very high among consumers that are already in a mall. And third is the fact that you can advertise the service on-site, which would be very hard to do if you tried to do the same thing on a street in San Francisco.”

The interesting thing is how  on an anecdotal level  stores can track the success of this kind of advertising. Because of proximity, direct responses to promotions can be seen fairly easily if they drive a considerable margin of foot traffic in a short period of time.

“In the one or two tests I’ve done it’s the single most effective marketing thing I’ve ever seen,” says Dunlap. “It’s weird to be able to send something out over a phone and then have people jam into your store 20 minutes later.”

I challenged Dunlap to show me this in action and he sounded excited to make this happen. The next step is to go to a mall with him and see how it works. I’ll report back as soon as I’m able to do that. In the meantime, Dunlap wants to continue growing mall partnerships in new cities and to gain greater density (NearbyNow just signed a partnership with malls that brings it to 20 additional U.S. cities).

“I’m confident we’ll be in 100 malls by November of ’07,” he says. “We’re just juggling now to find out which malls first make sense. We’re looking to roll out as fast as possible.”

We’ll keep a close eye on the company to see how well it can accomplish this.

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