Will Smart Phones be the New Driver of Local Commerce?

Over the last year or so, location-based services that integrate tightly with mobile phones have been one of main themes watched by the venture world, and for good reason. As we continue moving forward in a world influenced less by mass media and more by our interactions with new technology (social networks, smart phones, etc), it only makes sense that these platforms will become the primary channels for distributing new information, products and services.

If you look closely at some new emerging startups, you’ll begin to get an idea of where this is all headed.

shopkickShopkick, which recently debuted partnerships with Best Buy, Macy’s and others, is a new service that automatically rewards users just for walking into stores. The service installs sensors in various locations that alerts their system when you walk into a particular store, which then can offer you special deals from the store you’re at.

Another spin on location apps is connecting users to time-sensitive deals offered by local merchants based on the user’s location. TappLocal and PhoneTell are two startups aiming to tackle this, but in different ways. TappLocal (which is in private beta) serves local business ads inside other mobile applications that already have millions of users. TappLocal tracks their location, then alerts them with time-sensitive deals based on where they are. PhoneTell also aims to connect users to special deals based on location, but is more of a 411 for smart phones, with a bunch of extra goodies outside of locating deals through hyper-local search.

phonetellThe app serves as a super smart phone directory, allowing users to search for relevant businesses based on their location (including by category, such as “pizza slice”, which would yield results of the closest pizza place that serves by the slice, is currently open and has strong activity on services like Yelp and Foursquare). PhoneTell also offers some handy features like uncovering hard-to-find customer service phone numbers, advanced caller id and one-touch text messaging to let callers know why you are unavailable and when they should expect a call back.

Another interesting take on this space is GroupTabs, a recently-launched service that offers Groupon-style special offers when a group of people “check in” to a local venue.

It’s clear that this space is going somewhere. It will be interesting to see how all of these apps fare against more established location-based apps should they decide to go after this market. My money is on the apps that can accomplish strong user retention by providing easy integration with a consumer’s daily activities and a lot more value than “checking in” somewhere.

Have thoughts? Leave a comment below.

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