• by Laurie Sullivan  @lauriesullivan, May 7, 2014

LoyalBlocks has created a self-service platform that enables small businesses to build their own loyalty programs and integrate beacons to direct message consumers in the store.

The mobile device creates a screen to enhance the shopping experience, and provides the merchant with another communication channel even if the consumer isn't in the store, per Ido Gaver, CEO at LoyalBlocks. About 40,000 locations use the technology to build loyalty programs and connect with consumers through the beacon technology.

Gaver refers to the platform as "a digital interactive membership card" similar to something United Airlines or America Airlines might offer, only for small businesses. "Building a product to support SMBs isn't a trivial thing," he said. "It's a tough market. They only care about adding value."

Merchants create their own loyalty program and place a beacon in their store. After consumers join the retailer's loyalty program and download the LoyalBlocks app, the beacon technology wakes up their phone as they enter the store. It triggers the merchant's loyalty app and pushes offers, rewards, discounts and messages from the business to the consumer. The merchant uses the platform to design their own free custom application.

Companies like Ciao For Now, Submarina, and TGI Fridays use the basic platform. LoyalBlocks, founded in 2011 to help small businesses monetize their loyalty programs, has been working under the radar to build out its network of about 40,000 U.S. merchant locations. Now the company has added beacons to the experience with help from its engineers based in Israel. The service is used by "hundreds of thousands of consumers" in the U.S., Gaver said.

Headquartered in New York City, LoyalBlocks has raised more than $12 million in funding. About $3.2 million from Gemini Isreal Ventures, and about $9 million from General Catalyst Partners, the investors behind successful start-ups Warby Parker, Snapchat, and Boxee.