Giant Eagle Shopkick Program Tied to Purchases
Giant Eagle became the first supermarket chain to sign on with Shopkick, the largest location-based shopping app with over 2 million U.S. users. A major difference versus other Shopkick programs with retailers is that points are rewarded only upon purchase of specified products rather than upon "checking in."
Initial partners in the program, entitled Kickbuys, are Procter & Gamble, Kraft Foods and Unilever.
After downloading the Shopkick app on their smartphones, Giant Eagle customers enter their rewards card number and receive "kicks" for purchasing specific products they choose in the app. The rewards are earned once the products are actually purchased with the Giant Eagle Advantage Card at checkout. The users are notified when the applicable kicks are credited in their Shopkick accounts within two to 24 hours. Points can be redeemed to buy song downloads, movie tickets, travel vouchers, and Facebook credits.
In other programs Shopkick has done with Target, Best Buy, Macy’s and others, customer "check-in" rewards are instantly awarded after a customer just walks into a participating retailer.
"Much like our fuelperks! and foodperks! customer loyalty programs, Kickbuys are another unique way for customers to be rewarded for choosing to shop in our stores," said Rob Borella, Giant Eagle spokesperson, in a statement.
"For retailers, Shopkick made huge impact by detecting actual in-store presence," said Sonny Jandial, associate marketing director, P&G FutureWorks Silicon Valley, in a statement. "For brands, they’ve now done the same: rewards tied to the confirmed purchase of our specific products. This is a major breakthrough for mobile applications. For example, a shopper purchasing Crest Whitestrips at a participating retailer will earn 1,000 kicks — which is enough to redeem immediately for a gift certificate in the Shopkick Rewards Mall."
"This is what brands have been dreaming of for years," added Ed Kaczmarek, director of innovation at Kraft Foods. "We have always hoped that we could almost instantly reward consumers for buying our specific products at a grocery store, and even interactively via their smartphones. Shopkick is creating a dynamic mobile loyalty program, which is of great value for brands like ours. This is a unique opportunity to increase engagement with our consumers, further deepening their interaction with our brands."
Discussion Questions
Discussion Questions: What do you think of location-based apps rewards tied to purchases on specified products over check-ins? How would you rate the overall marketing opportunity around location-based apps for supermarkets versus other retail channels?
As a retailer, I want to offer rewards based on purchases. But I also have to look at the landscape. If other retailers are offering perks just for ‘checking in’, how do I ‘sell’ the program based only on purchases. Do I up the ante and offer more points or rewards than my competitors? That would be my strategy. Using location based apps is a no-brainer for grocers considering they high volume of foot traffic and multi unit layout. Chances are, the same customer will shop your other locations if they are loyal to your brand.
As I’ve said before, there is a large number of ways to get consumers to buy, and with mobile apps available, plus incentives to buy, it will do OK, but most folks will probably not opt in. Just my opinion, but in these tough times, a really great bargain isn’t going to be found tied in to an incentive program due to low margins.
Giant Eagle will do very well with Shopkick programs tied to purchases because they are one of first to do so. For a period of time this offers a point of differentiation which is often quite productive.
Rewards tied to check-ins versus products purchased just highlights two separate steps in the in-store purchase cycle. The former denotes potential intent to buy. But what stops them from leaving the store after they’ve collected their kicks? In either case, you’re still enticing consumers to select your retailer and brand out of the mix.
Location-based apps are particularly effective for stores that offer services/products that are, in some way, targeted to the local market. But on a macro level, technology that helps to localize a brand, helps to personalize it. If implemented properly, this can be a great way to engage consumers on their level, as opposed to in a “mass” way.
The key, as always, is a thought-out strategy, and a firm execution. Technology is tempting — but it’ll backfire if you don’t apply it in a way that makes sense for your brand/service. That’s why bringing a partner agency on board is so valuable.
A surface perspective suggests that customers will buy and begin a process that achieves loyalty, because they get something for something. Like anything else Giant Eagle should monitor the competitive landscape to make sure their offering evokes, engages and endures.
Personally, I don’t think this will be a major success: using whizzy technology in another way to pay your customers to buy. This is not “salesman” driven thinking, but one more foolish linkage of “promotion” to price. To me, it’s as if, as an industry we have painted ourselves into a corner (dug ourselves into a hole,) and dammit, we’re NOT going to learn salesmanship. But we’ve now acquired this nifty new shovel. WOW! Think of the hole we can make now!
It’s the wrong direction.
It’s just another way to pay the consumer to buy a product. With all the applications out there, any efficiencies that may exist will be lost to fragmentation. This can be good for retail but not for a manufacturer.
This is heading in the right direction, providing value to customers for customer activity that is valuable to the retailer and/or manufacturer. I do agree with a comment made that there could be multiple value “levels” offered, including a lower level for checking in and higher level for purchases and possible others for various levels of value provided by both sides.
These are still very early days for these kinds of initiatives and I would expect that there will be lots of trial and error as companies work out the value proposition with their customers.
Rewards for check-ins is a better idea. Give people a certain amount off a purchase of $50 or more and then additional offers can be delivered. Start by winning the trip.
This approach has some pros and cons.
Pros:
– Can drive consumers into the store
– Can elicit additional purchases of promoted brands
– Disconnects the incentive (paid in “Kicks”) from the slippery slope of price discounts
– Tied to actual purchases means that, in theory, it should be completely measurable
– Connection to loyalty number means that, in theory, the promoted products and the level of reward can be targeted based on past purchase history, which is hugely important for brands and retailers alike
Cons:
– Requires yet another app, and yet another action on the part of the consumer
– Suffers from the “Venn diagram” problem: draw a circle around all 2 million of Shopkick’s users; draw a circle around all Giant Eagle card-holding shoppers; the number of shoppers in the intersection is probably a few tens of thousands, at most.
– (For the retailer) rewards are paid in a currency that doesn’t drive more business into the store (unlike, say, ExtraBucks at CVS, which drive additional trips)
All in all, I applaud Shopkick and Giant Eagle for trying something new, and I’m very interested to see how many shoppers actively use the program, and what it does to their long-term purchase patterns, both for promoted items and store-wide.
Some stores in my neighborhood — supermarkets and DIYs — recently removed their flavor-of-the-month self-checkout lanes. So what does that have to do with the flavor-of-the-month, location-based retail reward apps addressed in this discussion? Just that: They’re the flavor-of-the-month.
Have you purchased a smartphone recently? If so, while setting up your phone do you remember the questions that dealt with the constant tracking of your phone’s location via GPS? I chose “NO” for those questions, understanding that I was foregoing some of the more advanced mapping and driving instruction functions available on my new phone. I treasure my privacy and am unwilling to sell it for maps, driving instructions, and — in the case of Shopkick — a retail store’s ability to recognize me when I walk in their door. When you sign up for Shopkick you must also activate the GPS tracking function on your smartphone. It’s the same technology, and it opens up all of the GPS location functions that are also there — some of which you may not want. If that’s your preference, cool. But, I recommend understanding your options and their broader cost to you as a private citizen before participating in location-based marketing programs.
The obvious advantage is the sale in that store versus a transportable premium. Helps the retailer participating in the program. The biggest negative that I see is the external currency. Adds another qualifying factor for consumer interest. How many people will consider this a monetary reward? Seems like a reincarnation of S&H Green Stamps (etc).
I think it depends on what you’re trying to achieve. Check ins are great for driving traffic but have not yet proven they actually contribute to sales or loyalty. If you’re trying to drive loyalty, rewarding for purchases makes sense. I think the idea of earning points for purchasing specific products is great, especially for grocery; it is a great way to cross-sell and a great way to monetize the app (i.e. through a potential partnership with the CPGs). It is also really valuable to the consumer if, over time, the application understands my purchasing behavior and can reward me accordingly. There are lots of opportunities for mobile apps in grocery because consumers shop in patterns and are habitual buyers and there is so much opportunity for interaction between the shopper and the product in this setting.
Location based apps that reward your behavior based on shopper interaction and purchase are one more way to help compel shoppers back into the store. As technologies like Shopkick and Modiv media evolve, shoppers will be able to be rewarded in-store in real time based on past purchase behavior, store interactions as well as cross-sell/up-sell opportunities.
The important focus however should not be the check-in or behavior technology but rather the persistent reminder that for technology to be effective in-store it need to deliver a benefit to the shopper. Without relevant valued content the technology would be pointless.
Tying rewards on specified products is much better than check-ins for brands and retailers. However, two things to bear in mind. 1) What is the objective? If it is purely to drive foot traffic and then cross-sell some new products in a retail store, then check-ins work just as well. 2) What is specifically location-based in tying a promotion/reward with purchase of a SKU? One could deliver this mechanism using the loyalty card itself and something retailers have done without the need for location-based apps on a mobile phone.
The opportunity to use location-based apps is significant when you promote different things to different users, allow retailers to do different real time offers based on traffic patterns etc. In a nutshell there is tremendous value in going down the location-based app path. And we are only seeing the beginning of this. Using predictive analytics on the data collected can make retailers and brand far more sophisticated.
The opportunity for grocers vs. other retail channels is going to depend on the objectives, number of users, type of promotions etc. But one thing is for sure, location based apps and marketing is relevant for both and it is only going to grow.