Shopkick Checks In
Launched in August 2010, Shopkick, the location-based shopping
app that rewards shoppers simply for visiting stores, has been downloaded
750,000 times, quietly claiming to have become the leader in product scans
for rewards. Users have scanned more than 3 million products at 250,000 locations
nationwide, from partner brands Kraft Foods, Procter & Gamble, Unilever
and HP.
The
Shopkick app, combined with the first walk-in location technology, the Shopkick
signal — an inaudible sound emitted from a patent-pending device
located with each participating retailer — verifies the user is in-store,
and then awards kickbucks. Kickbucks, earned by scanning partner brand products,
can be redeemed for in-store gift cards, song downloads, movie tickets, hotel
vouchers, Facebook Credits to play games online, donations to 30 different
causes and charities, and more.
Shopkick said it has more than 1,100 partner
retail locations, including select Target, Best Buy, Macy’s, American Eagle
Outfitters, Sports Authority, Crate and Barrel, Wet Seal, and Simon Property
Group mall properties.
“We have always wanted to reward potential consumers for engaging with
our products at grocery and mass merchandise stores,” said Ed Kaczmarek,
director of innovation at Kraft Foods, in a statement. “Shopkick’s scan
rewards do just that. We also increase consumer discovery across aisles with
multiple Kraft Foods brands they would not have sought out otherwise, further
deepening their interaction with our products. We feel Shopkick is the clear
mobile innovation leader and that is why we have partnered with them.”
Another
unique feature is that the Shopkick technology ensures shoppers getting
the awards are physically in the store. Most other mobile applications rely
on GPS technology that has an error radius of 50 to 1,000 yards on mobile phones.
With Shopkick, a small box is plugged into a power outlet inside the store
with no internet or Wi-Fi required, ensuring the customer being rewarded is
actually in the store.
In an interview with blog.shop.org, Shopkick CEO Cyriac
Roeding expects the uses will go well beyond check-in rewards.
“Imagine what is possible if there is an ‘arc of interaction’ with
shoppers — all the way from when they scan circulars, to purchase — through
the Shopkick app. It can be used to provide rewards, personally welcome shoppers,
and deliver custom offers, relevant product information and more. Engagement
with current and new customers will be taken to a completely new level.”
Despite
Shopkick’s apparent success, a survey of 437 smartphone users conducted in
February 2011 from digital marketing agency White Horse found slow
adoption of location-based technologies. Of those surveyed, more than 60 percent
of active smartphone users don’t use location-based services.
Among those non-users, 70 percent aren’t aware of the apps or don’t
fully understand what they do.
Discussion Questions
Discussion Questions: What types of rewards make most sense to drive retail check-ins? What aspects of these services offer the greatest benefit to brands and retailers? What may be inhibiting consumer adoption of location-based mobile services?
Shopkick has had some negative press lately about how its sensors can be fooled. There’s actually a website where you can download the “Target tone” for instance and check in even though you’re nowhere near a store.
Rather than being discouraged by this I think it’s actually long term great news for the retailers and manufacturers. If you treat Shopkick as a Pavlovian rewards tool that encourages “check in and get free stuff” you’re going to get people gaming the system. If, instead, as Mr. Kaczmarek suggests, you use it to get people to shop cross category, explore unique content, discover other products in the store and learn how to use your product in new ways then you’ve actually unlocked a true shopper marketing tool. Will you need freebies and coupons too? Sure, but that shouldn’t be your primary application. As marketers we need to think through the strategic use of these tools or we shouldn’t be surprised if they just become promotional “one hit wonders”. I love this application and I love that Kraft is thinking it through strategically and intelligently.
Rewards should directly encourage consumption following check-in. Two-for-one deals, free gift along with purchase, etc. Simply rewarding a customer for walking through the door will also lift sales, but most likely not as much as tying rewards to specific actions will.
This is a very innovative idea. Their goal should be to increase market awareness. As more people are getting smart phones, the awareness will be the only thing keeping people from using this application. Most professionals and even a lot of kids have smart phones. But most Moms out there, doing the shopping, are still using flip phones. When you have your hands full with kids and groceries, a smart phone just seems like more work (according to my sisters). They also tend to get their husband’s “hand me downs.” Many moms just don’t have the time to learn new apps. However, new moms are younger and grew up with technology. Also, older moms will continue to upgrade their devices as time goes by. They will learn more about applications available and ideas like this will continue to take off.
The winning incentive to store visitors will create word-of-mouth success stories and in turn increase use and downloads. Special in store discounts and special sales on useful upscale inventory would be the most powerful means to increase awareness and use of the software applications.
It’s an innovative idea and also a bit of a scary one too. What do I get as a reward when I go somewhere I don’t belong?
Some may like it. I wouldn’t. It just gives me an eerie feeling. Really eerie. I’m not sure any level of reward can overcome that feeling. It might not enter the mind of most. It sure does mine.
Shopkick is just a better, smarter, more convenient way of doing coupons. And like coupons, if you’re going to or are already in a store that gives them out, why not use them? Regardless of what the discount/bennie is. Especially in the painless methodology used–mobile.
In our studies with Millenials, they don’t like using traditional coupons and loathe the whole process. So Shopkick is great way to bring them into that same fold their parents are in: coupon saving–but without the scissors.
It’s great when your kids show tendencies like yours without even knowing it, isn’t it?
So let’s turn the glass statistically upside down and focus on the adoption rate of location-based technologies–40%. Wow! These technologies have only been in existence and available for a short period of time so that rate of adoption is fantastic. Then add these adoption rate numbers to the huge numbers of consumers purchasing smart devices and then services such as Shopkick, Foursquare, deserve serious consideration as part of all retail mobile marketing strategies going forward.
It’s time for retailers to start experimenting with these technologies and examining how to integrate them with their customer rewards/CRM systems and their promotional and merchandising calendar.
There are so many great possibilities with Shopkick–I love it! I like the “scan” function of Shopkick. Shoppers who scan items (without necessarily buying), get KickBucks. This is terrific because it’s the advent of self-serve promotions. The shopper is in “consideration” mode and the advertiser gets a receipt of that behavior. The only other mechanism that has worked this way in the past is sampling. And mostly in-person sampling and event promotion. However, the advantages to self-serve promotion are: 1. Mass Communication, 2. Low Cost, 3.Direct (and soon personalized) rewards. This is game-changing for shopper marketing.
Yes, use technology to deliver coupons as “smart marketing.” Geez folks….
A legal lottery would drive retail check-in (no purchase required, like Monopoly at McD’s). The greatest benefit of these services to brands and retailers are variable rewards, enabling decision-tree offerings to pinpoint the premiums and services of most interest to individual shoppers while identifying others in which they might be interested.
The inhibition of consumer adoption of location-based mobile services was spelled out in Tom Ryan’s opening remarks: 70% of 60% (that’s 42%) of “active” (definition?) smartphone users “aren’t aware of the apps or don’t fully understand what they do.” Smartphone users currently account for about 38% of all cellphone users. Assuming that all smartphone users are “active” and that 60% of this 38% “don’t use location-based services,” that leaves 40% who do, or only about 15% of all cellphone users. And, I think that’s artificially high.
The true test of the success of these types of systems is if they change shopping behavior, rather just being used once as a novelty. Though I know some people thrive on the “treasure hunt,” I also know many people who won’t go out of their way to save a few pennies, but delighted when they found there was a savings when they checked out. Quality and product performance are still more important in their sphere.
Sure there are bugs, loop holes and work-arounds with these programs, however, as retailers get more experience, say asking the shopper to wave their phone past a NFC kiosk to ensure they are actually in the store, and then have a special offer appear on their phone or the kiosk, etc, etc, then true loyalty may be enhanced.
There are some nerds out there who love technology and gadgets. I’m one of them! Now that I’m aware of it, I downloaded it last night and can’t wait to go shopping this weekend. My kids downloaded it too. Whether the rewards are immediate or not, it’s always fun to watch numbers go up. It will be interesting to see if they can keep me interested with a worth while loyalty program long term.
The difficulty for CPGs to connect end user identity with products purchased is highlighted here.
Whether Shopkick gains more traction over time will have to do with the value of rewards earning available in relation to the time required by consumers to play the game.
This type of scheme could attract “gamers” who would try to defraud the model as some panelists have noted.
Keeping a relevant set of rewards that are *somewhat* easily earned and watching out for the gamers will be keys to short term success.