Location-based app Shopkick launches with Best Buy, Macy's

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Shopkick, a location-based shopping app that allows consumers to earn rewards and discounts at retail outlets, launched August 17. The service has partnered with Best Buy, Macy's, American Eagle Outfitters and Sports Authority for rewards programs.

When opened, the application picks up a high-pitch sound and automatically “checks in” customers who visit a store. The app is now available for the iPhone, with plans to expand to Android devices within months.

Users accrue points, or “kickbucks,” which are redeemable for gift cards, Facebook game credits, music downloads or charitable donations.

Shopkick verifies that a consumer is actually in the store, a differentiating point from other location-based services such as Foursquare and Gowalla, said Cyriac Roeding, Shopkick's cofounder and CEO. Similar services only know that users are in the vicinity.

“This allows [retailers] for the first time to actually provide meaningful rewards to people who visit,” Roeding said. “Why is that interesting? Because the No. 1 problem for every retailer is foot traffic. The conversion rates are so good for physical retailers. Once you have [customers] inside, you have a really good chance of converting into a sale.”

Consumers visiting Macy's, for example, will see a bubble appear on their iPhone saying, “Welcome! 40 kickbucks.” Afterward, a list of in-store offers appear. Customers can accrue additional points by scanning the barcodes on select products with their phones.

Kickbucks can be accumulated and spent at any of the partners. For example, a shopper may earn his or her points at Macy's but redeem them for a gift card at Best Buy.

Shopkick can be used at Best Buy, Macy's, American Eagle, Sports Authority and major malls in New York, Los Angeles, San Francisco and Chicago. Roeding said he expects to add more markets and rewards providers.

Unlike Foursquare and Gowalla, Shopkick doesn't allow consumers to share their whereabouts with friends. However, that is in Shopkick's future plans, Roeding said.

Roeding said Shopkick users shouldn't be concerned about their privacy. They can share as much or as little information as they'd like, and they can turn the application off after entering the store, he said.

However, if customers enter their Best Buy Rewards Zone card number, for instance, Best Buy can use their purchasing history to target offers to them through Shopkick.

“You are in total control. You can also not even tell us your age and gender if you don't want to,” Roeding said. “We believe the consumer is the king, and we need to make sure the consumer is in control.”

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