Friday, April 1, 2011

Start-Up Watch COD: shopkick rewards retail visiting, browsing and buying

Thanks to ad:tech for publishing this first.

There are a lot of mobile shopper marketing initiatives out there today, but most are focused on the very bottom tip of the buying funnel. Essentially, influencing brand choice and making it easier to buy.

Nothing wrong with that approach. As a matter of fact, for a lot of companies and a lot of situations, there’s a lot right about it. But are there other ways to help retailers and brands other than delivering instant coupons?

The people behind shopkick envisioned something different. Instead of focusing on delivering cents- or dollars-off promotions at the point of shelf, shopkick rewards consumers simply for visiting a store and locating products on the shelf. And while price promotions are PART of their offering, their overall program is geared toward making visiting stores and learning about products more fun and rewarding. They ask, ‘why shouldn’t people be recognized and rewarding simply for making a trip to a store?’

Shopkick shares a lot of characteristics with Four Square and Gowalla. Users download the iPhone/Android app and open it to a points interface that rewards consumers with “kickbucks” for several kinds of actions:

1.“Checking in” at a store. Review a list of nearby businesses and click on their listings to earn points. In my location (Oakland, CA) there were dozens of listings of small businesses, for which I could earn a couple of points simply by tapping their listing and examining a discount offer on a good that they sold. Many of these offers were for Kraft and Unilever products sold at the stores. To claim the points, you scan the UPC by taking a photo with your smart phone.
2.Walking into a participating retail chain. Simply by going to one of its participating retailers, the consumer earns kickbucks. The brand has signed up an impressive set of major retailers even this early in its existence, including Best Buy, Crate & Barrel, Macy's, American Eagle, Sports Authority, Target, Wet Seal and major Simon malls, in 18 major markets.
3.Scanning/Sampling items. As preliminarily discussed in point one, consumers get additional points by scanning items available in the store. These point totals tend to be far higher than for items in nonparticipating stores, but then the retail prices of these goods tend to be higher as well. An example is an offer from Macy’s that gives the user 100 points for getting a sample of D&G Light Blue Cologne. After getting the sample, the clerk lets the consumer photograph the UPC.
4.Referring new members. Users can also earn significant kickbucks by getting their friends to sign up for shopkick. To get points, you need to communicate a special code to your would be referrals.

Here's the sizzle vid. Note, it's also available for Android.

In addition to enabling the consumer to earn kickbucks, the application also delivers discounts on purchases within the participating stores at which you check in. For example, you might get 20% off apparel purchases or a $5 discount on a movie DVD.

It’s very easy to rack up points quickly. But what are these kickbucks, anyway? Well, a lot. The app offers a variety of gift cards for points, Facebook credits, plus luxury items like Coach purses and flat screen TVs for significant point counts. There’s even a Princess cruise trip available for points.

Many members, however, use to give to charity. Users can redeem their points for actual cash contributions to more than 30 charities that participate with the service.

For a retailer, the value of shopkick is immediately apparent. More traffic, and likely more sales through its innovative rewards for locating and sampling products. For product brands, shopkick can be used to help grow demand for goods – via discounts and the awareness and purchase intent that comes from locating and interacting with a good in order to scan it.

For me, a big part of the shopkick appeal is the play value and the INDIRECT rewards system that drives it. By indirect I mean you aren't necessarily paying less for something right at this very second.

As a brand marketer, I am increasingly concerned about the discount culture that we are cultivating through both offline and online promotion. While there are certainly brands that are selling a lot of goods at full value still, many many more have fallen into a trap of discounting the VAST MAJORITY of their purchases. That is LITERALLY diminishing the value of brands.

I am by no means opposed to promotion, but the goal of a promotion should be about more than just lowering the retail price of a good on an ongoing basis.

And that’s what’s different about shopkick. Many of the activities that shopkick rewards are not in the form of immediate discounts but rather in the points or kickbucks system – a system that is based upon delayed gratification. It gives a retailer or a brand a way to grow sales and traffic without simply cutting prices.

As we saw earlier shopkick had an impressive list of participating national retailers. Their consumer uptake is also impressive. In February of this year, they announced that more than 100 million checkins had been recorded.

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