I have vivid memories of my father’s coupon organizer. It was a ritual every Sunday. Around 10 am my father and I would begin poring over the store circulars, looking for the steepest discounts on everything from razor blades to Honey Nut Cheerios. I was his right-hand gal—coupons under 45 cents and mail-in rebates were deemed not worth the effort, and buy one get one frees were gems (we occasionally high-fived).
How many of you reading do this anymore? I’d venture to guess not many. So, what happened? An article I wrote this week about a company called shopkick gave me a clue. Convenience. We still want the best deals, but we’d rather have a comparison shopping engine tell us the lowest price instead trekking to Best Buy, Radio Shack and Micro Center (or even their web sites) to compare. We’d rather get an e-mail with a discount directly delivered to our inbox than get ink on our hands paging through the Sunday paper.
We want rewards and discounts, but we don’t want to work too hard for them.
If my hypothesis is correct, shopkick, and—others like it—are on precisely the right track. Shopkick, which received $15 million in funding this week, is developing an app that will use geolocation technology to deliver deals, discounts and rewards to a mobile device for shops you are close to at that moment. Best Buy and Macy’s—no small retailers—have already signed on before even seeing the finished product. It’s the Cadillac of discount programs for the lazy shopper. Not only does it send the deals directly to something consumers have with them at all times, their phones, but it sends deals for stores that are just steps away. I think about how many times I’ve printed out a coupon, or even received a mobile offer, but don’t ever get to the store, and then suddenly it’s expired.
Now, it should be noted shopkick was in a prime position to receive funding. The founder, Cyriac Roeding, also happened to be an entrepreneur in residence at Kleiner Perkins Caufield & Byers, one of the big VC firms that contributed to the funding pot. Between being in a hot space and having A-list support behind it, raising money probably wasn't going to be a problem for shopkick. But money talks and $15 million speaks very loudly for a mobile startup with a retail focus.
It seems to me venture capital firms are hearing loud and clear with shopkick the mantra consumers have been chanting for over a decade: Convenience is King when it comes to shopping. E-commerce is growing at a much faster clip than bricks-and-mortar in part because it can be done at midnight in your PJs. E-retail will grow at five times the rate of traditional retail for the next decade and its year-over-year dollar increase will overtake offline retail by 2019, Goldman Sachs predicts. Mobile commence is taking off in part because it’s available everywhere all the time. E-commerce platform providers are signing deals right and left with mobile commerce technology providers as they realize how big m-commerce will be (or, some might say, already is). Venda partnered with m-commerce vendor Digby, Yahoo is integrating m-commerce technology from Unbound Commerce, and platform providers Shopatron and BigCommerce are going it alone, developing their own m-commerce technology that they’ll offer to their e-commerce customers.
Now, location-based mobile deals take the hunt for the deal and the commute to redeem it out of the equation. If that’s not convenient I don’t know what is. While essentially this could work with, say, an e-mail delivered with a discount for an online store; the consumer wound need only go to that URL to get the deal. But for big box merchants that have invested millions in store leases, store-based POS systems, and sales associates, bricks-and-mortar sales still matter—a lot. This technology could be a big boon, encouraging nearby shoppers to take those extra few steps and stop on by. The only question is–what comes next?