September 7, 2010, 1:35 PM

F.Y.E. uses geolocation apps to lure mobile consumers

The multichannel retailer launches a foursquare-based promo effort.

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F.Y.E. , a multichannel retailer that sells movies, music and games, hopes to get more shoppers into its 550 retail stores by offering discounts for using foursquare, a geolocation app for mobile phones.

Foursquare enables retailers to offer rewards to consumers who use the app to check in at retail sites. A consumer who has downloaded the app and checks it during, say, a walk around a mall can receive check-in offers from retailers such as F.Y.E. The consumer then would visit the F.Y.E. store and show a store clerk the offer, displayed on the mobile screen.

Consumers who do so receive 10% discounts on the purchase of one item per day. Consumers who check in at least five times during a calendar month receive $5 off a $30 purchase. Since the promotion began about two weeks ago, consumers have redeemed more than 100 discount offers, says Barry Burmaster, the retailer’s marketing director.

The retailer decided to launch this service because it largely serves consumers who are between 14 and 24 years old. “We always see them in stores with smartphones,” Burmaster says. “And most of our managers are in their 20s, and they are asking us what took so long to do this.”

The retailer worked with marketing firm Media Logic to develop the loyalty program. The program could evolve to include offers tailored to specific stores, says Patrick Boegel, the vendor’s director of media integration.

Geolocation recently has become a more crowded place, with social networking giant Facebook last month introducing Places, a feature that enables Facebook’s 150 million mobile users to broadcast their location through their Facebook status windows. Boegel says he is not yet worried that Places might displace other services such as foursquare.

“It’s very hard to gauge where that’s going until we get a feel for Facebook’s plans for Places,” he says.  “There is probably room for both.”

So far, though, relatively few consumers seem interested in geolocation. Only 4% of U.S. online adults have ever used location-based apps on their mobile phones, with only 1% using them more than once a week, according to a recent report from Forrester Research Inc.

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