March 16, 2011, 2:19 PM

iLoop looks to loyalty and location with new mobile deals app

The app will use augmented reality and GPS to show discounts through a smartphone’s camera.

Katie Evans

Managing Editor, International Research

Lead Photo

The SlingShop iPhone app

ILoop Mobile, which provides mobile marketing programs for such companies as Coca-Cola and car maker Lexus, is launching a mobile loyalty program called SlingShop that offers consumers a map of deals from nearby local merchants and allows them to choose which ones they want to receive deals from.

The program will launch later this year as an app and will soon after be available via the mobile web and through Facebook. The app uses augmented reality and GPS to notify shoppers of discounts and rewards on a map presented through their smartphone’s camera. Augmented reality technology enables users to change imagery or see information projected onto a phone’s display when looking through a smartphone’s camera.

As a consumer walks down a street, the app shows her participating SlingShot merchants. A click on a merchant shows the deal it is offering, such as a dollar off a slice of pizza. The consumer chooses the deal they want and visits the merchant to redeem the deal. A merchant also can opt to let app users play a mobile game where they hit a target with a virtual sling shot to reveal an extra prize, such as a bigger discount.

Once a shopper is following a merchant, the merchant can offer ongoing deals via the app as well as loyalty programs to keep shoppers coming back. For example, a shopper might get a free large pizza if they spend $50 or get their tenth slice of pizza for free. Shoppers can keep track of offers and rewards within the app. They also will be able to search for SlingShop deals in other locations. For example, if a consumer is planning a trip to Seattle, she can view deals in that area via the app.

ILoop is still working on the details for the app, including the fee structure for merchants. It says merchants will be able to choose to have consumers buy deals direct through the app or pay at the store. It also plans to provide free analytics data to participants such as how many consumers redeem the deals, how much app users spend, and more.

ILoop plans to use the local merchant contacts it has established through its partnership with Comcast Spotlight, the local advertising sales division of the cable TV and Internet provider. Comcast Spotlight uses iLoop for its MobilExtra program which combines cable advertising with SMS coupons.

“ILoop’s new offering was created because services like Groupon and LivingSocial help businesses attract new customers, but don’t create brand loyalty or help in retaining customers,” an iLoop spokeswoman says. Additionally, the thinking is because shoppers choose the merchants they want offers from—as opposed to being presented with one randomly every day—they’ll be more likely to respond. “Shoppers get the deals they want to see—not what happens to be the deal of the day,” the company says.

How to keep customers coming back is a top concern among local merchants using daily-deal programs. The Groupon shopper is price-sensitive and not likely to be attracted to local businesses that often compete more on service than price, says Tim Adams, founder of LocalMarketingProfitFaucet.com, which specializes in small business marketing. He says many such shoppers are loyal to the deal site, not the store or brand.

Offering a loyalty program would help solve that issue, iLoop contends.

LivingSocial last week began a pilot program similar to iLoop’s in that it offers consumers time-limited deals close to their current location. The program, called Instant Deals, is being piloted in Washington, D.C., and is designed to help merchants attract traffic during slow times. For example, a restaurant can increase its sales during a slow afternoon by offering a special deal between 3 p.m. and 5 p.m., LivingSocial says.

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