Retailers shift their ad spending from TV, radio and print ads to digital ads.
The app offers virtual loyalty cards to drive more store visits.
Another company has launched a location-based mobile phone application that aims to encourage consumers to make repeat visits to bricks-and-mortar merchants.
PlacePop, a Silicon Valley-based startup, says that consumers can download the applications for free from Apple Inc.’s app store or the Android Market, where consumers can find apps for phones that run on the Google-backed operating system.
Similar to a service such as foursquare, the PlacePop geolocation app relies on the smartphone’s GPS technology. Consumers use the PlacePop app to figure out which nearby stores offer virtual loyalty cards. Consumers check in with those retailers to collect virtual punches on those cards, a PlacePop spokeswoman says. Three check-ins earn the consumer “bronze” status, while 10 earn “silver,” 25 earn “gold” and 50 earn “platinum.”
Merchants decide how to reward consumers at each level—for instance, free coffee for bronze, or a $10 gift certificate for gold, the spokeswoman says. PlacePop can e-mail a coupon to a consumer when she reaches a status level, or consumers can show the virtual card on the mobile phone’s screen to a clerk at the point of sale. “It's up to the business to decide how they prefer to control redemption,” she says.
The application also enables consumers to share via Twitter and Facebook the merchants they are visiting.
A retailer does not have to invest in new technology to get started, the PlacePop spokeswoman adds. “A retailer can get started right away by using our self-service, web-based dashboard to set up and manage their loyalty program,” she says. “For this reason, PlacePop works well for both national retail chains and mom-and-pop stores.”
PlacePop just received $1.4 million through a recent investment round. Investors include Chris Michel, founder of social network development company Affinity Labs; Michael Birch, founder of social network Bebo; and James Currier and Stan Chudnovsky, co-founders of software development firm Ooga Labs.
PlacePop is seeking retailers that want to take part in the launch.
“Launch partners will receive free access to premium services in exchange for their early adoption of the platform,” the spokeswoman says. “Initially the services we offer will be free of charge, and the features that we currently offer—basic loyalty card program, customized greeting for customers checking into retail locations—will always remain free. However, as we continue to develop new features, we will begin to charge for premium services such as customized programs and deeper interaction with customers.”