E-commerce grew 20% for Costco in fiscal 2015—20 times faster than store sales.
One retailer says the shopkick app is working.
Shopkick has stood out among a sea of location-based shopping rewards apps because of its big-name inaugural partners including Macy’s and Best Buy, not to mention technology that can determine when a shopper steps into a store—not just when she is in a parking lot or the general vicinity.
Now the app is standing out for another reason. A retailer is saying the app works.
Sporting goods retailer Sports Authority says shopkick is helping drive more foot traffic to its stores.
"We had 50% to 70% more shoppers walk into the store with shopkick when we increased the rewards for walking in,” says Jeff Schumacher, chief marketing officer of Sports Authority. “There is a direct and measurable correlation that shopkick's model works."
Sports Authority ran several tests in four months since it began using the service to see if offering more rewards points for walking into its stores would entice more shoppers to do just that. So Sports Authority doubled and tripled the number of kickbucks—the cross-retailer currency of shopkick—it awarded to shoppers for walking into participating stores. Sports Authority found that as it offered more kickbucks for entering a store, more consumers with the app walked in, in some cases up to 70% more.
The shopkick app, when open on a iPhone or a smartphone using Google Inc.’s Android operating system, can detect a signal, emitted from devices about the size of a brick located in participating stores. This location detection is more exact than geolocation technology which can only tell if a shopper is in the general vicinity of a store, shopkick says. The devices cost around $100 and only require an electrical outlet.
Shoppers who have the app and open it can see a list of nearby participating stores they can enter and how many kickbucks each offers for entering. Once a shopper with the app on her phone enters a store, a retailer can offer her more rewards for taking actions such as scanning a poster in a dressing room or a bar code on a product. They also can offer special discounts on products or promotions such as double kickbucks for walking in during a certain timeframe. Kickbucks can be collected and redeemed for store gift cards at the stores of retailers working with shopkick, song downloads, movie tickets, hotel vouchers, Facebook Credits to play games online and donations to 30 causes and charities.
However, it can take a lot of kickbucks to get much. A song download is around 250 kickbucks, and a shopkick spokeswoman has confirmed a $5 gift card at American Eagle requires 1,250 kickbucks. However, she adds merchants can structure rewards however they wish. For example, she says one merchant offered a $25 gift card for 250 kickbucks. Merchants put caps on the amount of times per day shoppers can enter a store and complete tasks to earn kickbucks.
In addition to the price of the signal transmitter, retailers pay shopkick a small fee for each kickbuck they dole out. And if a consumer buys an item after using the app, shopkick gets a percentage of the purchase price.
More than 1,100 stores and 100 shopping malls are using shopkick's technology. Additionally, shopkick works with brands including Kraft Foods and Procter & Gamble to offer smaller rewards for checking in and scanning products at 230,000 retail locations.