JD.com and Alibaba create indexes to identify Chinese shoppers’ spending trends, which help retailers gain insight.
On average, they check out 16 stores each time they open the app.
Consumers who use shopkick, a location-based shopping app, tend to spend a lot of time within the app looking for deals at retailers, Cyriac Roeding, shopkick CEO and co-founder, tells Internet Retailer. Shopkick’s premise is to reward consumers for creating foot traffic inside stores, he says.
On average, a shopkick user opens the app 14 times a month and looks at products from 16 stores, Roeding says. “The biggest challenge for retailers is foot traffic,” he says. Once a consumer is in a store, the likelihood he leaves with a purchase is high, he says, citing conversion rates ranging from 20% at a fashion store to 95% at grocers. Online conversion rates typically are in the 3% to 5% range, Roeding says.
Shoppers who have the app on an iPhone or Android phone open can see a list of participating nearby stores they can enter and how many “kickbuck” loyalty points 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 and hotel vouchers. Retailers control how many kickbucks shopkick users earn and set their own reward levels, Roeding says.
Best Buy Co. Inc., No. 10 in the Internet Retailer Top 500 Guide, The Sports Authority, No. 223 in the Internet Retailer Top 500 Guide, and American Eagle Outfitters Inc., No. 57, offer shopkick rewards, with Toys ‘R’ Us Inc., No. 29, signing up last week, Roeding says.
Brands also use shopkick to reward consumers, Roeding says. Kraft Foods Inc., The Walt Disney Co. and Revlon Consumer Products Corp. are some of the brands on shopkick. Shopkick users earn rewards from brands for scanning an item in a store. Brands are willing to do that because the scan indicates the user more likely than not actually picked up the product, Roeding says. That action, in turn, means the consumer is likelier to buy the scanned product, generating a 16% conversion rate for scanned products, Roeding says.
“We want to give consumers an incentive to come in one more time than they usually do,” Roeding says. “We want to give them a reward and verify that they’re in the store.”