How Local Merchants Can Use Shopkick to Win New Customers

Small business owners in 10 major cities can now leverage the mobile loyalty platform.
February 28, 2012

National retailers have been using shopkick to drive foot traffic and incentivize spending since 2010. Now, thanks to the introduction of shopkick's local arm in 2011, small and medium-size businesses can finally get in on the action and capitalize on the buzz that this location-based shopping platform has already built.

How It Works: Shopkick is a mobile loyalty platform that rewards customers for shopping at participating stores. Unlike competing mobile applications, like foursquare and LevelUp, customers don't need to manually check-in or even touch their phones to start earning shopkick rewards. Instead, customers who've downloaded the shopkick app on their iPhones or Androids automatically start earning points—which shopkick calls "Kicks"—the moment they walk by a participating retailer. Shopkick's "Signal" technology, which is installed inside each store, continues to track customers as they interact with merchandise and visit different areas within the establishment. The points that customers accumulate during their shopping expeditions can be redeemed by merchants for real-world rewards and discounts.

Shopkick in Action: Small-business owners with brick-and-mortar establishments in 10 major cities—which include New York, Los Angeles, San Francisco, Chicago, Dallas, Houston, Seattle, Washington, D.C., Detroit and New Orleans—can take advantage of shopkick to boost foot traffic and encourage current customers to visit more frequently. Although any local business can apply to work with shopkick, the mobile platform says it prefers to work with coffee shops, bakeries, family restaurants, local clothing stores and yogurt shops. Once a business has been selected, shopkick will handle the installation of its in-store signaling hardware and monitor the activity of participating users. Local merchants can sit back and relax, without having to worry about rotating special deals or tracking how many customers have checked-in.

In an effort to promote its local platform, shopkick is currently offering its services for free to the first 1,000 merchants selected to participate. Merchants that don't qualify for the limited-time offer can expect to pay less than $100 for shopkick's in-store tracking hardware, along with a commission fee based on the points their customers earn and the number of transactions completed by shoppers with the shopkick app.

Why It Works: Shopkick is one of the most successful mobile shopping applications among national merchants because of its app install base of 1.8 million, and 40 percent of its users are active each month. The fact that big-box retailers like Sports Authority, American Eagle and Best Buy have been offering deals through shopkick for years means local merchants don't need to invest money in promoting the platform or educating their customers on how to use it.

By eliminating the manual check-in, shopkick makes it easier for shoppers to participate in loyalty programs and earn points. The platform avoids privacy issues by staying away from GPS tracking and using in-store signaling hardware, which can only track customers when they are in the immediate vicinity of a participating retailer, instead. This signaling hardware also adds legitimacy to rewards-based campaigns by ensuring that customers aren't checking-in from remote locations or otherwise defrauding the system when earning points and redeeming mobile offers.

Maximizing the Benefits: Merchants are given plenty of latitude in creating the rewards and incentives they offer to shopkick users, as well as the activities and tasks that customers can complete to earn points. At Sports Authority, for example, customers will often receive extra points for interacting with selected in-store displays and scanning barcodes on merchandise that the retailer is currently promoting.

Smaller businesses that can't afford to give away gift cards and 50 percent-off coupons can get creative with the incentives they offer. Coffee shops and bakeries can give away free cups of coffee or muffins, just like they would with traditional loyalty punch cards, while clothing stores and other local retailers can reward shopkick customers with sneak peaks of their latest merchandise and first-access to exclusive sales.

Read more "How It Works."

Stephanie Miles is an associate editor at Street Fight. She is based in Portland, Ore.

Photo credit: shopkick