Retail giants turn to new mobile tools

18 August 2010

NEW YORK: Major retailers like Best Buy, Macy's and American Eagle Outfitters are experimenting with mobile tools that reward customers for participating in a range of activities.

Shopkick, established in June 2009, has recently introduced a free application for the iPhone enabling users to earn points, or "kickbucks", for entering stores, visiting certain floors and scanning products.

It employs bespoke devices to detect the consumers who have this app open, sending them offers and adding credits to their account, to be reclaimed against items like Facebook games and music downloads.

Sucharita Mulpuru, an analyst at Forrester, the research firm, argued the fact this service is wholly centred on what happens in-store was "unusual".

“Will it lift sales? That remains to be seen, but everyone is eager to experiment,” Mulpuru continued.

Best Buy, the electronics giant, is planning to trial this system in a number of venues in Los Angeles, New York, Dallas and Miami.

It will run a series of promotions as part of this process, in order to determine how much interest such an initiative receives.

"We think consumers have more opportunities than ever to bridge their digital and physical shopping experiences, particularly through smart phones and mobile technology," Matthew Smith, its vp, marketing services, said.

"We intend to explore ways we can use the power of location-based technology to personalise a Best Buy shopping experience, from check-in to check-out, with rewards and offers delivered right on a customer's smartphone."

Margita Labhard, director of Best Buy's new business customers' solutions group, also stated this move has been motivated by a clear evolution in popular habits.

"The retail environment is changing," she said. "[We want to] find new ways to bring people into our stores through the use of mobile technology, but more importantly, know when they come into our store."

Cyriac Roeding, co-founder and chief executive of Shopkick, also suggested the unique features of this application encouraged trips to specific businesses and stimulated pre-identified actions.

"Why does no one ever reward anyone for visiting a store?" he asked. "It's the first reward programs for desired behaviours."

Macy's, the department store chains, has sought to implement a tailored approach during the recession, such as by adapting its inventory to suit the needs of communities in different regions.

Like Best Buy, it is attempting to gain an insight into the opportunities for targeting Shopkick affords, and could expand the system rapidly should the provisional trials prove successful.

"The retail world is typically divided between the 'bricks' of physical stores and the 'clicks' of online shoppers," said Martine Reardon, Macy's executive vice president of marketing and advertising.

"Shopkick … will help us find new ways to communicate with consumers at the right time with just the right offer."

American Eagle Outfitters' outlet in Times Square, New York, was used to launch Shopkick's app, providing a variety of discounts, including a 15% reduction on selected products, like jeans.

The company will also hand its clientele points for scanning a barcode while trying on clothes in changing rooms, and patrons accumulating 1,250 “kickbucks” then earn a $5 gift card.

"We believe Shopkick's location-based retail app is a potential game changer in retail," said Michael Dupuis, vice president, marketing at American Eagle.

"It is designed to make the shopping experience more rewarding and fun for consumers, which in turn brings more shoppers to our stores."

Elsewhere, the Simon Property Group, the largest mall operator in the US, is introducing Shopkick scanners to 100 sites around the country, having spent a year comparing the possible alternatives.

Data sourced from New York Times/Earthtimes/USA Today; additional content by Warc staff