Shopkick Partners with Visa to Boost its Reward System

By Joseph Dalton - 29/11/2011 15:09:38

Shopkick, a mobile coupon application with over 2.5 million users, recently linked up with Visa to tie their retail reward system with Visa's payment processing network. Since its inception, Shopkick has been highly successful at pushing foot traffic to retail stores. Before the integration, the application awarded users with "kick points" for checking into stores. Shoppers could then redeem these points for special deals. But that's where the buck stopped; the application drove customers in the door, yet didn't reliably turn visitors into purchasers. The new partnership with Visa allows Shopkick to convert users by letting them link their Visa cards with the application. As noted by Ryan Kim of Gigaom.com, "… with a new partnership with Visa, it is realizing its full potential by tying into Visa’s payment processing network, helping close the loop on transactions and providing new incentives for users to make purchases."^[1]

 

Company Background

 

Shopkick goes far beyond traditional mobile couponing. Shopkick is a 100% performance-based marketing platform geared towards creating foot traffic and driving sales. Shopkick was founded in 2009 by Jeff Sellinger, Aaron Emigh, and acting CEO Cyriac Roeding. Reid Hoffman, the founder of LinkedIn and key investor in Facebook, provided most of the startup capital. According to Roeding, the application "bridges the worlds of mobile and physical retail. ^[1]"

 

The company launched their self-titled mobile couponing application in August of 2010. This application was the first of its kind—offering consumers deals and rewards just for stepping foot in the doors of retail stores. To bolster its application, Shopkick created a new location technology that trumps GPS. This location technology can verify—with pinpoint accuracy—whether or not the shopper is actually in the store. As a result of their efforts, advertisers jumped on the opportunity to pay Shopkick for the foot traffic their application generates.

 

Heavy Foot Traffic

 

According to its CrunchBase profile, the application accumulated its first million users in six months. In an additional four, the app had reached 2 million. Such unprecedented growth proves Shopkick's worth on the market ^[2]. And the partnership with Visa only furthers their mission of rewarding consumers for foot traffic. According to Roeding, purchase rewards were always a part of the plan. "Rewarding and incentivizing actual purchases was part of the original plan for Shopkick.^[1]"

 

The "Buy and Collect" Program

 

Shopkick's new "Buy and Collect" program allows shoppers to get instant rewards for visiting stores and making purchases. Retailers can also offer "kick boosters" that increase the amount of a reward when a user buys a certain amount. When users pay with their Visa card, Shopkick sends an in-app message to notify them that they're kick rewards have been collected or redeemed. Users also have the opportunity to locate other nearby stores with similar buy and collect offers. The rewards encourage shoppers to make bigger purchases, and retailers can get specific data on the results of their efforts.

 

From a consumer and retail perspective, the recent integration between Visa and Shopkick could be a game-changer. According to Kim, "This is also another sign of how the credit card companies can play a big role in providing rewards and can enhance loyalty programs for retailers and merchants." Roeding believes that tying existing retail loyalty programs into the app allows users and retailers to connect in ways that boost customer retention and engagement. ^[1]

 

Looking Forward

 

With over 4,000 retailers currently using Shopkick, consumers can expect the application to make its way into more retail stores. Recently, more big name stores have installed Shopkick equipment in hopes of collecting unique data, improving loyalty, and driving purchases. Its existing partners include retail giants Best Buy, Target, Macy's, Crate & Barrel, Sport Authority, and West Elm. In addition, HP, Disney, P&G, Kraft Foods, General Mills, and Colgate have formed partnerships with Shopkick. In a world where click traffic is king, Shopkick should continue finding ways to push foot traffic like never before—especially with Visa at their side. ^[2]

 

References

 

[1] Kim, Ryan. "Shopkick Teams with Visa to Tie Rewards to Card Purchases — Tech News and Analysis." GigaOM — Tech News, Analysis and Trends. 21 Nov. 2011. Web. 22 Nov. 2011. <http://gigaom.com/2011/11/21/shopkick-teams-with-visa-to-tie-rewards-to-card-purchases/>.

 

[2] "Shopkick | CrunchBase Profile." CrunchBashttp://easybib.com/cite/forme, The Free Tech Company Database. Crunch Base. Web. 22 Nov. 2011. <http://www.crunchbase.com/company/shopkick>.