Retailers have a long list of tricks they can use to encourage shoppers to walk into their stores, including advertisements, coupons, and direct mail. But even the best of those approaches have low hit rates: an exceedingly small share of consumers exposed to such enticements actually responds by visiting the retailers.
Cyriac Roeding aims to change the odds. Shopkick, the company he cofounded, has created a mobile app that rewards shoppers for walking through the doors of a store. Shoppers who have downloaded the app to their iPhone or Android device receive “kicks” when they enter participating stores. The kicks can be redeemed for gift cards, merchandise discounts, or charitable contributions.
Many entrepreneurs are focused on mobile commerce—the purchase of goods through mobile phones—but Roeding was more attracted to the far greater opportunity of traditional retailing that is influenced by online activity.
Besides drawing shoppers into stores, the mobile phone also allows them to have an interactive shopping experience. Because shoppers can, for example, also receive kicks for scanning a product’s bar code, the app is appealing to brands, too. Twelve retailers, including Target and Best Buy, and 30 brands, including Procter & Gamble and Kraft Foods, offer rewards through Shopkick, and more than 2.5 million people use the app.
The Shopkick Signal is the company’s “secret sauce.” Inside each store, Shopkick installs a small, inexpensive plug-in device that emits an inaudible signal that can be picked up by the microphones of cell phones. This “presence technology” is far more accurate than technologies built on the Global Positioning System (GPS), which is commonly used in other check-in apps such as Foursquare.
Dominic Field, a partner and managing director in the Los Angeles office of The Boston Consulting Group and leader of the digital economy topic area, recently talked with Roeding. Excerpts from the interview follow.