Shopkick – “fun treasure hunt” creating an engaging digital overlay to the physical world of shopping

Shopkick is an app that offers a fun and easy way to earn rewards for visiting stores and purchasing a variety of products. It is generating enormous amounts of data on shoppers’ habits, including location and time of purchases, that give retailers and brands an opportunity to tailor their marketing efforts and make business decisions.

Introduction

Shopkick is an app that offers a fun and easy way to earn rewards for visiting stores and purchasing a variety of products. Points or simply “kicks” are awarded when users walk into participating stores, as well as when users scan product barcodes or QR Codes using a device’s camera, and by making purchases. The app is currently available for iOS (both iPhone and iPad) and Android devices. Kicks can be redeemed for various rewards, including gift cards, iTunes song downloads, movie tickets and charity donations. Although it was originally designed to draw shoppers into stores, by 2016 two thirds of the time that a user spent on the app was at home or away from a place of purchase, mainly planning a shopping trip by browsing through participating stores and products with high number of “kicks”. The App currently has over one million weekly active users and has been ranked #1 in engagement in its category by Nielsen Mobile.

Value Creation

 

Shopkick has a differentiated value proposition for brands, retailers and its users:

  • The App offers retailers and brands a promotional mechanism that is not a price-off and therefore, is margin-accretive. It provides customer engagement beyond ad impressions and offers valuable insights about purchasing behavior and habits. Brands such as Unilever and retailers such as Best Buy have been able to map their shopkick campaigns to increase in sales
  • To users shopkick provides experience-based shopping. Whereas collecting coupons is considered “work”, collecting kicks is more of a game, it’s social and brings moments of fun to shopping

Value Capture

 

Currently, shopkick receives a fee for each kick a customer earns, as well as a percentage of the price when a customer buys something after scanning the product while using the app. The app is generating enormous amounts of data on shoppers’ habits, including location and time of purchases, that give retailers and brands an opportunity to tailor their marketing efforts and make business decisions. As such, it has become a business intelligence tool providing information previously not available in brick and mortar shopping. Company leadership sees an opportunity to deliver retailers and brands near real-time insights on their consumer audience based on users’ actions in-app. This has the potential to disclose how in-store shoppers are behaving and enable retailers and brands to identify who their best shoppers are, where and when to reach them and what marketing messaging to use.

Opportunities Ahead

Alternative value capture model for shopkick would be to sell customer information to data aggregators such as Datalogix, Acxiom, and Nielsen. While this would provide quick revenue upside, it is not aligned with company’s vision. In order to distinguish themselves from competitors in the coupon space, such as Coupons.com, Grocery IQ, Cellfire, Checkout 51, Coupon Shopper, Favado, Ibotta, MySupermarket, SnipSnap and Saving Star, shopkick is planning to apply the tools of online commerce to the offline retail market. By doing so, it has the potential to become a data management platform transforming how marketers make decisions.

Sources:

  1. http://shopkick.com
  2. https://en.wikipedia.org/wiki/Shopkick
  3. J. Deighton and A. Ciechanover: shopkick: The Game of Shopping, HBS, Feb 2017

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